Associate Agreement Essentials (and Why a Fair Non-Compete Holds Up)

The ADA's 2020 guide, Dentist Employment Agreements: A Guide to Key Legal Provisions, lays out the standard set of provisions a dentist employment agreement should address.

Walking your own associate offer through the same list is a useful discipline for the practice side, too.

The guide's own section headings, in order, are: employee vs. independent contractor, the employee's duties, compensation, benefits, term and termination, malpractice insurance, non-compete, non-solicitation, dispute resolution, and liquidated damages.

• Employee vs. independent contractor — the agreement should say which one your associate is. The classification carries different tax, benefits, and liability consequences, and shouldn't be left implied by the pay structure.
• Duties — describe the scope of what the associate will actually do. Ambiguity here is what turns into a dispute over who reviews a diagnosis or covers on-call time.
• Compensation — state the actual pay basis and how it's calculated. See our salary guide and the career-guide article on how associate dentists are paid for the structures in use; this article isn't the place to set your number.
• Benefits — spell out what's included, and what isn't, rather than leaving "benefits" as a placeholder.
• Term and termination — the length of the agreement, renewal terms, and what triggers termination on either side, including notice periods.
• Malpractice insurance — see below; the guide spends real time here, and it's the provision generic templates most often shortchange.
• Non-compete — see below; a fair one is more likely to survive a challenge than a broad one.
• Non-solicitation — a related but separate clause covering whether a departing associate can recruit your patients or staff.
• Dispute resolution — how disagreements over the contract itself get resolved, rather than assumed after the fact.
• Liquidated damages — a pre-agreed damages figure for breach of a specific provision, most commonly the non-compete.

The guide frames the whole list as something to work through carefully before signing, not after: it precedes this list with a section on due diligence and negotiability, and follows it with sections on hiring a lawyer to review the agreement and on negotiating its terms.

The guide draws a distinction worth building into the agreement itself: a claims-made policy only covers a claim if both the incident and the report of the claim occur while the policy is in force, while an occurrence policy covers an incident from its policy period no matter when the claim is later filed.

If an associate's claims-made policy has already expired or been terminated by the time a claim surfaces, there's no coverage unless a "tail" — an extension of the policy — is purchased.

The guide notes tail coverage is generally expensive, though some policies provide it at no cost if the departure is for death, disability, or retirement.

Whoever is leaving may want the agreement to spell out who has the right to procure tail coverage, and at what cost, before it becomes an urgent question on the way out the door.

The ADA does not offer set guidelines on appropriate liability limits, so treat any specific figure you see quoted elsewhere as one insurer's or one market's observation from 2020, not a standard to match.

See our claims-made vs. occurrence guide for the fuller explanation from the associate's side — it's the same distinction, and worth reading before you write the clause.

If your agreement includes a non-compete, the guide's core point is about scope, not just whether to have one at all: a non-compete "in order to be valid, will almost certainly be limited to (i) a certain period of time following conclusion of the employment relationship, and (ii) a certain geographic area," and is "generally only enforceable to the extent that it is reasonably limited in time and geographical scope." A clause with no real limit on either axis is exactly the kind of clause that's less likely to be enforced if it's ever challenged — precision on duration and radius isn't a courtesy to the associate, it's what makes the clause worth having.

The guide also notes that some courts weigh a non-compete against three interests: yours as the employer, the burden the restriction places on the associate's ability to keep working, and the public's interest in patients being able to see the provider they prefer.

A narrower clause, tied to where your practice actually draws patients rather than an entire region, is easier to defend on all three counts than a broad one.

None of this tells you what specific duration or radius to use.

The guide's own sample clause language uses specific numbers for illustration, and treats them as sample text rather than a recommended standard — so we're not printing a number here as if it were one, either.

Enforceability of a non-compete for a dentist varies by state; see our non-compete guide for that landscape, and have your specific clause reviewed by a healthcare attorney licensed in your state before you rely on it.

The ADA guide is explicit that it isn't legal advice: "We do not, in making these materials available to you, intend to give you legal or professional advice or opinions... the law varies from jurisdiction to jurisdiction." Treat it, and this article, as an orientation to what a complete agreement covers — not a substitute for a healthcare attorney licensed in your state drafting or reviewing the actual document, on the compensation structure and the non-compete and dispute-resolution terms alike.

The guide itself follows its provision list with sections on hiring a lawyer to review an employment agreement and on negotiating its terms — worth reading in full if you're drafting your first associate agreement rather than working from counsel's own template.