Clinical performance is fine. Charts close on time, the coding is clean, the outcomes are unremarkable in the way good outcomes are unremarkable. And the practice cannot keep a medical assistant in that partner’s pod, the front desk has learned to route certain families around his schedule, and the last two staff members who resigned both said a version of the same thing in their exit conversations. No rule has been broken. Nothing has been documented. And the other partners have begun to realize that the agreement they signed gives them no path at all—that they are, as a matter of contract, stuck with this for as long as it lasts.
Values misalignment is the newest provision in partnership agreements and the hardest to draft with the candor it requires. It is the removal mechanism for the partner who breaks no rule but breaks the culture: the chronic corner-cutter, the colleague whose conduct staff resign over, the physician whose behavior is corrosive without ever being disqualifying. Drafted well, it is used almost never, and that is the point—the documented process converts most of these situations into repaired behavior long before anyone counts votes.
Begin by distinguishing it from for-cause removal, because conflating the two ruins both. For-cause triggers attach to objective catastrophes and to material breach: license revocation, exclusion from federal healthcare programs, loss of Drug Enforcement Administration registration, felony conviction. Several of those fire automatically, without a vote, precisely so that no colleague has to cast one. Values misalignment operates at a lower threshold, on conduct rather than on legal status, and it therefore requires more process, not less. A provision that offers a lower standard of proof and a harsher financial outcome than for-cause termination is the design most likely to be challenged, and the one least likely to survive the challenge.
Enforceability lives in the objective criteria built into an admittedly subjective provision. Three drafting moves do most of that work. State the practice’s values in the agreement itself or in a policy the agreement incorporates by reference, so the standard exists before the conduct does. Define the indicators that can support a finding—sustained and documented staff complaints, a pattern in patient grievances, repeated violations of stated conduct standards, refusal to meet governance obligations the agreement already imposes—so that the question a decision-maker faces is evidentiary rather than aesthetic. And require the conduct to be persistent and documented over a stated period, because a values clause that can be triggered by a bad quarter is a weapon rather than a standard.
Peer review comes before any vote, always. Build the framework and name it in the agreement: who receives a concern, how it is documented, how and when it is delivered to the partner, what a remediation plan must contain, how long the cure period runs, and how the outcome is recorded. Most difficult partners have never been told plainly, on the record, by someone with standing to say it, that a specific behavior is jeopardizing their partnership. A surprising number correct course when they are. The ones who do not have generated, through the process itself, exactly the record the practice will need. Note that many states protect peer review records from discovery under specified conditions, and that the protection depends on how the review is constituted and conducted—whether a particular partnership’s internal process qualifies is a question for counsel, worth asking while the framework is being written rather than after it has been used.
Then the vote, and the due process around it. Removal on values grounds should require a supermajority above the ordinary fundamental threshold—75 percent of the other partners is a workable setting—after the peer review process has run to completion. The partner facing removal receives written notice of the grounds, a stated period to respond, a meeting at which to be heard, and the right to have that response recorded. She does not vote and does not count toward the threshold. None of this is ceremony. It is the difference between a decision a court will read as the enforcement of an agreed governance process and one it will read as a majority deciding it had tired of somebody.
Price the exit as a no-fault forced buyout, not as a punishment: formula value plus the same stated premium that any involuntary removal carries, commonly 10 to 25 percent, with the bad-leaver discount expressly kept out of it. Payout terms should be no worse than a voluntary exit’s, and the restrictive covenants should apply at the gentler tier, because the departure was the practice’s decision rather than the partner’s. The premium does double duty. It protects the minority partner by making eviction expensive, and it gives the majority a lawful exit from an unworkable partnership. A provision that pays a removed partner less than a resigning one has told every partner in the room what the clause is really for.
Courts asked to review a partner’s expulsion generally look at whether the agreement authorized the removal, whether the stated procedure was actually followed, and whether the partners acted in good faith consistent with the fiduciary duties they owe one another—and the outcome turns on state law and on the record the practice built while the process ran. Which is another way of saying the provision is won or lost in the file rather than in the meeting.
One guardrail is not optional. Write an explicit carve-out barring the use of the values provision against a partner who has raised a compliance, billing, patient safety, or governance concern in good faith. Federal and state law protect certain reports from retaliation, and counsel confirms the scope for the practice’s own situation—but the drafting matters independently of the statute. A values clause that can be turned on the partner who asked an uncomfortable question at a partners’ meeting is not a culture provision. It is a silencing mechanism, and every partner will read it as one.
Red flags. No values provision at all, leaving a partnership legally bound to a disruptive colleague for years while the staff who can leave, do. A provision drafted so subjectively that it names no criteria and could not be applied consistently to two different partners. No peer review or remediation required before a removal vote. A removal standard lower than for-cause paired with buyout terms harsher than for-cause. A supermajority set at a threshold the majority already controls. And a provision used, or credibly said to have been used, against a partner raising a legitimate concern.
Culture is a governance question. A practice that cannot protect it will lose it—first the staff, then the schedule, then the partners who had other options all along.
A values misalignment provision allows it, operating at a lower threshold than for-cause removal and therefore requiring more process, not less. It reaches the chronic corner-cutter and the colleague whose conduct staff resign over. Enforceability lives in objective criteria: values stated in the agreement or a policy it incorporates, defined indicators that can support a finding, and conduct that is persistent and documented over a stated period.
A supermajority above the ordinary fundamental threshold, with 75 percent of the other partners a workable setting, taken after the peer review process has run to completion. The partner facing removal receives written notice of the grounds, a stated period to respond, a meeting at which to be heard, and the right to have that response recorded, and does not vote or count toward the threshold.
As a no-fault forced buyout rather than a punishment: formula value plus the same stated premium any involuntary removal carries, commonly 10 to 25 percent, with the bad-leaver discount expressly kept out of it. Payout terms are no worse than a voluntary exit’s and the restrictive covenants apply at the gentler tier, because the departure was the practice’s decision rather than the partner’s.
The Partnership Agreement Analyzer scores an existing agreement against the framework this series is built on — or schedule a discovery call to work through it with PMI. The full framework, with the arithmetic, lives in the textbook Pediatric Practice Management: The Fundamentals.