Contract Disputes Articles | Fremont, Hayward, San Leandro, Milpitas

Why Equal Ownership Creates a Unique Kind of Risk

Two owners who split a company evenly often start out aligned on nearly everything. Over time, though, priorities can diverge, and a business that once ran smoothly with two equal decision-makers can grind to a halt when neither owner is willing to defer to the other. This is one of the most common, and most damaging, problems facing California business owners in a 50/50 arrangement. Employers who understand how the law treats deadlock, and who put mechanisms in place before a disagreement becomes permanent, are far better positioned to keep the business running.

Resolving a 50/50 Business Ownership Deadlock in California

A 50/50 split can work well when both owners agree on the company’s direction, but it leaves no built-in tiebreaker when they don’t. Unlike a company with a majority owner, or a board with an odd number of directors, a 50/50 structure has no default mechanism for breaking a tie on a contested vote. This becomes especially damaging when the disagreement touches something the business genuinely needs to resolve, such as whether to take on debt, terminate a key employee, enter a new contract, or bring in an outside investor. When neither owner can get the votes needed to act, and neither is willing to sell out or step back, the company can drift into paralysis while bills still come due and decisions still need to be made.

What California Law Provides When Owners Cannot Agree

California law recognizes deadlock as a serious enough problem that it provides a specific remedy for corporations. Under the California Corporations Code, a shareholder, or one-half or more of a corporation’s directors, may file a verified complaint seeking involuntary dissolution of the corporation on several grounds, including that the owners are so divided that they cannot manage the company’s affairs. Dissolution, though, is a drastic and often undesirable outcome for a business that otherwise has value as a going concern. California law addresses this by giving the corporation, or shareholders holding at least fifty percent of the voting power, the option to avoid dissolution entirely by instead purchasing the shares of the shareholder seeking to dissolve the company at a court-determined fair value. This buyout mechanism generally functions as an alternative to court-ordered dissolution, giving one side a path to keep the business intact rather than winding it down. Limited liability companies face similar dissolution and buyout issues under California’s LLC statutes, and the specific outcome can depend heavily on how the operating agreement is written.

Practical Ways to Break a Deadlock Before It Reaches Court

Litigation over deadlock is expensive, slow, and can damage a business’s relationships with clients, lenders, and employees long before a judge ever rules. Business owners in a 50/50 structure can generally avoid or resolve deadlock more efficiently by considering:

A written shareholder, partnership, or operating agreement that designates a tiebreaking mechanism, such as a neutral third director, an outside advisor, or a rotating decision-making authority for specific categories of decisions
A shotgun or “buy-sell” clause that allows one owner to offer to buy out the other at a stated price, with the other owner having the option to instead buy at that same price
A mandatory mediation or arbitration clause requiring the owners to attempt a structured, confidential resolution process before either can pursue litigation
Pre-agreed valuation methods so that, if a buyout does become necessary, the owners are not negotiating the company’s value for the first time in the middle of a dispute
Clear escalation procedures identifying which decisions require unanimous consent, which can be made by either owner alone, and how a disputed decision gets resolved in the interim

Putting these provisions in place while the ownership relationship is still functioning well is almost always more effective, and far less costly, than trying to negotiate a resolution once a dispute has already taken hold.

Contact Our Fremont Business Lawyer for Ownership Disputes

Business deadlock rarely resolves itself, and the longer it continues, the more damage it tends to cause. Lynnette Ariathurai is a California business attorney with extensive experience helping business owners prevent and resolve ownership disputes, including 50/50 deadlock situations. Our business owners’ dispute resolution attorney can help you evaluate your options, whether that means drafting stronger governance provisions now or working through an active disagreement with your co-owner. Please do not hesitate to contact us today for a confidential consultation.

business legal advice, partnership legal advice

A Business Partner is Walking Away? How to Protect Your Business

At some point, many California business owners face the same question: what happens when a partner decides to walk away? Whether the departure is amicable or contentious, the remaining owners are the ones left to keep the company running, and the way that exit is handled can determine whether the business survives it intact. Partnerships who understand California’s default rules, and who put a written agreement in place before a partner ever announces plans to leave, are in a far stronger position to protect the company.

What Happens When a Business Partner Wants to Leave a California Company?

The first place to look when a partner wants out is the partnership , operating , or shareholder agreement that governs the business. A well-drafted agreement typically spells out how an exit is triggered, how the departing owner’s interest is valued, how that owner is paid out, and what happens to any debts or obligations that owner personally guaranteed. If your company has this kind of agreement in place, the process of the departure, while still often stressful, at least has a roadmap. The bigger challenges tend to arise when the agreement is silent, outdated, or was never put in writing in the first place, which is more common than many business owners expect, especially among partnerships formed informally between friends or family members.

California Law Fills the Gap When the Agreement Doesn’t Address an Exit

For general partnerships, California’s Uniform Partnership Act supplies default rules that apply automatically when a partnership agreement does not address a partner’s departure. Under these rules, once a partner is dissociated from the partnership, the business generally must purchase that partner’s interest for a buyout price based on the greater of the partnership’s liquidation value or its value as an ongoing business, calculated as of the date of dissociation. If the partnership and the departing partner cannot agree on a price within 120 days of a written demand, the partnership must pay the estimated buyout price in cash, subject to certain offsets for damages or amounts the departing partner owes the business. These statutory rules were not designed with any particular business in mind, and they can produce a valuation or payment timeline that does not match how your company actually operates or the cash it has on hand.

Practical Issues Employers Should Address When a Partner Exits

Beyond the legal valuation formula, a partner’s departure raises several operational issues that a business owner needs to manage carefully, including:

Determining how the business will fund the buyout without disrupting payroll, vendor payments, or day-to-day operations
Identifying which debts, leases, and personal guarantees the departing partner is tied to, and how those obligations will be handled going forward
Deciding how the client and vendor relationships that the departing partner managed will be transitioned
Reviewing whether the departing partner had access to trade secrets, client lists, or confidential business information that now needs additional protection
Updating banking authorizations, business licenses, and any state filings that list the departing partner as an owner or authorized signer
Considering whether a non-solicitation provision, to the extent enforceable under California law, should apply to
the departing partner’s future dealings with the company’s clients or employees

A partner’s exit that is not handled carefully can leave the remaining owners exposed to disputes over valuation, unpaid obligations, or confusion among clients and staff about who is actually running the company.

We Can Help You Navigate a Partner’s Departure

Lynnette Ariathurai is a California business attorney who has spent decades helping business owners handle ownership changes, including a partner’s exit, buyout, or removal. If your company is facing this situation, or if you want to put a stronger agreement in place before it becomes an issue, our business contracts attorney can help. We work with business owners throughout Fremont, Hayward, and the greater Bay Area, and we would welcome the opportunity to talk through your company’s specific situation. Please contact us today to schedule a confidential consultation.

business partner disputes, business partner walks away, governing agreements

Business legal services in Silicon Valley

Selling Your Practice to a Private Equity-Backed Group?

Private equity-backed groups have become active buyers of medical practices throughout California. These deals can offer real advantages, including liquidity, administrative support, and a path to retirement. They also come with unique structural and regulatory issues that a traditional practice sale to another physician does not raise. Here, our California business lawyer for buying and selling a business outlines what physicians should know before signing on with a private equity-backed buyer.

Selling a Medical Practice to a Private Equity-Backed Group: What to Know

Understand the Deal Structure Before You Negotiate Price

California’s corporate practice of medicine doctrine generally prohibits a non-physician entity from owning a medical practice outright. Private equity-backed buyers typically work around this through a management services organization, or MSO, model. The MSO purchases the practice’s non-clinical assets and provides administrative, billing, and management services under a long-term agreement, while a professional medical corporation owned by a licensed physician continues to hold the clinical practice. The management fee, contract length, termination rights, and control retained by the MSO over staffing and operations all affect the real value and risk of the deal, often more than the headline purchase price.

California Now Requires Advance Notice of Many Health Care Transactions

California’s Office of Health Care Affordability now requires many health care entities to file a notice at least 90 days before closing certain transactions that involve a material change in ownership, control, or governance. OHCA reviews the notice and decides whether to conduct a cost and market impact review before the deal can close. Depending on the size of the practice and the buyer, this notice requirement may apply to a sale involving a private equity-backed group, and missing the filing deadline can delay or jeopardize closing. It is important to determine early in negotiations whether this requirement applies to your transaction.

Protect Your Interests Before You Sign

A private equity buyer’s paperwork is drafted to protect the buyer. Before signing a letter of intent, physicians should review the deal with an eye toward:

How the purchase price is structured, including any portion tied to future performance, earnouts, or continued employment
The length and terms of the physician employment or professional services agreement that follows the sale
Whether restrictive covenants, forfeiture provisions, or non-solicitation clauses are enforceable under California law
Representations, warranties, and indemnification obligations tied to prior billing, coding, and compliance practices
Whether any required regulatory notices or filings, including an OHCA notice, apply to the transaction

Physicians who negotiate these terms early, rather than after a letter of intent is signed, generally retain far more leverage over price and post-closing control.

Contact Our Business Lawyer for Medical Practices Today

Lynnette Ariathurai is a California business attorney who advises medical practices on sales, mergers, and acquisitions throughout the Bay Area. If you are considering selling your medical practice to a private equity-backed group, our business attorney can help you evaluate the deal. Please do not hesitate to contact us today for a confidential consultation.

California medical practice law, medical practice legal advice, selling medical practice, selling to private equity-backed group

If the Physician at a Solo Medical Practice Becomes Disabled or Dies Unexpectedly, What’s Next?

Running a solo medical practice in California means the entire business often depends on one licensed professional. When that physician becomes suddenly disabled or passes away, the practice does not stop being subject to state law. Family members, staff, and patients can be left scrambling if there is no plan in place. Here, our California business lawyer for medical practices explains what typically happens to a solo practice after an unexpected disability or death, and why advance planning matters so much.

What Happens to a Solo Medical Practice When the Physician Becomes Disabled or Dies Unexpectedly?

The Professional Corporation Rules Do Not Pause for a Crisis

Most solo physicians in California operate through a professional medical corporation. State law places strict limits on who may hold shares in that corporation. If the sole shareholder becomes disqualified from practicing medicine due to disability, or dies, the shares generally must be transferred to a licensed physician within a fixed window under California law. If that transfer does not happen in time, the corporation’s certificate of registration can be suspended or revoked. That is a serious problem for a business that may still have staff, leases, and active patients depending on it.

Patients, Records, and Operations Do Not Manage Themselves

A solo practice does not have a co-owner to step in and keep the lights on. Someone needs authority to access bank accounts, pay staff, maintain the office lease, and most importantly arrange continuity of care for patients. Medical records must be protected and made available to patients and any new treating physician. Billing, payer credentialing, and malpractice coverage also need attention almost immediately, since gaps in any of these areas can create liability that outlives the physician’s ability to practice.

Why a Succession Plan Should Be in Place Before a Crisis Hits

A written plan drafted while the physician is healthy and available is far more effective than improvising during a medical emergency. A solid plan for a solo practice generally addresses:

A durable power of attorney authorizing a trusted person to manage business and financial matters if the physician becomes incapacitated
A designated licensed physician, locum tenens arrangement, or covering practice that can step in to treat patients on short notice
Clear instructions for who has access to accounts, payroll systems, and the electronic health record
A buy-sell or asset purchase arrangement identifying who may acquire the practice, and on what terms, if the physician cannot return
Updated estate planning documents that address the professional corporation shares specifically, not just personal assets

Building this plan often requires coordinating an estate planning attorney, an accountant, and a business attorney familiar with medical practice structures, since the professional corporation rules add a layer that most standard estate plans do not address.

Contact Our Business Lawyer for Medical Practices Today

Lynnette Ariathurai is a California business attorney who works with solo and group medical practices throughout the Bay Area. If you have questions about protecting your practice against the unexpected, our business succession planning attorney can help you put a plan in place. We’ll answer the question: What Happens to a Solo Medical Practice When the Physician Becomes Disabled or Dies Unexpectedly? Please do not hesitate to contact us today for a confidential consultation.

California healthcare practice law, medical practice legal advice

How California Medical Practices can Protect Themselves Without a Non-Compete

Employee non-compete agreements are highly disfavored in California. Indeed, state law (California Business and Professions Code § 16600) holds that non-compete agreements are broadly void, invalid, and unenforceable. For the owners of group medical practices, it is generally impermissible to use a non-compete for a physician. However, there are some alternative options available. Here, our Fremont business contracts lawyer provides an overview of the key things to know about how to protect your practice when you cannot use a non-compete agreement for a physician in California.

Physician Non-Compete Alternatives: Protecting Your Practice When You Can’t Use a Non-Compete

A Deeper Overview of the Law: California Prohibition on Non-Compete Agreements

California takes one of the nation’s strictest approaches to employee non-compete agreements. Business and Professions Code § 16600 provides that, except for narrow statutory exceptions, “every contract” restraining a person from engaging in a lawful profession, trade, or business is void. For physician employment agreements, that rule is especially important. A medical group generally cannot prevent a departing physician from continuing to practice medicine, opening a competing office, joining another practice, or treating patients in the same geographic market.

Note: California’s 2024 amendments made the rule even stronger. Section 16600 now requires broad construction of the statute and specifically confirms that employment non-competes are void no matter how narrowly tailored unless a statutory exception applies.

Know the (Narrow) Exception to the Non-Compete Restriction

The main business-sale exception is found in Business and Professions Code § 16601. A physician-owner who sells goodwill, equity, or substantially all operating assets of a practice may agree to a geographically limited restraint connected to that sale. With that being said, the exception is narrow and should not be treated as a workaround for ordinary physician employment.

How to Protect Your Practice: Physician Non-Compete Alternatives in California

A medical practice still has legitimate ways to protect its business. The key is to protect specific business assets without restraining a physician’s lawful practice of medicine. Here are some of the alternatives to physician non-competes that can help to protect your medical practice in California:

Strong confidentiality/trade secret provisions: A practice can prohibit misuse of confidential business information. That may include payer contracts, fee schedules, referral-source strategy, internal compensation data, staffing information, marketing plans, vendor terms, credentialing files, and non-public operational data.
Comprehensive protection of patient records: A departing physician may have professional and ethical duties related to continuity of care, but patient charts, scheduling data, billing records, portal access, and practice management systems belong to the practice.
Very carefully drafted non-solicitation agreements: California courts are skeptical of employee and customer non-solicitation provisions when they operate like restraints on competition. However, certain non-solicitation clauses may be viable.
Reasonable repayment and training-cost provisions: A group medical practice may want to recover signing bonuses, relocation payments, advanced compensation, malpractice tail contributions, or training expenses if a physician leaves early. Beginning 1/1/2026, California has placed limitations on employers’ ability to recover such sums when an employee leaves. Therefore, these provisions should be reviewed by an attorney to ensure compliance. Also, these provisions should be reasonable, clearly documented, and structured as repayment of identifiable benefits rather than a penalty for competition.

Contact Our California Business Lawyer for Physician Practices Today

Lynnette Ariathurai is a California business attorney who works with group medical practices. If you have any questions about the alternatives to non-compete for physicians in California, please do not hesitate to contact us today for a confidential consultation. We provide business law services to medical practices throughout the Bay Area.

California non-compete law, medical practice legal advice, physician non-compete

What Medical Practices Should Know Before Terminating a Physician, Nurse, or Practice Manager in California

Employment law is complicated. Before a medical practice takes the big step of terminating a physician, nurse, practice manager, or other key player, it is important to have a proper plan in place. There are a wide range of legal, logistical, and business issues that need to be addressed. Here, our California business lawyer for employers highlights key considerations that medical practices should know before terminating a doctor, nurse, or practice manager.

Start With an Employment Contract (If there is One)

California is an at-will employment law state (CalChamber). The relationship between an employer and employee is fully voluntary and can be ended by either party at any time. That is unless there is an employment contract that holds otherwise. It is an important consideration for medical practices because many doctors and nurses work under a contract. If there is a contract, it needs to be carefully reviewed before a termination moves forward.

Evaluate the Potential Wrongful Termination Risk

Even in an at-will employment state, a termination decision must comply with California law. No employee can be removed for illegal reasons. In other words, a medical practice employer cannot terminate a physician, nurse, or practice manager for a reason that violates statutory protections or clearly established public policy. California courts recognize claims for wrongful termination when an employee is discharged for refusing to engage in unlawful conduct, reporting regulatory violations, or exercising protected legal rights. If you have any questions about a potential wrongful termination claim by an employee, a California employment lawyer for medical practices can help.

Continuity of Patient Care

The most important consideration of the medical practice is the continuity of care for the patients. A plan should be put in place for patients to ensure their continuity of medical care following the employee leaving the medical practice.

Follow Established Internal Procedures and Be Sure Everything is Properly Documented

Before terminating a key healthcare employee, a medical practice should ensure that it has followed consistent internal disciplinary procedures. Employers should review performance evaluations, written warnings, and any prior disciplinary measures. Proper documentation helps demonstrate that the termination decision is grounded in legitimate business reasons rather than discriminatory or retaliatory motives. Practices should also coordinate the termination process with human resources policies, compliance officers, and their outside legal counsel.

Ensure Full Compliance With Medical Staff and Licensing Rules in California

When terminating a physician, medical practices must also consider professional licensing and credentialing implications. Physicians often hold clinical privileges, contractual obligations, or professional relationships that extend beyond the employment agreement. A termination may sometimes lead to reporting obligations under certain circumstances. That is particularly true if the termination involves allegations of professional misconduct and/or quality-of-care issues. Medical practices should evaluate whether the situation requires reporting to the California Medical Board, hospital credentialing committees, or national practitioner reporting systems.

Contact Our Bay Area Employment Lawyer for Medical Practices Today

Lynnette Ariathurai is a California employment lawyer for employers. If you have any questions about terminating a physician, nurse, or practice manager, we can help. Contact us today for a fully confidential initial consultation. With an office in Fremont, we provide employment law representation to medical practices throughout the Bay Area.

terminating doctor, terminating nurse, Terminating physician, terminating practice manager

Defending Employers: What to Do Before Employee Files a Claim

Most employer liability problems start small. An employee complains and the employer either reacts too slowly or improperly. That can risk serious problems. As an employer, the best way to address a complaint from an employee is to act before there is a formal claim. A fair, unbiased and proactive approach is the best approach. Here, our California employment lawyer for preventing claims highlights the steps that you can take before a claim is filed.

Step 1: Treat Every Employee Complaint Seriously

Employee complaints can never be viewed as frivolous. Do not debate labels at the outset of the process. To comply with California law, all employee complaints should be treated seriously and investigated properly. A complaint about unfairness can become a retaliation claim if it relates to discrimination, wages, safety, leave, or other protected conduct. The right mindset can go a long way towards helping employers resolve these problems.

Step 2: Acknowledge Receipt of the Complaint in Writing

A fair, unbiased and responsive approach to an employee complaint is a must. Make sure to confirm, in writing, that you received the complaint. As part of that written confirmation, it is a best practice to provide an (approximate) timeline and overview of next steps.

Step 3: Get a Timely Statement from Relevant Parties

Ask the employee for a written statement or take a signed intake memo. Lock down dates, locations, witnesses, what was said, and what the employee wants as a remedy. Ask about documents, texts, or photos. Do not pressure the employee to “keep it informal.” That posture can backfire later.

Step 4: Preserve Evidence; a Key Step for Employers

Issue a narrow preservation notice. Suspend deletion for relevant custodians. Pull time records, schedules, productivity reports, Slack or Teams messages, and security footage before it cycles out. If wage and hour issues appear, audit timekeeping practices immediately. Fixing a process now can reduce ongoing exposure, and document the business reason for any change.

Step 5: Put Interim Guardrails in Place as Appropriate

The California Fair Employment and Housing Act (FEHA) strictly prohibits retaliation. As an employer in the Bay Area that is facing an employee complaint, you should avoid any appearance of retaliation. It is important to put interim guardrails in place as appropriate given the specific circumstances. An employee cannot lawfully be punished for raising a complaint, even if it turns out later to be unfounded.

Step 6: Run a Structured Investigation with a Defined Scope (a Lawyer can Help)

Employers should define the allegation, the policy at issue, and the time window. A comprehensive overview of the case can help to resolve the issue. Among other things, it is the best practice to build an interview list. The investigation must be fair and unbiased. Employers should generally start with the complainant, then witnesses, then the accused. A fair and unbiased interviewer should ask the same core questions in each interview. Take notes that capture facts. Who should conduct the investigation? That is often best left to the overview of a California employment lawyer.

Speak to Our California Employment Lawyer for Employers Today

Lynnette Ariathurai is a California employment attorney for employers who is committed to solutions-driven representation. If you have any questions about how to prevent employee claims, please do not hesitate to contact us for a completely confidential, no obligation case review. From our Fremont law office, we provide employment representation to employers throughout the Bay Area.

Employee claims, employee discrimination claims, employee harassment claims, employee retaliation claims

Defending Employers in Medical Practices: What to Do Before an Employee Claim is Filed

Owning and operating a medical practice is complicated. A wide range of issues can arise. Employee complaints have the potential to be amongst the most damaging to employers. A fair, unbiased and proactive approach is a must. Lynnette Ariathurai is a California business lawyer who helps medical practices protect their interests before claims are filed. Here, our California employment attorney for preventing claims provides a step by step guide to what medical practices can do before an employee claim is filed.

Step 1: Accept the Complaint, Evaluate it, and Ensure Patient Care Does Not Suffer

Medical practices should start by classifying the complaint. Does it allege harassment, discrimination, retaliation, wage and hour violations, leave, safety violations, or another type of issue? It is important to understand what is being alleged. Medical practices should flag anything that could involve protected activity, protected leave, or protected class status. They should also flag anything that could implicate patient records, EMR access, or patient communications. Patient care cannot be allowed to suffer while the complaint is being addressed.

Step 2: Make Sure that Sensitive Patient Information is Protected

The Health Insurance Portability and Accountability Act (HIPAA) strictly protects the confidentiality of patient medical information. If the employee complaint involves charts, messages, photos, recordings, or access logs, restrict access on a need-to-know basis. Medical practices should not circulate screenshots and they should not “share for context” in group chats. Instead, they should preserve audit trails for EMR access and messaging systems. If you use outside HR or counsel, plan how you will disclose records as appropriate.

Step 3: Consider a Litigation Hold Tailored to Medical Systems

Medical practices facing an employee complaint in California may want to send a written preservation notice. Among other things, it can include email, texts, scheduling platforms, EMR audit logs, call recordings, camera footage, and patient messaging tools. You should coordinate with your EHR vendor if the system overwrites logs on a short cycle.

Step 4: Implement Interim Measures as Appropriate Without Punishing the Employee

You can adjust schedules, supervision, or patient assignments to reduce conflict while you investigate. However, medical practices should strictly document the business reason for doing so. It is important to avoid any appearance of retaliation. Things like pay cuts, hour reductions, or punitive reassignments could be an independent violation of the law. In other words, retaliation could give an employee the ability to bring an additional claim.

Step 5: Choose an Investigator Who Understands Medical Operations

A fair, comprehensive, unbiased, proactive investigation of an employee complaint is required. Medical practices should pick someone who is fair and reasonable, and can interview clinicians and staff without getting pulled into clinical debates. If the complaint involves a physician owner, a lead MA, or a practice manager, it is strongly recommended to consider an outside investigator.

Step 6: Be Ready to Get Professional Legal Representation

Employee complaints are complicated. Knowing what to do before a complaint is formally filed can go a long way to protecting the best interests of the medical practices. An experienced California employment lawyer for employers can review your case, answer your questions, and help you develop a strategy to resolve the matter most effectively.

Contact Our California Employment Lawyer for Medical Practices Today

Lynnette Ariathurai is a California employment attorney who has the knowledge and experience that medical practices can rely on. We put employers first. If you have any questions about what to do before an employee claim is filed against your medical practice, please do not hesitate to contact us today. With an office in Fremont, we provide employment law services to medical practices throughout the Bay Area of California.

Employee claims, employee discrimination claim, employee harassment claim, employee retaliation claim

MSAs for Medical Practices in California: Uncover Hidden Costs and Minimize Risk

Do you own and/or operate a medical practice in California? If so, you may be considering entering into a medical services agreement (MSA). Broadly explained, these are contracts between a professional practice and a third party company that offers administrative/business services. An MSA can be a useful tool for a medical practice in California, but it needs to be properly structured. Here, our Fremont business lawyer for medical practices provides a guide to MSAs in California.

What is a Medical Services Agreement (MSA)?

An MSA is a contract between a licensed medical practice and a third party management and/or administrative services company. The agreement allows the non-medical entity to handle business functions such as billing, human resources, accounting, marketing, facilities management, and technology systems. At the same time, the professional medical corporation (PC) retains control over all clinical decisions.

In California, these arrangements must be carefully structured to comply with the state’s Corporate Practice of Medicine (CPOM) doctrine. The law prohibits non-physicians or unlicensed entities from owning, managing, or influencing medical decision-making. The Medical Board of California enforces strict boundaries to ensure that only physicians direct patient care.

Why Medical Practices in California Enter into MSA

Many professional medical practices in California enter into MSAs. At their best, these agreements can help to make business operations more efficient and reduce administrative burdens. Running a compliant and profitable practice in California requires substantial time and resources unrelated to patient care. A management company can provide economies of scale by handling functions such as insurance credentialing, revenue cycle management, and payroll. MSAs also allow smaller practices to access advanced systems (such as electronic health records (EHR) management) that they may not be able to reasonably afford independently.

Be Prepared: Know the Hidden Costs and Risks of MSAs

Despite their benefits, MSAs carry significant legal and financial risks. The most common problem arises when an agreement crosses the line into impermissible control over medical decision-making. If an MSO sets physician compensation, directs clinical staffing, or influences patient scheduling, regulators may find a CPOM violation. Here are key points to know:

Hidden financial risks: In many cases, MSAs can conceal substantial costs. Flat fees, revenue-sharing provisions, and performance bonuses tied to patient volume may violate federal and state anti-kickback or fee-splitting rules.
Data privacy and HIPAA liability: Because MSAs often manage patient billing and records, they may become business associates under HIPAA (45 C.F.R. §160.103). A proper business associate agreement (BAA) must accompany the MSA.
Unfavorable contract: Some MSAs include restrictive termination clauses or automatic renewal terms that leave the physician practice trapped in a long-term agreement. It is imperative that any MSA is drafted and/or reviewed by an attorney.

Speak to Our Fremont Employment Lawyer for Employers today

Lynnette Ariathurai is a California business attorney who has considerable experience representing medical practices. If you have any questions or concerns about MSAs, we can help. Contact us today for your completely confidential consultation. From our Fremont office, our team provides business law services to medical practices throughout the Bay Area.

business associate agreements, medical services agreements, MSA costs, MSA risk

Employer Guide – Protection and Guidelines

Employment law is complicated. California has among the most comprehensive, worker-friendly employment laws in the entire country. Employers must be in full compliance with the law. A proactive approach to labor and employment compliance can help businesses and organizations reduce their risk of liability. Lynnette Ariathurai is a solutions-focused California employment lawyer. If you have any questions about employment protections or employment guidelines, please do not hesitate to contact us for a fully private, no obligation consultation.

We Provide Legal Protection to Employers in California

Employer Representation

We are committed to representing employers in employment law matters. Our firm can help you develop workplace policies, employee handbooks, required training, and employment contracts to reduce your risk of legal/liability exposure. We also defend employers against federal and state claims, including discrimination, harassment, wage and hour disputes, and administrative complaints. Employers can rely on our proactive legal counsel.

Preventing Employee Claims

The best way to deal with employee claims is for the employer to prevent them from arising in the first place. A proactive approach can make the difference. We help employers in the Bay Area understand the ever-evolving state and federal requirements so that they remain fully compliant. Preventive support limits future lawsuits and preserves resources. If you have any questions about how to develop the right policy to prevent a claim from an employee, our attorney is here as a resource.

Defending Employee Claims

Even if your company does everything the right way, the employer could still face a claim from an employee. California employers face many types of employee allegations, from EEOC and Labor Commissioner complaints to attorney letters and lawsuits. We defend employers against federal and state claims, including discrimination, harassment, overtime, and leave disputes. Facing liability in an employment law claim has the potential to be very costly for an employer. If you have any questions about how an employer can deal with a claim from an employee, our California attorney is here to help.

Handling Discrimination Claims

California strictly enforces anti-discrimination laws. We help Bay Area employers with preventing, responding to, and resolving discrimination claims under federal and California law. Employers must understand Title VII and FEHA obligations to avoid protected-class discrimination legal exposure. Our California employment lawyer can review allegations, conduct impartial investigations, and advise employers on defense strategy.

Termination of Employees

Terminating an employee can be complicated. Even if it is “for cause.” California employers must follow strict rules when terminating employees. Our business law firm advises companies and organizations on lawful termination procedures that reduce risk under state and federal law. Guidance covers documentation, performance records, final pay requirements, wage statements, and timing obligations.

Contact Our Fremont Employment Lawyer Today

Lynnette Ariathurai is an experienced California employment lawyer. If you are an employer with questions about your rights or your options, we are here to help. Contact us today for a completely confidential, no obligation initial consultation. With an office in Fremont, we provide employment law representation throughout the region in California.

California employment law, employer liability, employer risk, employment law