When was the last time you read your Principal Investigator’s agreement cover to cover?

For many clinical trial sites, the physician employment contract feels like a box-checking exercise. Draft it, sign it, file it away, and move on. But here’s the uncomfortable truth: These agreements are the foundation of your research program and the wrong clause can blow up your site financially, operationally, and legally. That’s why I call PI agreements ticking time bombs.

In this issue, we’ll dig into the hidden risks and what every site leader should watch for.

Compensation: When Bonuses Become Bribes

The most common, and most dangerous, mistake lies in how sites structure physician pay.

It’s tempting to tie bonuses to volume of subject enrollment or completion. After all, sponsors love metrics, and PIs want to feel rewarded for results. But regulators see it differently. Payment structures tied too closely to outcomes or volume based payments can look like inducements or kickbacks.

💡 Key point: Pay physicians for their time, expertise, and oversight—not for the number of subjects they recruit. That’s how you show value while staying compliant.

Data Ownership: Who Really Controls the Records?

Here’s a nightmare scenario: a PI leaves your site and claims the trial data belongs to them. Without clear contractual language, you could lose access to critical study records or face delays in reporting to sponsors. This is not a theoretical risk. I have faced it with clients.t can damage your sponsor relationships, delay study closeouts, and even invite regulatory scrutiny.

💡 Key point: Spell out—explicitly—that the site owns the data and study records. Physicians generate the data, but the site must control and safeguard it.

Non-Competes: Protecting Your Site Without Overreaching

You’ve invested in building relationships with sponsors and training your PI. But what’s to stop them from taking that same protocol across the street to a competitor? Without a tailored non-compete, nothing. But are you even allowed a non-compete?

The problem is, overly broad non-competes are often unenforceable (and in some states, non competes are themselves unenforceable). Courts will strike them down if they block a physician from practicing medicine generally. When possible, keep the restriction narrow, specific, and tied to legitimate business interests.

💡 Key point: Draft non-competes that protect your trial activity—not the physician’s entire career.

Termination: Don’t Get Stuck with the Wrong PI

Many cookie-cutter contracts fail to anticipate compliance fallout. What if your PI loses their license? Gets excluded from federal programs? Or worse, is under FDA investigation?

If your agreement doesn’t give you the right (but not the responsibility) to terminate quickly under those conditions, you could be forced to keep a high-risk PI on staff. That puts your site, your sponsors, and your reputation in jeopardy. I had a client who was sued for not keeping the contract going despite literal jail time being considered.

💡 Key point: Include clear, immediate termination rights for compliance-critical situations: loss of license, OIG exclusion, FDA disqualification, or major protocol violations.

So Why Does This Matter Now?

Clinical research is under more scrutiny than ever. Sponsors are demanding transparency, regulators are stepping up enforcement, and competitors are circling. A weak PI agreement can sink your business.

The risks aren’t hypothetical. Sites have lost data, faced audits, or been dragged into lawsuits because of sloppy contracts.

What You Should Do Next

If you haven’t revisited your physician contracts in a while, now’s the time.

• Audit your compensation structures to make sure they don’t cross compliance lines.
• Review your data ownership clauses to ensure your site has clear rights.
• Tighten your non-competes so they’re enforceable but protective.
• Update your termination provisions to reflect real-world risks.

And don’t wait until a regulator, sponsor, or departing PI forces your hand. By then, it’s too late.

How the Kulkarni Law Firm, P.C. Can Help

At the Kulkarni Law Firm, we serve as outside general counsel to clinical trial sites across the country. We help you draft, review, and negotiate PI agreements that:

• Keep regulators satisfied
• Protect your site’s financial stability
• Secure your data and sponsor relationships
• And most importantly, keep you from losing your shirt when things go wrong

If you’re running a site—or planning to grow one—you don’t need another time bomb sitting in your filing cabinet. You need agreements that shield your business and give you room to thrive.

👉 Visit kulkarnilawfirm.com to learn more about our general counsel services and schedule a conversation today.

Final Thought

PI agreements look routine, but they carry extraordinary weight. With the right structure, they protect your site. With the wrong structure, they can quietly undermine everything you’ve built.

The good news? You don’t need to face this alone. Get your agreements reviewed, get them right, and give yourself the peace of mind your business deserves.

Because in clinical research, the biggest risks aren’t always the ones you see coming.