Compensation, Benefits, Severance – What are Employees Entitled to After Termination

There may be times when there needs to be a separation between the practitioner and the healthcare practice. This can occur for several reasons, including that the business relationship is no longer viable. Whether you are the provider or the owner of the practice, it is important to understand what happens and what to look for at the time of termination.

What’s the first step before providing notice of termination?

Both the practice and the employee should become familiar with the employment agreement to understand the terms related to termination. Are you terminating for cause or without cause?  Are you providing the correct amount of notice pursuant to the agreement? What are your obligations during the notice period or after termination?  

Whether terminating with or without cause, a written notification will provide the reasons for the termination, along with any further responsibilities and when the last day of employment will be.  This will prevent any misunderstandings between the parties.  

There may be an instance where the practice will provide severance at the time of termination and request that the employee sign a Separation and General Release Agreement. This type of agreement will outline the separation, what the responsibilities are between the parties, including compensation and benefits, releasing the parties from any potential claim or loss and, at times, adding extra protection for the practice post termination. This is one way that the practice may protect themselves against some potential lawsuits or claims against them as it relates to the employment. 

A severance provided by the practice will allow the employee additional compensation, outside what may already be owed by the practice, so long as they sign the Separation and General Release Agreement. This additional compensation may be paid in a lump sum or  over a particular period of time, depending upon the terms of the separation. 

The agreement may also include language regarding restrictive covenants, including a  non-compete, non-solicitation, confidentiality of information maintained by the practice, as well as language regarding non-disparagement against both parties. There may also be language regarding the return of company property, which may include electronic devices, office keys, uniforms and/or anything that the employee had received in order to provide the services under their employment agreement. 

When terminating an employee, one way to protect your practice is to provide a Separation and General Release Agreement – which outlines not just the separation of the business relationship but may provide additional benefits to both the practice and the employee alike.