Vince Nardone Visits Ohio State Organizations to Speak on Employment Contracts for an Associate Dentist

April marks a busy month for Columbus attorney Vince Nardone. Throughout the past couple of weeks, Vince has visited The Ohio State University’s (i) Delta Sigma Delta dental fraternity, (ii) the Dental Entrepreneur Society, and (iii) Transitions’ “student to business owner” preparation group. Vince Nardone covered all aspects of an employment contract from an associate dentist perspective, but he emphasized certain aspects of that employment contract, including:

(i)     The term of an employment contract – in most instances, associate doctors are hired for a one-year term. With that one-year term, the employment contracts generally automatically renew unless one of the parties to the contract notify the other that they do not intend to renew.

(ii)   Termination – Mr. Nardone discussed the difference between a for-cause termination and a not-for-cause termination.

(iii) Compensation –There are a variety of ways that an associate dentist may be compensated in a dental practice. Vince went through and discussed the difference between net collections, net production, a daily rate, draws, and a salary. It is important to fully understand the formulas for each one of these compensation structures when presented to you. 

(iv)  Restrictive covenants – He discussed the various restrictive covenants, including non-competes, non-solicitation of employees, non-solicitation of patients, advertising, and non-solicitation of referral sources.

(v)    Geographical limitation of the non-compete – The distance for the radius of a non-compete provision should be determined and based upon the particular patient base for that particular practice. The way to determine a patient base is to complete a zip code analysis using the practice’s dental software. Any owning doctor should know what the source of their patients are in the first place. But, to the extent that they do not, completing the zip code analysis will allow both the owning doctor, and the associate dentist to better understand and determine the fairness of that radius.

(vi)  Time period limitations – Vince encourages and generally recommends: (i) no non-compete for an associate dentist that works less than six months; (ii) a one-year non-compete for an associate dentist that works at least six months but less than one year; and (iii) a two-year non-compete for an associate dentist that works one year or more.

(vii)   Employment versus owning – He also discussed the difference between the non-compete for an associate dentist working under an employment contract versus a non-compete for a selling doctor as part of the purchase of a dental practice entity.

In sum, he emphasized to the dental students that simply because a particular practice may pay less of a percentage on a net collection or net production basis, as compared to another practice, does not mean that you should not work for that particular practice. Rather, you have to look at the compensation packages as a whole and the employment contract in its entirety.

It is also important to fully understand all aspects of the employment contract. As an example, does the practice pay for malpractice insurance, lab fees, materials and supplies? Does the owning practice cover continuing education, provide paid vacation, provide paid sick leave, etc.? You cannot simply consider one aspect of a particular employment contract and determine that it is good or bad.

Further, as an associate dentist, if you like the practice, like the practice area, like the owning doctor, and the overall compensation package and employment contract seem fair, then do not nitpick various provisions of a particular employment contract and do not allow your attorney or accountant to nitpick various aspects either.

Once you are in the practice for a while and you have established your value to that particular practice by: (i) exhibiting good clinical skills; (ii) continuing to increase your production per hour; and (iii) assisting with the day-to-day activities of the practice, you will then be able to establish value to the practice and will have more leverage to discuss other aspects of the employment relationship.