Physician Contract Review in Alabama

A physician employment agreement is usually presented as standard. Much of it genuinely is. But a handful of provisions decide what the next several years of your working life look like, and in Alabama one of them behaves very differently from what most physicians expect.

This page covers what to read closely before you sign, starting with the restrictive covenant, because that is the term physicians most often assume is settled when it is not.

The restrictive covenant is not what most physicians assume

Under Alabama Code Section 8-1-190(a), every contract by which anyone is restrained from exercising a lawful profession, trade, or business is void to that extent, unless it fits one of six exceptions the statute lists. Alabama courts have long read the word profession to carry real weight, and have held that non-compete agreements are generally unenforceable against professionals. That doctrine has been applied to physicians, veterinarians, accountants, and licensed physical therapists, among others.

Two things follow. First, a non-compete in a physician agreement may have far less force than the document implies. Second, this is judicial interpretation of the word profession rather than a carve-out written into the statute, so the question for any individual physician is whether the specific role qualifies. That is argued, not assumed.

The non-solicitation clause is a different animal

Section 8-1-190(b)(5) treats solicitation of current customers separately, with its own presumption: restraints of 18 months, or as long as post-separation consideration is paid, whichever is greater, are presumed reasonable. Physician agreements often go wider than that, reaching patients, referral sources, staff, and vendors, and those do not all sit neatly inside the statutory exception. Whether a non-solicitation provision survives against a professional where a non-compete would not is an area Alabama courts are still working out.

The practical consequence is that a physician who correctly concludes the non-compete has no teeth may still be bound by the clause a few paragraphs below it. They read as two separate questions. More detail on both in the guide to non-compete enforceability in Alabama.

Who pays for tail coverage?

If your malpractice policy is claims-made rather than occurrence-based, coverage ends when the policy ends. Tail coverage extends protection for claims filed after you leave about care delivered while you were there. The agreement decides who pays for it, and that allocation is negotiable more often than physicians realise.

Worth confirming in writing: whether the policy is claims-made or occurrence, who buys the tail, whether the obligation shifts depending on how the employment ends, and whether the employer will cover it if they terminate you without cause.

Compensation is a structure, not a number

The headline figure is the least interesting part of the compensation section. What matters is how the pieces fit together:

• Base salary, and whether it is guaranteed or a draw against production
• The productivity formula, how it is calculated, and who controls the inputs
• When any guarantee period ends and what replaces it
• Whether a signing bonus or relocation payment must be repaid, and on what timeline
• Whether unpaid production survives your departure or is forfeited
• Benefits, CME allowance, licensing and society dues, and who pays them

Which other terms reward slowing down?

Term and termination

How long the agreement runs, whether it renews automatically, how much notice either side must give, and what counts as cause. Without-cause termination with a short notice period cuts both ways, and it interacts directly with any tail obligation and any repayment clause.

Call coverage

Frequency, how it is distributed among the group, whether it is compensated separately, and whether the employer can change the arrangement unilaterally. This is one of the most common sources of later friction and one of the least precisely drafted.

Partnership and buy-in

If the agreement contemplates a track to partnership or ownership, look for whether the terms are actually defined or merely gestured at. A buy-in described as to be determined is not a commitment. Valuation method, timeline, and what happens if the offer never comes are all fair to ask about before signing.

Assignment and change of control

Whether the agreement, and your restrictive covenant with it, can be assigned to a buyer if the practice is acquired. Physicians sometimes discover their non-compete now runs in favour of an organisation they never chose to work for.

What does a review include?

We read the entire agreement, identify unfavorable and missing terms, explain every major provision in plain English, and give you specific recommended changes. If the stakes justify it, we can also communicate directly with the other party or their attorney to get terms revised.

Already signed? Review still helps. A review of an existing agreement sets out your rights and obligations, what the contract says about termination and renewal, and your options before you take a step that affects them.

What review costs

A physician employment agreement is usually long, and length is one of the four things that drive cost. Stakes, whether negotiation is wanted, and turnaround are the others. Scope and cost are agreed at the consultation, before any work starts. What drives contract review cost.

Frequently Asked Questions

Are non-compete agreements enforceable against physicians in Alabama?

Often they are not. Alabama Code Section 8-1-190(a) voids contracts restraining a lawful profession, and Alabama courts have long read profession to cover licensed practitioners including physicians, veterinarians, accountants, and licensed physical therapists. Many physicians sign agreements assuming the non-compete binds them when Alabama law may say otherwise. The analysis still turns on the specific role and the specific agreement, so it calls for a review rather than an assumption in either direction.

Does that mean I can ignore the non-compete in my physician contract?

No. An unenforceable restriction is not the same as a restriction that does not exist, and the determination is fact-specific. An employer can still attempt to enforce it, and the non-solicitation clause sitting nearby may operate differently. The useful step is knowing where you actually stand before you act, not assuming the clause is either binding or worthless.

What is tail coverage and who pays for it?

If your malpractice policy is claims-made rather than occurrence-based, coverage ends when the policy ends. Tail coverage extends protection for claims filed after you leave about care delivered while you were employed. The agreement decides who buys it. That allocation is negotiable more often than physicians expect, and it is worth confirming whether the obligation changes depending on how the employment ends.

What should I look for in the compensation section of a physician contract?

How the pieces interact rather than the headline number. Whether base salary is guaranteed or a draw against production, how the productivity formula is calculated and who controls the inputs, when any guarantee period ends, whether a signing or relocation bonus must be repaid and on what timeline, and whether unpaid production survives your departure or is forfeited.

Should I have a physician employment contract reviewed before signing?

Before signing is when your leverage is highest and when changes are cheapest to make. That said, review after signing is still useful: it establishes what your notice obligations are, what the restrictive covenant restricts, and what your options look like before you take a step that affects your rights.

Can a physician employment contract be negotiated in Alabama?

Usually yes, even when it is presented as standard. Compensation structure, call frequency, notice periods, tail coverage allocation, and the scope and duration of restrictive covenants are all commonly negotiated. We offer review on its own, or review plus negotiation where we communicate directly with the other party or their attorney to get terms revised.

What happens to my non-compete if the practice is sold?

That depends on the assignment and change of control language. Some agreements allow the employer to assign the contract, and the restrictive covenant with it, to a buyer. Physicians sometimes find their non-compete now runs in favour of an organisation they never chose to work for. It is easier to check before signing rather than after an acquisition.

How long can a physician non-compete last in Alabama?

The statute sets presumptions rather than caps. For an employee non-compete under Section 8-1-190(b)(4), restraints of two years or less are presumed reasonable. A longer restraint is not automatically void but loses the presumption. For physicians the prior question usually matters more: whether the professional doctrine means the restraint is void regardless of its length.

What is the difference between a non-compete and a non-solicitation in a physician agreement?

A non-compete restricts where and whether you can practice. A non-solicitation restricts whom you can approach. Alabama treats them under separate statutory exceptions with different time presumptions, and they can survive or fail independently. A physician may find the non-compete unenforceable while the non-solicitation still has force.

Do you review contracts for physician assistants and nurse practitioners?

Yes. We review employment and contractor agreements across licensed professions, and the same questions apply: restrictive covenants, compensation structure, termination and notice, and any tail or insurance obligation. Whether the professional doctrine reaches a particular role is one of the things a review examines rather than assumes.

How much does physician contract review cost in Alabama?

It depends, and we will tell you what it depends on rather than hiding the ball. Four things drive the number: the length of the document, what is at stake if it goes wrong, whether you want negotiation or just understanding, and how fast you need it. We explain the expected scope and cost for your specific contract at the consultation, before any work begins.

This article is general information about Alabama law, not legal advice about your agreement. Physician contract questions are fact-specific, and the outcome depends on your role, your contract, and your working relationship.