Can I break my nursing contract? 5 Things to Know

Before terminating an employment agreement, it is crucial to take several significant factors into consideration. Learn these 5 important things before deciding...

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Can I break my nursing contract? 5 Things to Know

After graduation, Brittany was thrilled to be offered a job in ICU at the hospital of her choice. She knew she had to sign a contract promising to stay for two years, but she signed without reading and without hesitation.

Reading it wouldn't have made a difference; she wanted the job. People sign contracts all the time. She had just signed a contract with AT&T to bundle her internet and TV service and hadn't read that one, either. No one really reads contracts, right?

One year later, Brittany felt trapped in an unhealthy work environment and wanted out. She didn't know if she'd have to pay the money back or if she'd be making a big career mistake by leaving.

It can be difficult in many areas of the country to land a job, especially a residency position, without a contract. Employment contracts have become the industry standard when awarding residency positions.

Reasons for Contracts

It's estimated hospitals spend upwards of $40,000 to orient a newly graduated nurse. The hospital loses money if a new nurse leaves before they are fully productive.

Turnover affects not just the bottom line, it affects morale. Preceptors who pour themselves into training a new grad only to have them leave prematurely are less willing to invest themselves in the following new hire who may or may not stay.

Contracts were developed to address these problems.

NOTE: Employment contracts are not to be confused with sign-on bonuses. Sign-on bonuses are typically offered for experienced nurses in hard-to-fill positions. They are not paid in one lump sum but are paid in installments over time. 

What if you find yourself in the position of not wanting to complete a contract?

Here are five important things to know before deciding.

Enforceable

Contracts are indeed enforceable. They are legal, binding, and have been vetted by hospital attorneys. The penalty for breach of contract is typically a pro-rated sum of anywhere from $2,000 to 15,000 dollars and more.

What are the chances of having to pay back thousands of dollars? It's hard to say.

  • In the same hospital, one new grad may be pursued by collections while another one won't.  
  • Some hospitals officially state they will pursue payment but, in reality, do not have the will to sue nurses and quietly let it slide.
  • Some hospitals request the money owed but stop short of using a collection agency.
  • Some hospitals go so far as using a collection agency and pursuing to the full extent of the law.

While some consider contracts more of a deterrent and an honor system, others can and do pursue nurses.

Since you can't know whether or not the hospital will enforce the contract, assume it will. Even hospitals that haven't collected in the past can change their practice anytime.

Plan Your Move

Look at all your options. Many times contracts bind you to the hospital, not the unit. Transferring to another unit may resolve any work problems.

If you decide to quit, and once you are ready to give notice, tell your story. Managers and HR staff are people who understand life circumstances. 

A nurse who quits at three months because the job is more stressful than anticipated is a different narrative than a nurse with a small child whose military husband was reassigned across the country.

Depending on your circumstances, you may even be released from your contract.

If held to the contract, negotiate a repayment plan.

Have a Strategy for the Next Job

Once you know you are going to leave, control the timing. You want to minimize your employment gap. Make every effort to land a job before you give notice. Give two weeks' notice, but be prepared to be dismissed when you provide notice.

If you leave in less than a year, you are still considered a new grad, meaning you do not have the status and employability of an experienced nurse. You will have to explain your short tenure. 

If you are moving to another state, apply for licensure endorsement if needed. Submit job applications and start doing interviews. You can conduct Skype interviews and fly out on your days off for face-to-face interviews if they're required.

Note: If you get a job offer and accept, ask for relocation assistance. Some hospitals provide assistance only when asked. The worst that can happen is they say no.

Not a BON Issue

Some nurses worry that they will be reported to their state board of nursing (BON) or board of registered nurses (BRN) for breaking their employment contract. The BON/BRN has no jurisdiction over employee relations. 

You will not be reported to your state board of nursing for breaking your contract.

Not Eligible for Rehire

It's guaranteed that you'll be given a Not Eligible for Rehire status when you break a contract. If you work for a large organization, it could mean you will not be hired at any of their facilities.

So when presented with an employment contract, read the contract thoroughly. Before signing it, make sure you understand it well enough to explain it to someone else. It is OK to ask questions, such as "Is there a provision for having to move because of personal reasons?" Ask questions about the pro-rated payback until you understand it clearly. 

Most importantly, ask yourself if you can promise to stay for two years in good faith.

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Nurse Beth

About Nurse Beth, MSN

Career Columnist / Author

Hi! Nice to meet you! I especially love helping new nurses. I am currently a nurse writer with a background in Staff Development, Telemetry and ICU.

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Specializes in ICU.

It's important as a nurse in a new contract to understand the risks of breaking contracts. I agree with the above highlighted content in relation to this topic. At times due to family issues and obligations contracts have to be broken - but it's important for nurses to know the risk they are taking.

It's also important to not "burn bridges" with facilities. The healthcare systems are small and networking is important. To give advice: Do what is best for you but also try to maintain great connections in hospital ? 

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Specializes in Tele, ICU, Staff Development.
Nurse Alexa said:

It's important as a nurse in a new contract to understand the risks of breaking contracts. I agree with the above highlighted content in relation to this topic. At times due to family issues and obligations contracts have to be broken - but it's important for nurses to know the risk they are taking.

It's also important to not "burn bridges" with facilities. The healthcare systems are small and networking is important. To give advice: Do what is best for you but also try to maintain great connections in hospital ? 

You are so right about not burning bridges. The longer you're a nurse, the more you realize what a small world it is.

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Specializes in oncology.
Nurse Beth said:

It's estimated hospitals spend upwards of $40,000 to orient a newly graduated nurse

I may hear the wrath for my reply, but our local hospitals support adjunct faculty to supplement the needs of clinical.  The hospitals don't want the RN employees to provide clinical instruction, supervising skills (what was taught at the college)  and correlation to classroom and clinical. The hospitals want the new and seasoned employees to have their foci/support/care on the inpatients for a better patient experience. 

Adjuncts are not always the answer. They sometimes do not spend any time reviewing the DVD we provide on skills checkoffs. They contradict the instructions on the paperwork required. We have not rehired a couple but on the whole we find the "hospital-funded" adjuncts to be a good solution to an extensive orientation time. 

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Specializes in Tele, ICU, Staff Development.
AlexaLA said:

How has AB-2588 affected New Grad contracts in California? Have hospitals found loop holes or workarounds?

https://www.lcwlegal.com/news/ab-2588-requires-a-general-acute-care-hospital-employer-to-indemnify-both-employees-and-applicants-for-employment-providing-direct-patient-care-for-the-cost-of-any-employer-provided-or-employer-requ/

I always took AB-298 to mean employers that if, say, ACLS was required for the job, then the employer had to pay for it (as it should be!)

But that's an interesting point when it comes to requiring an employee to pay for breaking a contract. Maybe a lawyer could argue that one! 

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Specializes in Tele, ICU, Staff Development.
londonflo said:

I may hear the wrath for my reply, but our local hospitals support adjunct faculty to supplement the needs of clinical.  The hospitals don't want the RN employees to provide clinical instruction, supervising skills (what was taught at the college)  and correlation to classroom and clinical. The hospitals want the new and seasoned employees to have their foci/support/care on the inpatients for a better patient experience. 

Adjuncts are not always the answer. They sometimes do not spend any time reviewing the DVD we provide on skills checkoffs. They contradict the instructions on the paperwork required. We have not rehired a couple but on the whole we find the "hospital-funded" adjuncts to be a good solution to an extensive orientation time. 

I'm not sure I follow, @londflo Do you mean that new grads are oriented for 3 months by adjunct faculty, not preceptors?

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Specializes in oncology.
Nurse Beth said:

I'm not sure I follow, @londflo Do you mean that new grads are oriented for 3 months by adjunct faculty, not preceptors?

No, the hospital provides adjunct faculty for the needs of the ADN program at the sponsoring hospital, 10 students each day/evening  . There is of course the new RN orientation after graduation that was independent of this with no obligation by the faculty or student. . But the hospital provides faculty support/clinical supervision (without other college responsibilities for students during their 2 years of education for 2 clinical days..) In addition to my other assignments of clinical at another hospital, I was course Chair. I met with these faculty, provided paperwork requirements, skills instruction requirements and course requirements.  Students would have rotations at the supporting hospital and also have College funded faculty at other rotations/institutions. There is no obligation for the student to "sign on" at the sponsoring hospital. 

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Specializes in CVICU.

I can relate to being a new grad nurse, hired into ICU. I was experiencing incivility early into my training and didn't know how to communicate it to my Nurse Manager. Once I did, there was no "closed loop communication." I left after two years.

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