Veterinary Employment Contracts: 10 Red Flags to Spot Before You Sign
By Omar A. Lopez, Esq., Employment Attorney and General Counsel, Vet Candy
Omar A. Lopez is a licensed employment attorney in New Jersey and New York and serves as General Counsel for Vet Candy. He has reviewed hundreds of veterinary employment contracts and has seen the same costly mistakes made by otherwise brilliant clinicians who trusted a handshake and a good feeling instead of reading the fine print.
You worked for eight years to get your DVM. You passed the NAVLE. You nailed the interview. And then someone slides a twelve-page employment agreement across the table and says just sign here and you can start next Monday.
Stop.
The employment contract is the most consequential document you will sign in your veterinary career outside of a practice purchase agreement, and it is the one most veterinary professionals review the least carefully. What is written in that document governs your income, your schedule, your clinical autonomy, your ability to leave, and in some cases your ability to practice in the same city after you do. It deserves your full attention before it gets your signature. Here is what to look for.
The Non-Compete Clause
This is the provision that keeps employment attorneys in business and keeps veterinary professionals trapped in jobs they want to leave. A non-compete clause prohibits you from working for a competing practice within a defined geographic radius for a defined period of time after your employment ends. In practical terms, this can mean that if you leave a practice in Stamford, Connecticut, you cannot work at another veterinary practice within twenty miles for two years.
Non-competes are enforceable to varying degrees depending on the state. Some states, including California, have effectively banned them. Others enforce them aggressively if they are drafted reasonably. The key variables to scrutinize are the geographic radius, the duration, and the definition of competing business. A two-mile radius for one year in a rural area is very different from a twenty-mile radius for two years in a dense suburban market. One is manageable. The other can functionally eliminate your ability to practice in the area where you have built your life, your professional reputation, and your client relationships.
Do not assume a non-compete is non-negotiable just because it is in the document. Everything in an employment contract is negotiable before you sign. Nothing is negotiable after.
The Non-Solicitation Clause
Often packaged alongside the non-compete and just as important. A non-solicitation clause prohibits you from soliciting clients, colleagues, or staff from your former employer after you leave. This means you cannot send a letter to your longtime clients telling them where you are going. You cannot recruit your technician to join your new practice. You cannot post on social media that you have moved and invite people to follow you.
Non-solicitation clauses are generally more enforceable than non-competes in most states because courts view them as protecting legitimate business interests without completely preventing you from earning a living. Read this clause carefully and understand exactly what conduct it prohibits. The difference between announcing your new position generally and directly soliciting specific clients is a legal line worth understanding before you cross it accidentally.
The At-Will vs. Term Employment Distinction
Most veterinary employment agreements are at-will, meaning either party can end the employment relationship at any time for any reason with or without notice. Some agreements include a defined term, such as a one-year or two-year contract, which provides more stability but also more complexity around termination. If your agreement is at-will, look for the notice requirement. How many days notice are you required to give? How many days notice is the employer required to give you? These should be mutual and they frequently are not. A contract that requires you to give sixty days notice but allows the employer to terminate you immediately is not a balanced agreement.
If your agreement is a term contract, understand the termination for cause provisions. What constitutes cause? Is it defined specifically or is the definition broad enough that the employer has significant discretion? A termination for cause provision that is drafted broadly enough to include any conduct the employer considers unprofessional gives the employer the power to terminate you for cause and potentially deny you severance, even in situations that most reasonable people would not consider a terminable offense.
The Compensation Structure
Base salary is the number everyone negotiates. It is also only part of your compensation picture and sometimes not the most important part. Read the production pay provisions in complete detail. What is the threshold production percentage above which you earn additional income? How is production calculated? Is it based on gross charges, collected revenue, or something else? How frequently is production reconciled and paid out? What happens to production bonuses if you leave mid-year?
Production pay disputes are among the most common employment conflicts in veterinary medicine and most of them stem from ambiguity in the original contract language. If the production pay structure is not described with complete mathematical clarity in the contract, ask for that clarity in writing before you sign.
Also read the provisions around benefits carefully. Health insurance, professional liability insurance, continuing education budget, DEA registration reimbursement, license fee coverage, and retirement plan contributions all have real dollar values. A contract with a $95,000 base salary and full benefits coverage may be worth more in total compensation than one with a $105,000 base and no benefit contributions. Calculate the full package, not just the headline number.
The Intellectual Property and Invention Assignment Clause
Less common in general practice agreements but increasingly present in contracts with corporate groups, specialty hospitals, and any practice involved in research or product development. An intellectual property assignment clause assigns ownership of anything you create during your employment to the employer. In a pure clinical context this is usually not significant. In a context where you are developing training materials, clinical protocols, research findings, or any content that might have independent value, it is worth understanding exactly what you are assigning and to whom.
If you are an associate who blogs, podcasts, creates educational content, or has any professional activities outside of your clinical work, make sure the intellectual property provisions in your employment agreement do not inadvertently capture those activities.
The Dispute Resolution Clause
Many employment agreements now include mandatory arbitration clauses that require any employment dispute to be resolved through private arbitration rather than through the court system. Arbitration is faster and more private than litigation but it also typically favors employers statistically and limits your ability to appeal an unfavorable outcome. If your contract includes a mandatory arbitration clause, understand what it covers, where the arbitration would take place, and who pays the arbitration costs.
Also look for the governing law provision, which specifies which state's law applies to the contract. If you are practicing in one state but the contract specifies the law of another state, the provisions that apply to your non-compete, your at-will status, and your dispute resolution rights may be different from what you expect.
What To Do Before You Sign
Have an employment attorney review the contract before you sign it. This is not an overreaction. It is the single most cost-effective professional investment you can make at the beginning of a new position. A one-time legal review of an employment agreement costs a fraction of what a disputed non-compete, a production pay conflict, or a wrongful termination claim costs if things go wrong later. You would not perform surgery without the right training. Do not sign an employment contract without the right review.
Ask questions before you sign, not after. Any provision you do not understand is a provision worth asking about. An employer who is unwilling to explain what a clause means or unwilling to negotiate a provision that is unreasonable is telling you something important about how they will behave when the employment relationship is under stress.
And remember: the best time to negotiate is before you have accepted. Once you have signed, the leverage is gone.
Omar A. Lopez, Esq. is a licensed employment attorney in New Jersey and New York and serves as General Counsel for Vet Candy. Veterinary professionals with questions about employment contracts, non-compete provisions, or workplace disputes can reach out through myvetcandy.com. This article is for informational purposes only and does not constitute legal advice or create an attorney-client relationship.