Healthcare Employment Agreement (Michigan)

HEALTHCARE EMPLOYMENT AGREEMENT

(Michigan - Physician / Nurse Practitioner / Physician Assistant)

1. PARTIES AND RECITALS

1.1 Parties

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

(a) [EMPLOYER NAME], a [Michigan professional corporation / P.L.L.C. / hospital / health system] with its principal place of business at [ADDRESS], [CITY], Michigan [ZIP] ("Employer"); and

(b) [EMPLOYEE NAME, M.D./D.O./N.P./P.A.], an individual licensed by the Michigan Department of Licensing and Regulatory Affairs ("LARA"), Bureau of Professional Licensing, License No. [____________] ("Employee").

1.2 Recitals

A. Employer engages in the delivery of professional healthcare services in the State of Michigan in accordance with the Michigan Public Health Code, MCL 333.16101 et seq.
B. Employee is duly licensed under the Public Health Code and the Medical Practice Act, MCL 333.17001 et seq. (or the applicable licensing article for the Employee's profession).
C. The Parties wish to set forth the terms of Employee's employment.

2. DEFINITIONS

"Applicable Law" - All federal, Michigan, and local statutes, rules, and regulations governing Services, including without limitation the Michigan Public Health Code (MCL 333.16101 et seq.), Medical Practice Act (MCL 333.17001 et seq.), the federal Stark Law (42 U.S.C. 1395nn), the Anti-Kickback Statute (42 U.S.C. 1320a-7b(b)), HIPAA (45 C.F.R. Parts 160 and 164), and the Michigan Medical Records Access Act (MCL 333.26261 et seq.).

"Base Salary" - The annual salary in Section 4.1(a).

"Board Certification" - Certification by the American Board of [SPECIALTY] or an equivalent body recognized by Employer.

"Cause" - The events in Section 5.4(b).

"Confidential Information" - Has the meaning in Section 7.2(a).

"DEA" - U.S. Drug Enforcement Administration.

"Malpractice Insurance" - Coverage required under Section 9.3.

"Services" - Professional and administrative healthcare services Employee performs under this Agreement.

3. ENGAGEMENT; DUTIES; LICENSURE

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

3.2 Primary Site. Employee shall principally render Services at [PRIMARY LOCATION] and at such additional sites within [COUNTY], Michigan, as Employer reasonably designates, with at least [30] days' prior written notice of any permanent reassignment beyond [25] miles.

3.3 Scope of Duties. Employee shall:
(a) Render Services in conformity with Applicable Law and Employer policies;
(b) Maintain complete, contemporaneous records in Employer's EHR;
(c) Participate in QA/peer review, utilization review, and risk management;
(d) Take on-call rotations as reasonably scheduled; and
(e) Perform reasonable administrative duties.

3.4 Licensure and Credentialing.
(a) Employee shall maintain (i) an unrestricted Michigan license; (ii) current Board Certification (if applicable); (iii) valid DEA registration and Michigan controlled-substance license under MCL 333.7303; and (iv) all hospital and payer credentials Employer requires.
(b) Employee shall immediately notify Employer of any complaint, investigation, allegation, or restriction affecting any license, registration, or credential.

3.5 Professional Judgment. Nothing herein shall be construed to interfere with Employee's independent professional judgment in patient care.

3.6 Scope of Practice. Employee shall practice only within the scope authorized by the Employee's Michigan license and any applicable practice agreement (for N.P./P.A., consistent with MCL 333.17048, MCL 333.17076, and the rules of the Michigan Board of Medicine / Osteopathic Medicine / Nursing).

4. COMPENSATION AND BENEFITS

4.1 Compensation.
(a) Base Salary. Employer shall pay Employee a Base Salary of $[AMOUNT] per annum, payable per Employer's standard payroll cycle, subject to withholdings.
(b) Incentive Compensation. Employee may earn incentive compensation under Schedule A. Any productivity-based bonus shall be structured to comply with Stark Law (42 U.S.C. 1395nn) and the Anti-Kickback Statute, and shall not be based directly or indirectly on the volume or value of referrals.
(c) Sign-On / Relocation. [IF APPLICABLE] Employer shall pay a one-time [sign-on / relocation] payment of $[AMOUNT] within [30] days after the Effective Date, subject to forgiveness/repayment under Schedule B.

4.2 Benefits. Employee may participate in Employer benefit plans on terms applicable to similarly situated employees.

4.3 PTO and CME.
(a) Employee shall accrue paid time off at a rate consistent with Employer policy and the Michigan Earned Sick Time Act (MCL 408.961 et seq.).
(b) Employer shall reimburse up to $[AMOUNT] per year for CME and shall provide up to [__] CME days annually.

4.4 Expense Reimbursement. Employer shall reimburse reasonable, documented business expenses per Employer policy.

4.5 No Fee-Splitting. No compensation under this Agreement shall be construed as fee-splitting prohibited under MCL 333.16221 or the rules of the Michigan Board of Medicine.

5. TERM; TERMINATION

5.1 Term. The Agreement begins on the Effective Date and continues for [THREE] years (the "Initial Term"), renewing automatically for [ONE-YEAR] Renewal Terms unless either Party delivers [90] days' written notice of non-renewal.

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

5.3 Termination by Mutual Agreement. The Parties may terminate at any time by written mutual consent.

5.4 Termination for Cause.
(a) Procedure. Written notice identifying the grounds; if curable, [30] days to cure.
(b) Cause includes: (i) material breach; (ii) loss, suspension, or restriction of license, DEA registration, controlled-substance license, or hospital privileges; (iii) exclusion from any federal or state healthcare program (42 U.S.C. 1320a-7); (iv) felony conviction or plea of nolo contendere, or any crime involving moral turpitude or healthcare fraud; (v) willful misconduct or gross negligence; (vi) violation of Employer's anti-harassment, discrimination, or substance-abuse policies; or (vii) any conduct giving rise to mandatory reporting under MCL 333.16221.

5.5 Effect of Termination.
(a) Employer shall pay all earned but unpaid Base Salary, accrued PTO (per policy), and reimbursable expenses through the date of termination, consistent with the Michigan Payment of Wages and Fringe Benefits Act (MCL 408.471 et seq.).
(b) Employee shall return all Employer property and cooperate in orderly transfer of patient care, including patient notification consistent with Michigan Board of Medicine guidance on patient abandonment and MCL 333.16213 (record retention; 7 years).

5.6 Survival. Sections 6, 7.2, 7.3, 7.4, 8, 9, 10, and 11 survive termination.

6. REPRESENTATIONS AND WARRANTIES

6.1 Mutual. Each Party represents that it has authority to enter into this Agreement, that it is binding and enforceable, and that performance does not violate any other agreement.

6.2 Employee. Employee additionally represents that:
(a) All licenses, certifications, and credentials are current and unrestricted;
(b) Employee is not subject to any non-compete, non-solicitation, or other restriction that would interfere with performance under this Agreement;
(c) Employee has not been excluded or sanctioned under 42 U.S.C. 1320a-7 or had any Medicare/Medicaid billing privileges revoked;
(d) Employee has disclosed all prior or pending malpractice claims, board investigations, and NPDB reports; and
(e) Employee shall promptly disclose any future event that would render the foregoing inaccurate.

7. COVENANTS AND RESTRICTIONS

7.1 Compliance. Employee shall comply with Applicable Law and Employer's compliance program (including Stark, AKS, HIPAA, and Michigan reporting duties under MCL 333.16221 and MCL 333.20175).

7.2 Confidentiality.
(a) "Confidential Information" includes Employer trade secrets, PHI under HIPAA, patient lists, fee schedules, payer contracts, business plans, and proprietary information, whether oral or written.
(b) Employee shall not use or disclose Confidential Information except as authorized or required by law.
(c) Upon termination, Employee shall return or securely destroy all Confidential Information.

7.3 Non-Competition.

(a) During employment and for [ONE (1)] year after termination, Employee shall not, directly or indirectly, render professional services materially competitive with the Services within a [___]-mile radius of [PRIMARY LOCATION] without Employer's prior written consent.
(b) This covenant is intended to protect Employer's reasonable competitive business interests, including patient relationships, goodwill, and confidential information.
(c) If any court finds any part of this covenant overbroad, the court is authorized under MCL 445.774a to limit the covenant to render it reasonable and enforce it as limited.
(d) This covenant does not apply if Employer terminates Employee without Cause or in breach of this Agreement.

7.4 Patient and Employee Non-Solicitation. For [ONE] year after termination, Employee shall not knowingly solicit Employer's active patients (those treated within the prior 24 months) for competing services, nor solicit Employer employees or contractors to terminate their engagement. General advertising not directed at Employer's patients is permitted.

7.5 Intellectual Property. All works, inventions, and improvements conceived in the course of employment and relating to Employer's business are works made for hire owned exclusively by Employer; Employee assigns all right, title, and interest therein.

7.6 Outside Activities. Outside professional activities (teaching, expert witness, consulting, locum tenens) require Employer's prior written consent.

8. DEFAULT AND REMEDIES

8.1 Events of Default. Any uncured Cause event under Section 5.4(b); failure to pay an undisputed monetary obligation within 10 business days after notice; or material violation of Employer's compliance program after written warning.

8.2 Notice and Cure. Written notice; 30 days to cure (10 days for monetary defaults).

8.3 Remedies. Termination; specific performance and injunctive relief (Section 10.5); recovery of reasonable attorney fees and costs.

8.4 Cumulative. All remedies are cumulative and non-exclusive.

9. RISK ALLOCATION

9.1 Indemnification.
(a) Employee Indemnity. Employee shall indemnify Employer for Losses arising from Employee's gross negligence, willful misconduct, fraud, or violation of Applicable Law.
(b) Employer Indemnity. Employer shall indemnify Employee for Losses arising out of Employer's business operations to the extent not attributable to Employee's acts or omissions.

9.2 Limitation of Liability. Except for indemnity, breach of confidentiality, or gross negligence/willful misconduct, each Party's aggregate liability is limited to the greater of (x) Malpractice Insurance limits or (y) $[AMOUNT].

9.3 Malpractice Insurance.
(a) Coverage. Employer shall maintain professional liability insurance covering Employee with limits of not less than $[1,000,000] per claim / $[3,000,000] aggregate.
(b) Tail Coverage. If claims-made coverage is provided, [Employer / Employee / Allocated per Schedule C] shall procure extended reporting ("tail") coverage of not less than [___] years following termination, with the same limits.
(c) Cooperation. Employee shall fully cooperate in claims investigation and defense.

9.4 NPDB Reporting. The Parties acknowledge that medical malpractice payments and certain adverse actions are reportable to the National Practitioner Data Bank under 45 C.F.R. Part 60 and 42 U.S.C. 11131 et seq.

9.5 Force Majeure. Neither Party is liable for delay or failure caused by events beyond reasonable control (e.g., natural disasters, epidemics, governmental orders), with prompt notice and resumption of performance when practicable.

10. DISPUTE RESOLUTION

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

10.2 Forum. Exclusive venue: the Circuit Court for [___] County, Michigan, or the U.S. District Court for the [Eastern / Western] District of Michigan, as applicable.

10.3 Optional Binding Arbitration.

(a) Any dispute may be submitted to confidential binding arbitration administered by the American Arbitration Association under its Employment Arbitration Rules (Healthcare Supplement), in [CITY], Michigan, before a single arbitrator.
(b) Either Party may seek interim injunctive relief from a court of competent jurisdiction.
(c) The arbitrator may award fees and costs consistent with Section 8.3.

10.4 Jury Trial Waiver (Optional).
EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN ANY ACTION ARISING UNDER THIS AGREEMENT.

10.5 Injunctive Relief. Either Party may seek temporary, preliminary, or permanent injunctive relief in the forum under Section 10.2 to enforce Sections 7.2, 7.3, and 7.4, without bond to the extent permitted by law.

11. GENERAL PROVISIONS

11.1 Amendments. Only in writing signed by both Parties.

11.2 Assignment. Employee may not assign. Employer may assign to a successor by merger, consolidation, or sale of substantially all assets/equity, provided the successor assumes Employer's obligations.

11.3 Severability; Reformation. Invalid provisions shall be reformed to the minimum extent necessary; remainder remains in effect. Consistent with MCL 445.774a, a court may limit any restrictive covenant.

11.4 Entire Agreement. This Agreement and all Schedules/Exhibits constitute the entire agreement and supersede prior agreements.

11.5 Counterparts; Electronic Signatures. Counterparts and electronic signatures (DocuSign/PDF) are effective under the Michigan Uniform Electronic Transactions Act, MCL 450.831 et seq.

11.6 Notices. All notices in writing, by personal delivery, overnight courier, or certified mail (return receipt) to the addresses below or as later designated.

11.7 Construction. Headings for convenience only; drafter rule waived.

12. EXECUTION

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

13. SCHEDULES AND EXHIBITS

• Schedule A - Productivity / Quality Incentive Plan (Stark/AKS-compliant)
• Schedule B - Sign-On / Relocation Repayment Terms
• Schedule C - Tail Coverage Allocation
• Exhibit 1 - Job Description and Performance Metrics
• Exhibit 2 - Acknowledgment of Compliance Program and Policies

SOURCES AND REFERENCES

• MCL 445.774a (Michigan Antitrust Reform Act - employee noncompetes)
• MCL 333.16101 et seq. (Public Health Code); MCL 333.17001 et seq. (Medical Practice Act)
• MCL 333.16221 (Disciplinary sanctions; fee-splitting prohibition)
• MCL 333.7303 (Controlled substance licensure)
• 42 U.S.C. 1395nn (Stark); 42 U.S.C. 1320a-7b(b) (AKS); 42 U.S.C. 1320a-7 (Exclusion)
• 45 C.F.R. Part 60 (NPDB); 42 U.S.C. 11131 et seq.
• Innovation Ventures, LLC v. Liquid Mfg., LLC, 499 Mich 491 (2016)
• Ryan, LLC v. FTC, 746 F. Supp. 3d 369 (N.D. Tex. 2024); FTC vote to accede to vacatur (Sept. 5, 2025)

Compliance checklist (☐ = to confirm before execution):
☐ Verify current scope-of-practice rules for N.P./P.A. supervision/practice agreement
☐ Confirm tail coverage allocation in Schedule C
☐ Confirm noncompete is reasonable in scope, duration, and geography
☐ Confirm incentive compensation complies with Stark/AKS
☐ Verify current MCL 333.16221 subsection citation for fee-splitting prohibition