Presentation is loading. Please wait.

Presentation is loading. Please wait.

Welcome. Legal Aspects Of Optometric Practice Pamela J. Miller, O.D., F.A.A.O., J.D. Highland, California.

Similar presentations

Presentation on theme: "Welcome. Legal Aspects Of Optometric Practice Pamela J. Miller, O.D., F.A.A.O., J.D. Highland, California."— Presentation transcript:

1 Welcome

2 Legal Aspects Of Optometric Practice Pamela J. Miller, O.D., F.A.A.O., J.D. Highland, California

3 Pamela J.Miller, O.D., J.D. Became owner: 1974 Staff size: 3 Member: AOA, former member CA St. Bd. of Optometry, National Academies of Practice in Optometry, staff O.D. San Bernardino Co. Medical Center SCCO 1973

4 Dr. Miller and staff Mission statement: To provide premium vision care by a warm, caring and supportive doctor and staff

5 Legal terms you need to know Plaintiff Defendant Doctrine of informed consent Duty to warn Duty to mitigate Document The average reasonable person standard

6 Legal concepts you need to know Respondeat superior: Let the master answer Deep pockets Joint and severable liability Res ipsa loquitur: The thing speaks for itself Rebuttable presumption of negligence: instrument causing injury was in defendants exclusive control and the accident was one which ordinarily does not occur in the absence of negligence

7 Documentation The most important piece of legal advice Document completely but judiciously Do not change, erase or alter a writing Adding to a writing is permissible – sign, date, state why you are adding to the document (ex. new information, research, addendum, etc.)

8 Contract law A promissory agreement between two or more persons that creates, modifies, or destroys a legal relation. An agreement consisting of a promise or mutual promises which the law will enforce or the performance of which the law in some way recognizes as a duty.

9 Contract basics Oral or written Express or implied UCC – commerce, goods Statute of frauds

10 Contract statute of frauds No action shall be maintained on certain classes of contracts or engagements unless there shall be a note or memorandum thereof in writing signed by the party to be charged or his authorized agent. Personal services, sale of land, etc.

11 Contract requirements Four corners of the document Offer Acceptance (mirror image) Consideration Parties with at least limited capacity (duress, fraud, free will, mental capacity) Mutuality of terms

12 Its as simple as AAct BBreach CConsequences DDamages

13 Damages Actual Compensatory – Unforeseeable: future earnings – Foreseeable: actual expenses, retraining, lost wages, counseling Nominal Punitive

14 Contracts youll encounter Real estate - office Purchase rental Lease Rent Construction Practice Purchase Partnership Merger Shared overhead Employment Independent contractor Employee Equipment Purchase Lease Third party provider Panel member Employee health care

15 Always read the fine print!

16 Pre-nup Pre-nuptial agreement Pros and cons Spousal involvement in business Purchase/sale of office and assets Protection from liability Tax filing – married, filing separately Keeping it separate vs. co-mingling

17 Legal entities Solo its just you, all the way Partnership joint owners (equal?) Group 3 or more Affiliation share overhead; separate (but equal?) Merger 2 or more practices join Franchise purchase the right to be part of a larger organization in return for specific privileges, expense sharing, etc

18 Hiring: Your responsibilities Human resources Educate Inform Follow-up Oversee Evaluate and re-evaluate

19 Stop litigation before it starts Review your policies Keep up on the law Post required notices Accept no nonsense Set an example Treat everyone equally and fairly Watch your opinions

20 New hires Contract Office policy manual Verify education, experience, references Background check, criminal or court records Complete all hiring forms; copy of right to work verification; federal forms Introduce to office, duties Continued employment predicated on successful completion of physical and drug test, if applicable Provide training Safety training; passwords, keys, etc. Employee has opportunity to explain or refute information Learning, not probationary period

21 Independent contractor or associate

22 Independent contractor New practice owners often are also independent contractors (or employees) in other settings to supplement their income Clearly defined by the IRS Not an employee Responsible for all taxes and contributions Look to the relationship between the parties

23 Employee contracts Policy vs. contract What should I include What should I exclude How comprehensive should it be Court interpretation Burden of proof

24 Employment at will Disclaimer Termination at any time With or without cause

25 Protect interests by Confidentiality agreements Covenant not to solicit patients Covenant not to solicit employees Covenant not to compete during employment Return of property upon leaving the practice Beware of out-of-state corporations

26 Confidentiality agreement Non-disclosure agreements Designed to protect the employer, seller or partner from disclosure of trade secrets – i.e. May contain trade secret protections Separate from non-competition clause May be severable from a non-compete agreement so not to violate right to work

27 Confidentiality agreement Non-disclosure agreements cont. Covenant not to compete arising from sale of business or partnership dissolution may be valid Employers may not force an employee to sign a covenant not to compete or a condition of employment – unfair competition Look to geographic area, time, activity, publics right to receive care State court may differ from federal court

28 Covenants Covenant not to compete Competition agreement Purpose: To protect practice value and goodwill

29 Covenant not to compete Restrictive or a restraint of trade – Is it reasonable, consistent with public welfare and bargained for pursuant to lawful contact? Goal is to prevent patient or record stealing or punish someone who does Enforceable if reasonable in light of the facts and circumstances

30 Covenant not to compete cont. Cannot restrain trade – cannot be too restrictive and unfair to the parties involved or public welfare Generally not honored in CA – check state law – Reasonable time limit only long enough to enable former employer or buyer to protect the practice Part of an employment contract, purchase agreement, partnership or pre-existing relationship

31 Compete clause (Employees, partners, mergers, associates) Shows greater durability and enforceability Doctor #2 can leave doctor #1, BUT to practice in the same town, he or she must pay X to #1 Holds up in court Must have consideration Must be reasonable and specific Designed to mitigate damages – liquidated damages

32 Boilerplate language Confidentiality Employment at will Privacy Electronic media Harassment Discrimination Zero tolerance

33 Employer

34 Taxes – 2008 Paid by EmployerEmployee FICA – social security6.20%6.20% Medicare1.45%1.45% SDI (CA)0.08% Federalschedule Stateschedule SUI3.4% ETT 0.10% on 1 st $7000 (employer training tax) Workers compschedule

35 Hire to fire documentation Handbooks – policy manual Handbooks vs. Application Be understanding of personal problems Supervisor Training Evaluations – written warnings; document Communicate, communicate, communicate Dont stress out Consistency – praise & suggestions for improvement Resignation Post-Termination No surprises No discussion once termination is necessary – end of day, end of pay; stand and escort to door Return keys, change codes

36 Hire defensively Be specific about rules Be vague about rights – Progressive discipline policies Oral warnings Written warnings Suspensions Terminations

37 Employment application Authorizations – Background check – Reference check – Drug & alcohol testing – Certification that all info provided by applicant is true

38 Successfully enforce policies – Dont ignore a situation or conflict – Take action to achieve resolution – Document your actions – Employee should sign all performance reviews & keep a copy – Pyramid any disciplinary measures if possible

39 Develop a game plan Address a complaint or issue immediately Employee rights Following through - consistency Posting Right of Privacy Annual review - Do not puff Review/update office policy manual periodically

40 Boilerplate language Employment at will Employees are forbidden from disclosing, taking, or copying confidential information Zero tolerance Right of privacy ADA - reasonable accommodation

41 What is sexual harassment or discrimination? Unwanted and offensive touching Objectionable behavior Unwelcome sexual advances Requests for sexual favors Boss has no special right Hostile environment

42 Protect yourself Prompt and effective action to end alleged harassment after complaint Employee must make a complaint If no action is taken to resolve the complaint, the employee may sue and receive actual damages, court costs, attorneys fees, and even punitive damages for willful violation

43 RED YELLOW GREEN RED: Not allowed - always unacceptable YELLOW: Questionable - Usually unacceptable or inappropriate GREEN: Allowed - acceptable

44 The golden rule All employees must be treated with dignity and mutual respect By everyone, at all times You set the example and are responsible for the whole office

45 Office illness and injury prevention manual

46 Leases & purchase agreements Equipment Real property Practice

47 Equipment lease Lease purchase – annual tax paid – $1 buy out or fair market value buy out – May be higher cost; shown as expense – Doesnt show as an asset or liability Outright purchase vs. finance Write-off value: depreciation per year Lease without option of purchase

48 Office lease considerations Mistake to pay operating expenses based on leased space rather than on leasable space Lease rate: rent + operating expenses and how calculated; increases Maintenance and upkeep; remodeling Amount of free rent Length of time space has been available; % occupancy; length of current tenants leases, lease incentives to current residents Any exclusionary businesses (i.e. other optical)

49 Office lease considerations cont. In event of fire, loss of use, loss of space/contents; remodeling, improvements, change of entrances, relocation; hours of business; square footage, parking Termination clause – right to sublet Tax indemnification clause Ownership change; buy-out clauses and down payments Insurance specifications Warranties on premises, equipment, etc. Included services, signage, hours of operation

50 Is it better to purchase or own? Real property – Purchase outright – Finance – Lease to own Equipment – Purchase outright – Finance – Lease to own Employees

51 Practice purchase or sale Lump sum is not the best option Serial sale: interest on sale is paid monthly (with principal). Tax may be computed on this interest – as a gift tax against the selling doctor unless the interest is already worked into the price Structured sale (best option): buyer has option to speed up payments Check with your accountant and tax attorney

52 Own your own Advantages – Cash accounting system – Liability mitigation: notice not required – Control Disadvantages – Repair and upkeep – Annual price hikes or upon lease renewal – Liability

53 Partnerships

54 Protect your partnership Choose wisely, carefully, consider a trial run Balance the work load; establish your roles Compromise Have a contingency plan Consult an attorney and put it in writing Communication is important to avoid a divorce Keep your spouse out of the business

55 Considerations Events causing termination of a relationship Retirement Voluntary termination to leave To start a competitive practice Involuntary termination –principals disagree Death Disability Felony conviction – loss of license

56 Partnership contracts Name, time commitment; prohibited acts, duration Contributions, allocations & cash flow Loans & leases; partnership sale or adding new partner Income, expenses, capital expenditures & withdrawals Books & records Competition agreements Partner relations – death, disability, buy out, resignation Insurance: how to be paid?

57 Read carefully Document everything Never argue; never yell Never get angry Do your research Dont be greedy Remember, act in haste, repent in leisure Plan and prepare for the worst

58 Going for help State chamber of commerce Professional associations Buying groups State/federal employment agencies

59 To do list Take a basic tax preparation class Select a CPA for small businesses Review contracts and categorize by topic Create a profit-and-loss statement Set 5- & 10-year financial & practice goals Write or re-evaluate office policy document Establish emergency protocols Develop a mentor relationship

60 References Classe, John, O.D., J.D. - Legal Aspects of Optometry Dufour, James T. - Optometric Office Injury& Illness Prevention Guide Miller, Pamela J. O.D., J.D. - A Handbook for the Ophthalmic Practice Documentation and Record Keeping Made Easy AOA

61 References cont. Primary Eyecare Network - Personnel File Desk Reference Set Steinberg, Craig S. O.D., J.D. - Employers Guide for Optometrists The Optometric Office and Illness Prevention Guide - Vision West California Compliance Catalog–

62 Thank you Pamela J. Miller, O.D., F.A.A.O., J.D

Download ppt "Welcome. Legal Aspects Of Optometric Practice Pamela J. Miller, O.D., F.A.A.O., J.D. Highland, California."

Similar presentations

Ads by Google