Key Considerations for Associate Contracts: A Guide for New Dental Associates

Guest Contributor: Contributed by Dennis Thornton, Broker, CARR, Inc. 

Starting your career as a dentist is an exciting milestone, but before signing an associate contract, it’s crucial to understand what you’re agreeing to. Many new dental associates sign contracts without fully reviewing them. Perhaps this happens because they are intimidated by the process, or they don’t want to upset the practice owner by being too forward, or they don’t have an attorney, or they assume it’s all standard language. However, associate contracts contain key details that can significantly impact your career, and they certainly do not all include the same standard language.

In this blog, we highlight some of the most important clauses and considerations to watch for before signing on the dotted line.

Employee vs. Independent Contractor: Know Your Classification

One of the first issues in an associate contract is whether you are classified as an employee or an independent contractor. Many associates (and some practice owners) think that they can decide how they will be characterized. The truth is that the law decides how you are classified, you don’t really have a choice in the matter. One thing is for sure: for any given associate contract you cannot be both an independent contractor and an employee —you’re either one or the other.

Why does this matter?

Practice owners often prefer independent contractors because this arrangement can reduce their administrative burden—no payroll taxes, no benefits.

Some associates prefer independent contractor status for tax write-offs, but as we just mentioned, the law determines classification, not personal preference.

The key factor is control:

The easiest way to think about this from an associate’s standpoint is to determine the degree of control you have over your work.  Who is paying you, who is assigning you patients? Are you bringing your own supplies? Are you setting your own schedule? Most dental associates who come into a practice are not doing any of these things. The practice controls your schedule and is assigning you patients. The practice is billing on your behalf and giving you the supplies and staff needed to do your work. So, it’s very difficult to be characterized as an independent contractor as an associate.  If the practice controls your schedule, assigns patients, provides supplies, and bills on your behalf, you are most likely an employee.

Exceptions exist for certain specialists, such as oral surgeons who work at multiple locations on their own terms.  Location matters, too. Some states, like California, make it nearly impossible for dental associates to be classified as independent contractors.

Compensation: Understanding Net Collections 

Many dental associates, especially in general practice, are paid based on a percentage of net collections, rather than a set salary. The percentage varies based on location and experience, but new associates typically earn 30–32% of net collections.

What to Look for in Your Contract: 

Definition of Net Collections – Ensure it is clearly defined. This is not gross revenue; it accounts for insurance write-offs, redo’s, and possibly lab fees.

Right to Review Collection Reports – You should have access to reports that show how your pay is calculated.

Daily Minimum Pay – Since building a patient base can take time, be sure to negotiate a guaranteed daily minimum for the first 3–6 months.

Benefits & Expenses: Get It in Writing 

Practice owners might verbally promise benefits, but if it is not in the contract, it is not guaranteed. Common benefits include:

• License fees and board memberships
• Continuing education allowance (e.g. X dollars per year)
• Health insurance, vacation, and 401(k)

Additionally, if you are relocating, don’t be afraid to negotiate a sign-on or relocation bonus. If, for example, you finished school in Chicago, but you are moving to Florida to join a practice.  Practice owners may help absorb some of those relocation costs. Just be aware that these often come with a required work period—if you leave too soon, you may have to repay it.

Term & Termination: How You Can Leave 

At-Will vs. Contractual Term Limits

Most states are at-will employment states, meaning you or the practice can end the contract for any non-discriminatory reason at any time. However, most dental contracts modify this with a set term (1–2 years) and automatic renewals.

Termination Clauses: Protect Yourself 

 For-Cause Termination – The practice can fire you immediately for serious offenses (e.g., losing your license, embezzlement, harassment). Make sure the same protections apply to you—if the practice is not paying you or if you experience harassment, you should have the right to terminate immediately.

 Without-Cause Termination – Most contracts require 60–90 days’ notice to leave. Watch out for excessively long notice periods (e.g., 180 days), as this could interfere with your ability to buy or start your own practice. After all, many dentists graduate and want to work for a while before they buy a practice or start a practice. As an associate it is in your best interest to negotiate the least amount of notice possible in your contract so that you can leave when you want to.

 Penalties for Leaving Early – Some contracts include financial penalties for not giving proper notice. Be aware of these clauses.

Restrictive Covenants: Non-Compete & Non-Solicitation

Most contracts include restrictive covenants, which limit what you can do after leaving the practice. These typically include:

A Non-Compete prevents you from working within a certain radius (e.g., 5 miles) for a set period (e.g., 1–2 years).

Non-Solicitation prevents you from soliciting patients or staff after you leave.

Confidentiality clauses prohibit the sharing of patient lists, marketing strategies, and practice financials.

What’s Considered Reasonable?

In urban areas, a smaller radius (e.g., 3–5 miles or less) is reasonable because many practices are nearby.

In rural areas, a larger radius (e.g., 15–25 miles or more) may be enforceable because fewer practices exist.

Special Considerations for DSOs & Large Groups

If you are working for a DSO (Dental Support Organization) or multi-location practice, be careful with the non-compete radius. Some contracts restrict you from ALL locations the company owns, not just your specific office. This could severely limit your future job opportunities.

Are Non-Competes Still Enforceable? 

Despite rumors, non-competes have not been banned nationwide. The FTC issued a rule banning non-competes nationwide, but a federal court in Texas blocked enforcement of that ban in 2024. For now, assume non-competes are enforceable.

Get Your Contract Reviewed 

Many associates hesitate to have an attorney review their contract, fearing it will complicate negotiations. However, an attorney who works exclusively with dentists and physicians can protect your interests and bring significant experience to the table.

Before you sign your contract, make sure you:

• Understand your classification as an employee vs. independent contractor
• Clarify your compensation structure
• Ensure all benefits and expenses are in writing
• Review termination clauses and notice periods
• Negotiate reasonable non-compete and non-solicitation terms

Contracts are not just formalities; they set the foundation for your professional career. Take the time to review and negotiate to protect your future.

About Dennis Thornton

Dennis has more than 20 plus years of experience in the dental industry, providing him with great insight into the profession. As a sales professional for 35+ years, he brings a vast amount of organizational and relationship skills to the commercial real estate arena. Dennis holds a B.S. in Business Management from Bradley University in Peoria, IL. He enjoys the outdoors and spending time with his wife and two children.

About CARR, Inc.

CARR, Inc. is the nation’s leading provider of commercial real estate services for healthcare tenants and buyers. Every year, thousands of healthcare practices trust CARR to achieve the most favorable terms on their lease and purchase negotiations. CARR’s team of experts assist with start-ups, lease renewals, expansions, relocations, additional offices, purchases, and practice transitions. Healthcare practices choose CARR to save them a substantial amount of time and money; while ensuring their interests are always first.

About Treloar & Heisel
Treloar & Heisel, an EPIC Company, is a premier financial services provider to dental and medical professionals across the country. We assist thousands of clients from residency to practice and through retirement with a comprehensive suite of financial services, custom-tailored advice, and a strong national network focused on delivering the highest level of service. Visit us at www.treloaronline.com.

Insurance products offered through Treloar & Heisel, LLC.