Physician Contracts - Compliance Part 2 - Immigration Clauses

Many of the physician contracts we see are fairly standardized across the country and seem to be variations on only a few contract philosophies.  Much of the contract negotiation and drafting process is either handled by in-house legal teams or outside legal counsel for employers.  Unfortunately, many of those legal providers are unfamiliar with immigration regulations impacting contract clauses.  This disconnect can lead to frustrations in hiring a physician needing proper employment authorization from federal immigration agencies prior to commencing their work.  This article is intended as a general overview of the type of clauses that may need to be revised or completely removed when a physician is being hired contingent upon transferring or obtaining approval from US Citizenship and Immigration Services (USCIS).

As further clarification, this is a general overview and there may be state programs (regarding J-1 Waiver programs) which have requirements that are more or less strict than what is presented below.  The following is a national overview subject to unique local preferences and policies.

Non-Compete

There has always been tension in the employer-employee relationship when parties discuss any kind of post-employment covenants.  The most common offender is the idea of a non-compete.  From a business perspective, it makes sense to try to protect what the business has created and invested and risked and built over time.  However, at least in the healthcare industry, there is a nationally recognized shortage of qualified professionals able to meet all healthcare needs and when an employer leaves a job for any reason, the employee may want to stay in their local community and not uproot their family.  Often this tension falls in favor of the employer who is usually not willing to remove the non-compete covenants, even if they modify the time and distance restrictions.  

However, while some state laws prohibit non-compete covenants entirely, most states are allowed to keep those provisions in their employment contracts.  For the remaining states, when a hospital or medical group seeks to sponsor an International Medical Graduate (IMG) or foreign-trained physician, the US Department of Labor (DOL) and USCIS may further restrict their ability to retain those clauses in their contracts.  Basically, the idea is that an employer is sponsoring a non-immigrant for several years, depending on the eligibility program, and that it offends public policy to create a situation when a foreign worker becomes unable to leave the employer at their choice, exposing them to risks for labor abuse and hostile workplaces. 

Some applications to sponsor a foreign physician will be denied outright if some of these offending clauses remain in the final executed contract.

Full Time

Physician contracts are becoming more creative with the structure of how they handle call coverage, longer shifts, bonus structures and compensations.  The idea of being full-time may require that some weeks have more or less than the traditional 40 hours per week of clinical time.  For immigration, many eligibility programs will require that the contract affirmatively state that the position is "full-time" and that at least 40 hours per week are being worked.  Again, there is likely a way to modify contracts to accommodate unique schedule demands while maintaining compliance with the immigration rules for contract language regarding full-time status but this needs to be addressed sooner rather than later to avoid unnecessary delays in the contract acceptance, sponsorship and onboarding process.

Term and Termination

Contracts obviously vary in duration and mechanisms available to terminate.  When immigration sponsorship is involved, depending on the specific type of eligibility, most contracts will require a contract term of 3 years to be expressly stated.  Further, most of the state and federal programs require that the ability to terminate a contract without cause either be removed or seriously curtailed in its standard breadth.

Immigration contingency

One of the facts that parties assume in the contracting process is that the relevant immigration sponsorship will be approved.  However, as with anything, this cannot be guaranteed.  Accordingly, a carefully worded clause regarding the ability to cancel a contract if sponsorship is not approved is a normal requirement that is permissible, if worded properly.

Miscellaneous

There are many other provisions in contracts that can be freely negotiated, including benefits, partnership tracks, bonuses, etc.  Sometimes it feels that this process of working with foreign trained physicians or IMGs is a moving target, but with careful planning, there are great recruitment opportunities that employers can utilize when expanding or maintaining their service offerings in the community.