A locum tenens contract with a clause allowing immediate termination of a physician’s services resulted in a huge pay loss for one physician.
A client consulted me regarding several locum tenens shifts that were abruptly canceled by the locum tenens company with which she was working. The physician had canceled jobs with other facilities and accepted shifts at a facility being staffed by SMART Physician Recruiting. As an incentive to take those shifts, the physician was offered a bonus. The night before her scheduled shifts were to begin, SMART Physician Recruiting sent the physician a notice stating that the hospital had requested that the physician be removed from the schedule. SMART therefore canceled the shifts with less than 24 hours advance notice. As a result, my client could not schedule additional shifts on such short notice and wound up losing nearly $20,000 in income.
Can a locum tenens company be liable for canceling the shifts on short notice?
The answer is that “it depends on what’s in the contract.”
The agreement that SMART Physician Recruiting required the physician to sign had the following language:
This assignment may be terminated immediately by SMART Physician Recruiting if you are convicted of any crime involving moral turpitude, have committed any proven act or acts of violence or dishonesty, if you cease to be licensed to practice medicine, if you cease to be a credentialed member of the Hospital staff, or, if your removal from the provider schedule is requested by the Site or the Medical Director at the site.
The SMART physician recruiter reportedly told my client that the director of the hospital had specifically requested my client’s removal from the schedule. When my client reached out to the director, the director flatly denied those allegations.
The physician is currently considering a breach of contract claim against SMART Physician Recruiting.
Locum Tenens Contract With Immediate Termination Clauses
SMART Physician Recruiting’s contract language requires that the physician give 60 days notice before canceling a shift. However, SMART Physician Recruiting can cancel a shift with no advance notice if a hospital requests such cancellation. Unfortunately, such inequitable language is common in locum tenens contracts.
Western Healthcare, another locum tenens agency, has contract language allowing physicians to be immediately terminated if a hospital “requests that the physician be removed for reasons of professional competency or conduct” or if the hospital does not pay Western Healthcare for services the physician provided.
Weatherby Locums has contract language allowing physicians to be immediately terminated for several vague reasons including “breach of any duty,” upon a hospital’s “request for removal of Physician for reasons relating to professional competence or integrity,” for a “reasonable determination that Physician has conducted his or herself in a manner unacceptable to Weatherby,” or if the hospital does not pay Weatherby for the services that the physician has provided.
Physicians could sustain significant loss in expected income if a locums agency chooses to enforce somewhat vague contract language and abruptly removes a physician from scheduled shifts, or if a hospital simply refuses to pay the locums agency for services the physician provided.
NALTO, the National Association of Locum Tenens Organizations, has a code of ethics to which its members must agree. Included in this code of ethics are requirements that members refrain from “knowingly make false or misleading statements to a candidate,” refrain from “rusing” candidates, and refrain from “referring a candidate to a client whose business practices are known by the Member to violate the Code or applicable law.” NALTO may investigate locum tenens companies for failing to adhere to its ethical standards.
Takeaways
- Read your contracts carefully
- Consider whether you want to use single locum tenens assignments as your sole source of income
- Consider whether you want to work with a locum tenens company that is not a NALTO member or that does not adhere to NALTO ethical standards.
[This post was created with my client’s written consent]
See this link for additional articles I have written about medical employment contracts