Under the first type, the employer has to provide reasons for which it can terminate a physician. These reasons usually include loss of hospital or prescribing privileges, or inappropriate conduct. It is important that these be specific. "Inability to meet patient needs," for example, is a subjective consideration that can be open to wide interpretation.

A "without cause" provision allows the employer to terminate a physician for no stated reason. However, notice must be given in writing in advance—usually from 30 to 180 days. A longer period is preferable from the employed physician's point of view, so that he or she will have time to find another practice. A "without cause" provision should allow the employed physician the option to terminate the contract with no stated reason as long as written notice is given.