Long Saad Woodbridge

The Nitty Gritty – Dental Industry Specific Termination Clauses

Whether you go into partnership with a fellow dentist, employ another dentist in your practice or engage another dentist as a contractor in your practice, you will need to ensure that you protect yourself and your practice in the event things don’t work out between you and your colleague and you decide to part ways. Dentists that ‘split up’ on less than ideal terms often find themselves in legal entanglements because their partnership, employment or contractors agreements are not up to scratch and do not deal with dental industry specific issues. For example, most employee/contractor agreements will have termination clauses that include notice periods as well as non solicitation and non competition provisions with respect to staff and patients. These clauses are common to all industries. However, most of these common provisions do not get down to the nitty gritty on the following issues:

  • Who owns the patients? In an employment relationship patients would normally be patients of the practice, subject to any carve out for family and friends of the employed dentist.In a principal/contractor relationship the patients may be patients of the practice with or without a carve out for patients introduced by the contractor. Alternatively, the patients may be patients of the contractor.These issues need to be discussed and agreed at the outset and the agreement reflected in the employment contract or practitioner agreement.
  • Who owns the patient records? This question gives rise to common disputes and should be dealt with at the initial contract stage.In an employment scenario, it is usually the principal that will retain the patient records.However, in a contractor scenario, the contractors will often take the patient records. In this case, the dentist that owns the practice should retain a copy.In making these arrangements, it is important that both dentists involved will be able to comply not only with the Privacy Act but also with the Dental guidelines on dental records issued by the Dental Board.
  •  How is warranty work going to be dealt with and who will do it? Given that warranty works are a common occurrence in the dental industry, many practices will retain money for a period of time after a contractor dentist or partner in the practice has left the practice to account for warranty works.However, unless this is stipulated in the agreement governing the relationship between the respective dentists, practices will often have to do the warranty work at their own costs after a dentist has left.Some practices also try and recoup money spent on warranty works from any outgoing partner or ex contractor. However, this may be difficult if it is not specifically covered by any agreement.
  • How is uncompleted work going to be dealt with and who will do it? Major dental work often takes place in stages. For example crownwork, bridgework and dental implants take weeks or months to complete.Some practices apportion all of the receipts to whichever dentist was working when the receipts came in. Again, this should be stipulated in any dental specific agreement to prevent a dispute from arising later down the track.If there are no contractual arrangements in place that deal with this specific issue it might be that, if all the money comes in at the end of the work, then the dentist who finishes the work gets it all.Furthermore, different arrangements may be made with respect to different kinds of work.

It goes to show that it is of utmost importance that these issues are covered in the termination clauses of dental specific agreements. In addition, any dental specific agreements should comply with any guidelines issued by the Dental Board including the Guidelines on dental records and the Code of Conduct. Therefore you should engage a law firm that understands the dental industry in your contract preparation. We have worked with several dentists before and have qualified staff members that have previously worked in the dental industry.



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