Can this contract possibly be legal?

[paigeRN1962]

First a few background facts: I just finished my second week working in a private physician's office as a staff nurse. It is an office based surgery center and has recently added another RN and surgeon. I am still in orientation however no mention was made of signing a "contract" when the offer of employment was made. I took a significant pay-cut to take this position however the idea of no call, holidays or weekends was too good to turn down for this single mom.

After I came back from lunch today, a 12-page contract was sitting on my desk with a post-it note on it telling me to sign it. Here's where it gets interesting:

1. the contract had none of the blanks filled in (rate of pay, start date, etc)

2. the contract states there will be a 90-day probationary period, however I was told by the office manager when I accepted the job offer and rate of pay, that it would be only 60 days and then have a re-evaluation. She made it sound that my pay would be adjusted at the end of that time frame

3. the second page of the contract states that, "the employee is a valued and integral part of the employer and the loss of her services to the employer would cause sever(sic) hardship and economic loss to the employer.............employee agrees to permit employer to insure his/her life under policy of life insurance........name the EMPLOYER (!!!) as sole beneficiary.........submit to all necessary physical or examinations to effect such policies of insurance."

I am a nurse and as such, there is no loss of revenue to my employer in the event of my untimely death and no justification for him to insure my life and be the policy's sole beneficiary. He could simply place an ad in the classifieds and replace me with another nurse. Is it just me or is this bizarre? The other employees who signed this are in their 20's, uneducated and I have to wonder if they even read what they were signing. Who in their right mind would ask someone to sign a contract like this? Especially when all the blanks are not filled in by the employer? I understand signing "at-will employment agreements", "non-competition clauses", "confidentiality agreements" and the usual legalese..........but this other stuff doesn't seem legal and I have a feeling if I don't sign it, I will be terminated. I didn't think I could be made to take a health exam after I already accepted an offer of employment and started working.

Where would I find information regarding employment law for something like this? Wouldn't this also violate HIPAA? revealing my medical information would be a condition of continuing my employment due to this employer's demand to take out a life insurance plolicy on me and make himself the sole beneficiary?

[MedSurgeMess]

this sounds to freaky to be true...I'd start looking for another job immediately, regardless of work hours or call in

[Josh L.Ac.]

Wasn't there a CSI episode like that, with all of the employees signing a contract to make their employeer the beneficiary of their life insurance policies?

Doesn't seem like a positive.

You could always ask them why.

[mekrn]

That is soooo creepy!!! I have never heard of that. RUN.... and don't look back!

[Multicollinearity, BSN, RN]

I think there is a simple explanation for this. It is common practice for small businesses and practices to take out something called "key-person life insurance." (I was/am in insurance agent before becoming a student again). This is to help insulate the practice against the devastating financial consequences of an important partner's death. You can bet that 99% of all physican practices with more than one physician have this insurance. Think of a practice with 2-5 physicians or surgeons. They build a highly specialized and EXPENSIVE practice. One dies. It could cripple the practice without insurance.

I think this little office is using the same contract they got somewhere for physician partners and using it with all staff. Lazy? An oversight? I don't know. Perhaps they didn't want to pay their practice consultant or attorney for several different contract forms and they are using a global contract for all employees. I doubt it's nefarious.

You obviously do need clarification on the probationary period, review and salary, etc. I would NEVER sign a contract with blanks. But I think this is just a common employment contract which is usually used for practice partners.

Here's a link about key person insurance:

http://www.allbusiness.com/human-resources/benefits-insurance-key-person-life/1249-1.html

[IMustBeCrazy]

I think there is a simple explanation for this. It is common practice for small businesses and practices to take out something called "key-person life insurance." (I was/am in insurance agent before becoming a student again). This is to help insulate the practice against the devastating financial consequences of an important partner's death. You can bet that 99% of all physican practices with more than one physician have this insurance. Think of a practice with 2-5 physicians or surgeons. They build a highly specialized and EXPENSIVE practice. One dies. It could cripple the practice without insurance.

I think this little office is using the same contract they got somewhere for physician partners and using it with all staff. Lazy? An oversight? I don't know. Perhaps they didn't want to pay their practice consultant or attorney for several different contract forms and they are using a global contract for all employees. I doubt it's nefarious.

You obviously do need clarification on the probationary period, review and salary, etc. I would NEVER sign a contract with blanks. But I think this is just a common employment contract which is usually used for practice partners.

Here's a link about key person insurance:

http://www.allbusiness.com/human-resources/benefits-insurance-key-person-life/1249-1.html

:yeahthat:

I was thinking the same thing, they just pulled the wrong contract out of the drawer. I would approach it as such to the business/HR mgr.

[whiskeygirl, LPN]

I would NEVER sign a contract that had blanks not filled in. That would be a very bad idea. After you have signed it, they could write your hourly pay as minimum wage!

Seek clarification on the 60 vs. 90 day probation period.

I could see agreeing to the life insurance with caveat ONLY IF I was the partner or holding significant stock in the company.

Why not ask for a contract that is better written?

Are you in a right to work state? What could they do to you for refusing to sign the contract, let you go? They already hired you. It just sounds shady. I would be very leary!

Good luck

[gonzo1, ASN, RN]

If there is any way you can have a lawyer check this out I would. It would be worth the cost of an hour with a lawyer if you ask me. Checking with your new boss first to see if wrong contract was given would be safe to do, I would think.

[Elisheva]

NEVER sign anything with blanks.

If I liked the job, I'd take the contract straight to my lawyer and let him advise me. If your employer is worth his salt, he shouldn't mind that you want to have it looked at.

[paigeRN1962]

Thank you all for your feedback and suggestions. It appears that the doctor whom I work for cut and pasted this on his computer. I believe this is a contract he is trying to make as a "one size fits all" to cover any and all issues, potential or real, now and in the future, The state I work in is not a right to work state. I can be fired, as can anyone else, at any time for any reason or no reason at all. The employee handbook reiterates that at least 4 times. Even the receptionists signed the same 12 page contract that I did, as did anyone else that is an hourly employee.

I think what bothers me is that the business manager handed it to me blank, which makes me question some things about her. And that, as I said, I don't generate revenue for this doctor and as such, I feel like it is pure greed to expect me to let him insure my life for his benefit. And lastly, I feel that it is an invasion of my privacy to ask me to submit to a life insurance exam, to prove evidence of insurability. I have some health history that, when a previous employer became aware, discriminated against me and this affected my career, evaluations and privacy. These kind of things are very hard to prove but my last nurse manager gave me a 0.22 raise and the lowest and most negative yearly eval in the whole department of over 50 employees. I files an ethic complaint and my suspicions were confirmed.......I resigned 4 months later after being there 6 years and never having been evaluated negatively or had a complaint made by a physician in the whole time I worked there ......4 other employees came with me and we all started working at a new job (not the one I am at now). I guard my privacy and no one at this new job knows anything and I plan to keep it that way.

[shazbo]

i think i would cut and paste it back to him with the relevant blanks filled in and the life ins. stuff cut out. you have "saved him time".

[Altra, BSN, RN]

I think what bothers me is that the business manager handed it to me blank, which makes me question some things about her. And that, as I said, I don't generate revenue for this doctor and as such, I feel like it is pure greed to expect me to let him insure my life for his benefit. And lastly, I feel that it is an invasion of my privacy to ask me to submit to a life insurance exam, to prove evidence of insurability.

In a business as small as a single practitioner's office, everyone is a key employee. There is economic loss (in the productivity of other employees) in hiring & training any new employee. As other posters have pointed out, this is common in small businesses, and is totally separate from whatever benefits you may be receiving, including any other life insurance options you may be able to take advantage of for the benefit of yourself & your family.

However, the sloppy way this has been handled ... no mention of the contract prior to beginning the job, blanks on the contract, etc. is extremely concerning. Not necessarily because it indicates any nefarious intent but because it is extremely poor, half-a*sed business practice. Someone has taken enough time to think through putting together contracts for employees (reasonable) but forgotten about the diligence with which these aspects of hiring must be handled.

I would not sign anything with blanks, ever. You should have been told about the medical screening as part of the job offer (no physical exam or drug test prior to hiring?) If the medical screening for the life insurance policy bothers you enough to reconsider the job, that's a decision you'll have to make. It is certainly your right to do so.