By Stuart J. Oberman, Esq.

Dentists associating with owner-dentists has become more prevalent in recent years. However, as associate dental relationships continue to flourish, so do unfortunate and unnecessary legal disputes related to these associate relationships.

The following list highlights points that should be addressed in any correctly drafted associate dentist agreement. Addressing these issues will help prevent later legal disputes.

Status of associate dentist. Internal Revenue Service rulings have made it increasingly difficult to characterize associate dentists as independent contractors rather than employees. Proper documentation is needed by the owner to successfully establish a legitimate independent contractor relationship with the associate.

Schedule and location of services. An agreement should explicitly state the number of days of work per week, the hours that the dental office is open, and the associate's responsibilities, if any, for weekday and weekend emergency coverage. The agreement should also indicate if the associate has any responsibility to render dental services at any satellite office locations.

Malpractice insurance. The agreement should explicitly state the obligation by both dentists to maintain malpractice insurance, the limits of such coverage, and unusual or special provisions.

Duties by owner and associate. The agreement should specify the associate's duties regarding the rendering of dental services, as well as his or her duty, if any, to become involved in administration and management concerns.

Compensation to associate. The agreement should carefully define the method by which the associate is to be paid. There are numerous variations of compensation including a flat per-day salary, or a percentage of the associate's monthly collections.

Business-related expenses. The agreement should detail what business-related expenses are the sole responsibilities of the associate, and which expenses are to be paid for or reimbursed to the associate by the owner. Professional license fees and association membership fees, automobile expenses, entertainment and promotion expenses, continuing education expenses, malpractice insurance, health, disability and life insurance should all be addressed in the agreement.

Patient charts and records. The agreement should clearly state that all patient information is confidential and may not be used by the associate for any purpose inconsistent with or in breach of any of the provisions of the agreement.

Covenants not to compete. Associate agreements should have clauses stating that the associate may not compete with the owner subsequent to termination of employment for a particular period of time and within a certain geographic area. The length of time and geographic area must be reasonable.

Confidentiality and trade secrets. The agreement should address what information in the dental practice is deemed to be confidential, trade secrets, or proprietary to the owner and therefore may not be appropriated by the associate for his or her own benefit and the owner's detriment.

Associate's right to buy in. The agreement must clearly state whether the associate's right to buy in constitutes an option to purchase or a first right of refusal.

Indemnification. The agreement should address each dentist's responsibility to the other. Should one party be held responsible for 1) any malpractice liability that results from the treatment of patients by the other dentist, or 2) any non-malpractice liability that results from negligent acts by the other dentist.

Conclusion

Written agreements of any kind (especially written associateship agreements) always create a "win-win" opportunity for the parties involved.

Stuart J. Oberman, Esq., has extensive experience in representing dentists in such as dental practice transitions, dental partnership agreements, partnership buy-ins, dental MSOs, commercial leasing, entity formation (professional corporations, limited liability companies), real estate transactions, employment law, dental board defense, estate planning, including wills and trusts, and other business transactions which a dentist will face during his or her career. In 1984, Mr. Oberman graduated from Urbana University, where he received a Bachelor of Science degree, and in 1992, he graduated cum laude from John Marshall Law School. Upon graduating from law school, Mr. Oberman served as in-house counsel for a Fortune 500 Company. He is a member of the State Bar of Georgia, and is authorized to practice before the Georgia Court of Appeals, Georgia Supreme Court, United District Court for the Northern District of Georgia, United District Court for the Middle District of Georgia, and the Eleventh Circuit Court of Appeals. Mr. Oberman has performed Table Clinics at the Hinman, lectured at dental societies and dental study clubs, and has also spoken at the Medical College of Georgia School of Dentistry. In addition, Mr. Oberman has written articles for dental publications such as Doctor of Dentistry and Georgia Dental Practice Solutions. For questions or comments regarding this article, visit www.gadentalattorney.com or call (770) 554-1400.