Hi, this is Dan Smith of DPS Legal Counsel. Welcome to today’s podcast of Legal Scrubs.
Today’s question that I want to address is why every single independent medical practice, whether it’s a big one or a small one, why every single medical practice should have written employment agreements with its office staff.
Now it may be that you think that if you run a small office and perhaps you’re the sole physician in that practice, and maybe you just have one employee, maybe an office manager, maybe you have a couple–an office manager and a bookkeeper. And you may just think that it’s just makes sense since you’re such a small practice, a small business, that you don’t really need to bother with an employment agreement with your staff. The reason I think you should is, well, first of all, let’s, before we go into that, let’s talk about the the law of employment in Tennessee.
Tennessee, as you probably know, is an employment at will state, which means that for the most part– and I say for the most part, because there are exceptions–an employer in Tennessee, a private employer, can terminate the services, fire an employee. for any reason, no reason whatsoever.
They’re basically, it’s unlimited ability to terminate an employee with only certain specific exceptions to that general rule. And so an employer in Tennessee, a private employer may say, well, you know, I can, I, I tell, I tell my employees what they’re going get paid. I make sure they do a good job. And if they don’t do a good job, in my opinion, I’m just going to let them go. And since this is an employment at will state, I can do that.
Well, here’s the thing. There are some exceptions to the general rule, of course, that you can terminate an employee for no reason. Most of those deal with public policy, in other, in other words, state or federal laws or constitutional provisions that prohibit discrimination, for example, you cannot just fire someone because of their sex, their race, their religion, you can’t fire them because they’re too old, or their country they come from, their national origin, or disability.
And in addition, you can’t fire someone in retaliation for filing a worker’s compensation claim. Okay. All that’s well and good. And you may say, I’m not going do that. I’m not going to fire someone for a prohibited reason. So why do I need an employment agreement since I live in an at will state employment state. I can, if it’s not one of the bad reasons, I can fire an employee for any reason or no reason at all.
That is all true.
But, an employee who is fired may allege that you have in some manner entered into a contract with them, either through oral statements that you make, that they will have a, a job as long as they do this or that, or perhaps you have an employee handbook at your practice, or you have written practice policies at your practice. And a fired employee may allege that based on the company handbook or the company policies or statements, they say that they actually have a contract with you, and that you just can’t fire them for no reason.
So if you, if you instead enter into a written agreement with all of your employees, you can make it very clear what the requirements for the job are.
And you can also make it very clear that the determination of whether they’re doing the job that is required is in your sole and absolute discretion as the employer, that they don’t have any other rights arising from a handbook or policy or anything of that sort.
So you can provide that they will get specific notice, or you can provide that for certain things they get no notice at all. For example, you can say, if you steal from me or you do this, or you do that, that’s very specific, you’re subject to being terminated immediately.
So all in all, a written contract is not that hard to do, not that complicated. And it brings a lot of clarity and precision to the relationships that you are developing with your office staff. So I would say it’s always in your best interest to enter into a written employment agreement with your office staff.
Okay. That’s it for today on Legal Scrubs. We’ll see you next time.