If you are planning to leave your current employer or fire a dental associate, a thorough dental employment contract review of the current engagements is one of the first steps you should take.
As you are about to see, a common situation in which dentists and associates continue working after their fixed-term contracts have expired creates severe legal uncertainties that can lead to significant issues if a dispute arises.
Non-lawyers usually think that the expiration of a written employment agreement (or any other contract) means the agreed-upon terms automatically disappear. However, with employment agreements, that is not entirely the case.
The rule is that if both parties continue to perform under the same conditions, a court may, and most likely would, determine that an implied contract exists solely based on the parties' conduct.
This principle is well recognized across jurisdictions, but it does differ in nuances from state to state. The courts will examine the true intention of both parties and see whether they intended to continue the employment relationship under substantially the same terms, even though the written contract had expired.
In dental offices, that usually means the dentist/associate continues working under the same conditions, maintaining the same duties, benefits, and receiving the same compensation. It often means they will continue serving their regular patients and accepting new ones as usual.
We recently had a client in Arizona whose employment agreement had technically expired several years earlier. However, both the employer and the employee continued operating exactly as they had under the fixed-term agreement, and neither party addressed the expiration.
Our client, working as an associate dentist, believed she could leave the practice without violating the non-compete clauses, as the contract had long since expired and the post-employment restrictions had run their course.
But the situation is not that simple.
In many states, the courts have held that if both parties continue performing under the expired agreement, they have, in effect, continued the contractual relationship. In our Arizona case, certain provisions, including restrictive covenants like non-compete clauses, were still enforceable.
But whether or not the clauses are enforceable in your case will depend on the state law, the language of the agreement, and the actual circumstances.
For this reason, it's exceptionally important to conduct a thorough review of the dental employment contract before assuming any legal position, as a wrong move may lead to lengthy and costly disputes.
While most clauses may look similar, every employment contract is unique because it addresses a different situation. What makes things even more complicated is that every state law has its own rules.
That's why a thorough dental employment contract review is paramount, whether you are looking to leave your current employer, or you want to hire a new associate, or you are in a situation where restrictive covenants are about to be enforced.
Consulting an experienced dental business attorney who will evaluate the situation and tell you, with legal certainty, whether the expired agreement remains enforceable is usually the best option. A legal professional will not only assess the restrictive covenants and see if they are enforceable, but also explain to you potential legal risks and give you strategies that will help prevent further escalation and disputes.
While getting legal help does cost money, an early legal consultation is, in almost all cases, far less expensive than defending litigation after a decision has already been made. Not only that, going to court is expensive; it is time-consuming and annoying, especially when it was unnecessary and preventable.
Employment agreements do not always simply end after the expiry date. If both parties continue working under the same terms, courts may determine that the agreement (or some portions of it) is still enforceable.
Because employment law is case-by-case and fact-specific, and because state-by-state differences matter, it is super risky to assume that an expired contract no longer applies. This approach may lead to serious legal risks.
For those reasons, working with an experienced dental business attorney will help you identify and prevent potential issues before they lead to costly, lengthy disputes.
Don't allow preventable issues, such as an unnecessary employment dispute or a problem with an enforceable non-compete, to threaten your practice.
Contact Finn Legal today and schedule your personalized consultation. We will perform a thorough review of your dental employment contract and assist you with contract negotiations and employment disputes, providing expert legal guidance to protect your dental business.
