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Probationary Periods might not be the best idea for healthcare employers.

Posted by Doris Dike | Jan 21, 2022 | 0 Comments

A 30,60, or 90 day probationary period may sound like a good idea in theory, but may end up being a thorn in the side for both employees and employers. 

What is a probationary period and is your medical office set up to handle this type of evaluation?

A probationary period, or an employee trial period, provides an employer an opportunity to evaluate an employee on both hard and soft skills.  A successful probationary period offers employees a mentor who advises employee's on policies and procedures, training on necessary EHR systems or other medical devices, conducts customary reviews with the employee to provide counseling on any deficiencies, and provides employees with guidance on their responsibilities of the job. Many small or midsized medical practices struggle to offer meaningful probationary periods because providers are busy tending to patients and office administrators are often making up rules as they go. This becomes frustrating for new employees who are left directionless during the probationary time frame without benefits or other perks of fulltime employment.

At will employment

The general rule in most states, is that outside an agreement between the parties, employment may end by either side during the process at will, for good cause, bad cause, or no cause at all. Essentially, this means that employees are deemed to be employed at the will of their employers unless they are protected by a discrimination statute, a specific retaliation statute, an employment contract, or a common law contract 

Termination before probationary period

 Many   business owners falsely believe that if they  terminate the employee within their probationary period that they may do so without any financial consequences; but this is not the case. Employees who are fired prior to the completion of probationary period may still accrue unemployment benefits if the employee has held their position for the necessary amount of time required in your state. Further, employees may not be fired for any illegal reasons that violate federal or state laws even if the firing occurs during the probationary period.

Implied contract and firing after probationary period

Once a probationary period has been completed, and the employee has been categorized as a full time employee, it can be seen that the nature of the employment relationship has changed from the at-will relationship to an implied agreement. Implied contract agreements are created when two or more parties have no written contract, but the law creates an obligation in the interest of fairness based on the parties' conduct or circumstances. Employees may be able to argue that once they have completed their probationary period  that they may only be able to be fired for cause.

A California case illustrates this theory best: In Walker v Northern San Diego County Hosp. Dist. (1982) 135 CA3d 896, an employer included a “Probationary Period” in its handbook to employee's.  the Handbook detailed that the employer reserved the right to terminate  the probationary employee's employment at any time within the time period specified by the agreement between the parties. The court here took this provision to imply that once the trial period had completed the employer would no longer have the unfettered right to dismiss the employee. By including the probationary provision, there was a triable issue of fact as to the existence of an implied-in-fact contract requiring just cause for termination.

Conclusion

Probationary periods are good way to weed out problematic job candidates but might be more headache than they are worth.   Employers would be better served avoiding probationary periods, especially if they own a busy healthcare practice with little administrative support.  Further, the at-will doctrine in most jurisdictions gives employers the most flexibility when it comes to terminating employment.

Doris Dike, Esq., is the founder and principal the Dike Law Group, a law firm focusing on employment, regulatory, and healthcare transactional law in Frisco, Texas. 

The information presented reflects general information that is current as of the date it was first published. In light of changes that may occur in the health care regulatory and compliance environments, the author's presentation of this information might become outdated. Please check with your individual legal and/or compliance advisor(s) or contact the DIKE LAW GROUP prior to taking any significant actions based upon the information and advice presented.

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