Buyout Amount - Physician Contract Glossary

Buyout Amount

Definition

A fee you can pay to void a non-compete or similar restrictive covenant.

Examples in Context

“The physician may terminate the non-compete by paying a $50,000 buyout.”

“If the physician’s employment ends without cause, they may cancel the non-compete by paying an amount equal to six months' base salary.”

“In the event of termination, the physician may pay a $25,000 fee to practice within a 10-mile radius of the employer’s primary office.”

Implications for Physicians

• Provides an escape route if you want to stay in the area.
• Can be costly and requires financial planning.
• May allow you to continue serving your established patient base.

Negotiation Tips

• Ask for a predefined buyout amount rather than one determined later through arbitration.
• Request a reduced fee if you resign early in the contract or if the employer terminates your employment without cause.
• Ensure the buyout calculation method is clearly stated to avoid disputes.

Red Flags and Pitfalls

• Ambiguous language about how the buyout is calculated can lead to costly disputes.
• High buyout fees may effectively force you to relocate or change specialties.
• Some contracts allow the employer to reject the buyout even if payment is offered.

Related Terms

• Covenant Not to Compete
• Geographic Scope
• Restricted Activities

FAQs

• “Can I avoid the buyout altogether?”
  • Yes, if you negotiate to remove or reduce the non-compete clause entirely.
• “How is the buyout fee calculated?”
  • It may be a fixed fee, a percentage of your salary, or an amount tied to your previous year’s collections.
• “Can I negotiate installment payments for my buyout?”
  • Yes, some employers will accept buyout payments over several months to ease the financial burden.
• “Does the buyout fee apply if I am terminated without cause?”
  • In many cases, you can negotiate for the buyout to be waived if your employer ends the contract without cause.

Legal Disclaimer

The information provided in this glossary is for educational and informational purposes only and should not be construed as legal advice. While we strive to provide accurate and up-to-date information, this content is intended to help physicians better understand common contract terms and does not replace professional legal guidance.

For personalized advice regarding your employment contract or other legal concerns, we strongly recommend consulting with a qualified attorney who specializes in physician employment contracts.

You can find experienced legal professionals through our Physician Contract Lawyer Directory.