Top 5 Collateral Consequences of License Discipline

Most licensees when facing license discipline are concerned about the direct and immediate consequences. In particular, when a physician faces an accusation by the Medical Board of California, their primary concern is their continued ability to practice. And that is completely reasonable and understandable.

However, the lure of certainty in the continued ability to practice can often lead the licensee to immediately agree to anything less than revocation – even where discipline is not warranted or the restrictions on the license (by way of a restricted license or probation) are heavy-handed. That is why we always recommend consulting with an attorney and even having an attorney present before ever conducting such a negotiation over license discipline. But beyond the actual license discipline, there are also collateral consequences that the licensee does not properly weigh or even consider. These are the ramifications of the discipline that can end up even being a bigger burden to the licensee than the discipline being imposed.

Below are our top 5 collateral consequences of license discipline. Some license-types have even more extensive lists; for example, we have a top 20 list for license discipline by the Medical Board of California. However, the below are collateral issues for most license types.

1.  Publication of Discipline and Case on the Internet

All of the licensee agencies in California are connected to an online, licensee, look-up system. This permits consumers to look-up a licensee, verify their licensed status, and review their license history. Most of the licensing agencies report license discipline that gets posted on this platform.

In addition, the documents that make-up the licensing matter filed against you, filed by you, and any eventual settlement agreement or decision-and-order, are public documents. Thus, the public has a right to access those documents. At a minimum, this is through the Public Records Act. However, a large number of licensing agencies created and provide access to their own searchable databases of these public documents. This allows any web novice the ability to look a licensee up even further and find out the specific allegations of misconduct resulting in the license discipline.

2.  Professional Liability Insurance

Just like most insurance, the rate professionals pay for their liability insurance is dependent upon risk. A licensee without any issues will pay less than another licensee with a single issue of misconduct. Furthermore, depending upon the type or scope of alleged misconduct, it may lead to your carrier dropping you completely.

3.  Membership in Professional Associations and Societies

Many professionals enjoy membership in exclusive associations and societies. However, membership is often contingent on having good standing with the underlying licensing agency of the profession. If you receive license discipline, this can lead to your membership being suspended or even revoked.

4.  Employment

Many professionals are employed by a third party organization or are associated with other licensed professionals. Many of these employers or associations market themselves as being of a certain ilk; specifically, no license discipline or even worrisome clouds of doubt on the conduct or character of its members or employees. As a result, a license investigation – let alone discipline – can mar someone’s employment. It could lead to your employer investigating you or even terminating your employment, lest they be associated with a licensee with a restricted license.

5.  Admissions in Further Actions

When agreeing to a settlement agreement, the professional licensee needs to be mindful of the public nature of the discipline. As explained above, this can impact employment, insurance, and other third parties.

In addition, it could lead to further legal entanglements. Specifically, a settlement agreement may cause the licensee to make certain admissions of acts. Those admissions could then be carried over and used against the licensee in a civil lawsuit or even a criminal case. So, you could unwittingly place yourself into a nightmare situation – thinking you are putting an end to the matter, but in reality, creating two more paths of legal uncertainty.

Bonus #1 – Reporting Obligations

License discipline typically carries forward reporting obligations. Obviously, this includes your employer and liability insurance carrier. However, it may include third party associations and other practice areas for which your are licensed. This can also include out-of-state reporting.

Bonus #2 – Applications

Similar to bonus #1, you will also have to report the license discipline on future applications. This could renewals, applications to other states, and applications for privileges or new insurance.