Healthcare Employment Agreement (Hawaii)

HEALTHCARE EMPLOYMENT AGREEMENT

(Hawaii — Physician / NP / PA Comprehensive Template)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Engagement; Duties & Authority
4. Compensation & Benefits
5. Term; Renewal; Termination
6. Representations & Warranties
7. Covenants & Restrictions (Confidentiality; Non-Solicit; Non-Compete)
8. Default; Notice & Remedies
9. Risk Allocation (Malpractice; Tail; Indemnity)
10. Dispute Resolution
11. General Provisions
12. Execution Block
13. Schedules & Exhibits

1. DOCUMENT HEADER

1.1 Parties

This Healthcare Employment Agreement (the "Agreement") is entered into and made effective as of [EFFECTIVE DATE] (the "Effective Date") by and between:

(a) [EMPLOYER NAME], a Hawaii [professional corporation / limited liability company / nonprofit corporation] with its principal place of business at [ADDRESS], [CITY], Hawaii [ZIP] ("Employer"); and

(b) [EMPLOYEE NAME, DEGREE/CREDENTIALS], an individual holding a current and unrestricted license issued by the Hawaii Medical Board / Hawaii Board of Nursing / Hawaii Board of Medical Examiners (PA) (License No. [____________]) ("Employee").

1.2 Recitals

A. Employer is authorized under HRS ch. 453 and HRS ch. 416/414 (as applicable) to engage licensed healthcare professionals in Hawaii.
B. Employee is duly licensed under HRS ch. 453 (physicians/PAs) or HRS ch. 457 (RNs/APRNs) and desires to provide professional Services in accordance with Applicable Law.
C. The Parties wish to set forth the terms of Employee's employment in compliance with Hawaii law, the federal Stark Law, Anti-Kickback Statute, and HIPAA.

NOW, THEREFORE, in consideration of the mutual covenants set forth below, the Parties agree as follows.

2. DEFINITIONS

"Applicable Law" — All federal, Hawaii, and county statutes, rules, and regulations, including HRS ch. 453, HRS ch. 671, HRS ch. 480, 42 U.S.C. § 1395nn (Stark), 42 U.S.C. § 1320a-7b (AKS), and HIPAA.

"Confidential Information" — Has the meaning set forth in Section 7.2.

"DEA" — United States Drug Enforcement Administration.

"Legitimate Purpose" — A protectable business interest within the meaning of Prudential Locations LLC v. Gagnon, 151 Haw. 136 (2022), other than the mere prevention of ordinary competition.

"Malpractice Insurance" — Professional liability coverage as required under Section 9.3.

"Services" — Professional clinical and related administrative services described in Sections 3.2 – 3.4.

"Term" — Has the meaning set forth in Section 5.1.

3. ENGAGEMENT; DUTIES & AUTHORITY

3.1 Position. Employer employs Employee as [TITLE, e.g., Staff Physician — Internal Medicine / Nurse Practitioner / Physician Assistant], reporting to [SUPERVISOR/MEDICAL DIRECTOR].

3.2 Primary Practice Site. Employee shall principally render Services at [PRIMARY LOCATION, ISLAND], with reasonable rotation to satellite sites within [COUNTY], Hawaii on [___] days' notice.

3.3 Scope of Practice.
(a) Physicians: practice in conformity with HRS ch. 453 and the rules of the Hawaii Medical Board.
(b) APRNs: practice in conformity with HRS § 457-8.6 and the rules of the Hawaii Board of Nursing, including prescriptive authority.
(c) PAs: practice in conformity with HRS § 453-5.3 under a supervisory/collaborative arrangement.

3.4 Licensing & Credentialing. Employee shall maintain at all times: (i) unrestricted Hawaii license; (ii) current DEA registration and Hawaii controlled-substances registration under HRS ch. 329; (iii) Board Certification (if represented); and (iv) hospital and payer credentials reasonably required by Employer.

3.5 Independent Professional Judgment. Nothing in this Agreement shall be construed to direct or control Employee's exercise of independent medical judgment.

3.6 No Fee-Splitting. Consistent with HRS § 453-8(a)(10), no compensation payable under this Agreement shall constitute the division of professional fees with a non-licensee. The compensation structure in Section 4 is intended to comply with the bona-fide-employment safe harbors under Stark and AKS.

4. COMPENSATION & BENEFITS

4.1 Base Salary. $[AMOUNT] per annum, payable in accordance with Employer's payroll practices and HRS ch. 388 (Hawaii Payment of Wages Law).

4.2 Incentive Compensation. Productivity and quality incentives are governed by Schedule A. The Parties intend the incentive plan to satisfy the bona-fide-employment exception under 42 U.S.C. § 1395nn(e)(2) and the AKS employee safe harbor at 42 C.F.R. § 1001.952(i).

4.3 Signing Bonus / Loan Repayment Assistance. [IF APPLICABLE] $[AMOUNT], subject to forgiveness/repayment terms in Schedule B.

4.4 Benefits. Health, dental, retirement, and disability coverage on the same terms as similarly situated employees, including temporary disability per HRS ch. 392 and prepaid health care under HRS ch. 393.

4.5 PTO; CME. Accrual of ☐ hours per pay period; CME reimbursement up to $[AMOUNT] annually with ☐ CME leave days.

4.6 Expense Reimbursement. Reasonable business expenses reimbursed pursuant to Employer policy.

5. TERM; RENEWAL; TERMINATION

5.1 Term. Initial Term of [THREE (3)] years from the Effective Date, automatically renewing for successive [ONE (1)-year] Renewal Terms absent [90] days' written notice of non-renewal.

5.2 Termination Without Cause. Either Party on [90] days' written notice.

5.3 Termination for Cause. Cause includes (i) material uncured breach; (ii) loss, suspension, or material restriction of Employee's Hawaii license, DEA registration, hospital privileges, or Medicare/Medicaid eligibility; (iii) exclusion from any federal healthcare program; (iv) conviction of a felony or crime of moral turpitude; (v) willful misconduct, gross negligence, or impairment affecting patient care; or (vi) violation of Employer's compliance program after written warning.

5.4 Effect of Termination.
(a) Final wages paid in accordance with HRS § 388-3.
(b) Employee shall cooperate in the orderly transfer of patient care, including patient notification consistent with Hawaii Medical Board Rules and AMA continuity-of-care guidance.

5.5 Survival. Sections 6, 7.2 – 7.4, 8, 9, 10, and 11 survive termination.

6. REPRESENTATIONS & WARRANTIES

6.1 Each Party represents authority to enter into this Agreement and absence of conflicting obligations.

6.2 Employee further represents that all licenses are current and unrestricted; Employee has not been excluded from any federal healthcare program (OIG LEIE / SAM); and Employee will promptly disclose any event that would render any representation inaccurate.

7. COVENANTS & RESTRICTIONS

7.1 Compliance with Law. Employee shall perform Services in accordance with Applicable Law and Employer's compliance program (Stark, AKS, HIPAA, HRS ch. 453).

7.2 Confidentiality. Employee shall not, during or after employment, use or disclose Employer's Confidential Information (trade secrets under HRS ch. 482B; HIPAA-protected PHI; proprietary business information) except as authorized or required by law.

7.3 Non-Solicitation of Patients and Employees. For [ONE (1)] year after termination, Employee shall not knowingly (a) solicit Employer's patients for competitive professional services using Confidential Information, or (b) solicit Employer's employees or contractors to terminate their engagement. Generalized advertising and patient-initiated contact are excluded.

7.4 Non-Competition (Physicians Only).

(a) Scope. During employment and for [TWELVE (12)] months thereafter, Employee shall not engage in the practice of [SPECIALTY] within a [___]-mile radius of any practice site at which Employee provided Services during the [twelve (12)] months preceding termination, provided that this restriction shall not apply to: (i) emergency medical care; (ii) academic, teaching, or military service; or (iii) services provided to existing patients of Employee who proactively seek Employee's care.

(b) Legitimate Purpose. Employer represents, and Employee acknowledges, that this restriction is supported by Employer's legitimate interest in protecting (i) Confidential Information and trade secrets; (ii) Employer's substantial investment in Employee's onboarding, credentialing, and patient-panel development; and (iii) the goodwill of the practice, consistent with Prudential Locations LLC v. Gagnon, 151 Haw. 136 (2022).

(c) Reformation. If any court finds the scope, duration, or geography unreasonable, the court is authorized under HRS § 480-4 jurisprudence and common law to reform the covenant to the minimum extent necessary to render it enforceable.

7.5 Intellectual Property. All works conceived in the course of employment relating to Employer's business are "work made for hire" and assigned to Employer.

8. DEFAULT; NOTICE & REMEDIES

8.1 An Event of Default occurs upon (a) any uncured Cause event under Section 5.3; (b) failure to pay any undisputed amount within [10] business days after notice; or (c) material breach of Section 7.

8.2 Notice and [30]-day cure period ([10] days for monetary defaults).

8.3 The non-defaulting Party may terminate, seek specific performance or injunctive relief, and recover reasonable attorneys' fees and costs.

9. RISK ALLOCATION

9.1 Indemnification.
(a) Employee indemnifies Employer for Losses arising from Employee's gross negligence, willful misconduct, or services outside the scope of this Agreement.
(b) Employer indemnifies Employee for Losses arising from Employer's business operations not attributable to Employee.

9.2 Limitation of Liability. Except for indemnification, breaches of confidentiality, or gross negligence/willful misconduct, aggregate liability is capped at the greater of (i) malpractice limits or (ii) $[AMOUNT].

9.3 Malpractice Insurance.
(a) Coverage. Employer shall procure and maintain professional liability coverage of not less than $[1,000,000] per claim / $[3,000,000] aggregate (or higher as required by Employer's hospital privileges or payer contracts).
(b) Tail / ERP. If coverage is claims-made, Employer shall procure extended-reporting (tail) coverage with the same limits for not less than [___] years following termination, OR the Parties shall allocate the cost of tail premium as follows: Employer [__]%; Employee [__]%.
(c) NPDB. Employer and its carrier shall comply with NPDB reporting obligations under 45 C.F.R. § 60.7 for any payments made on Employee's behalf.

9.4 Force Majeure. Standard force majeure clause, including pandemic, lava flow, hurricane, tsunami, and governmental orders affecting island operations.

10. DISPUTE RESOLUTION

10.1 Governing Law. Hawaii law, without regard to conflict-of-laws principles.

10.2 Forum. State or federal courts located in [Honolulu / Maui / Hawaii / Kauai] County, Hawaii.

10.3 Arbitration (Optional). Upon mutual written election, disputes shall be resolved by confidential binding arbitration in Honolulu administered by [Dispute Prevention & Resolution, Inc. / AAA] under its Employment Rules. Either Party may seek interim injunctive relief in court.

10.4 Injunctive Relief. Injunctive relief is available to enforce Sections 7.2 – 7.4 without bond to the extent permitted by law.

10.5 Attorneys' Fees. The prevailing Party is entitled to reasonable attorneys' fees and costs, including under HRS § 607-14 to the extent applicable.

11. GENERAL PROVISIONS

11.1 Amendments. Only in a writing signed by both Parties.

11.2 Assignment. Employee may not assign. Employer may assign to a successor by merger or acquisition.

11.3 Severability; Reformation. Invalid provisions shall be reformed to the minimum extent necessary.

11.4 Entire Agreement. This Agreement and its Schedules constitute the entire agreement and supersede prior agreements on the subject matter.

11.5 Counterparts; Electronic Signatures. Counterparts and electronic signatures (HRS ch. 489E — Hawaii UETA) are deemed originals.

11.6 Notices. Written notice by hand delivery, overnight courier, or certified mail to the addresses listed in the Execution Block.

12. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

Acknowledgments:

☐ Employee acknowledges receipt of Employer's compliance program and HIPAA policies.
☐ Employee acknowledges the restrictive covenants in Section 7 are supported by a legitimate purpose and reasonable in scope.
☐ Employee acknowledges receipt of malpractice coverage summary and tail-coverage terms.

13. SCHEDULES & EXHIBITS

• Schedule A — Productivity & Quality Incentive Plan (Stark/AKS-compliant)
• Schedule B — Signing Bonus / Loan Repayment Assistance Terms
• Exhibit 1 — Job Description & Call Schedule
• Exhibit 2 — Hawaii Medical Board / Board of Nursing Compliance Acknowledgment
• Exhibit 3 — Tail / Extended Reporting Period Allocation

SOURCES AND REFERENCES

• HRS § 480-4 — Combinations in restraint of trade
• HRS § 480-4(d) — Technology business non-compete prohibition (2015 Act)
• Prudential Locations LLC v. Gagnon, 151 Haw. 136 (2022)
• HRS ch. 453 — Hawaii Medical Practice Act
• HRS § 453-8(a)(10) — Fee-splitting
• HRS § 453-5.3 — Physician Assistants
• HRS § 457-8.6 — APRN prescriptive authority
• HRS ch. 671 — Medical Torts
• 42 U.S.C. § 1395nn (Stark); 42 U.S.C. § 1320a-7b (AKS)