<PAGE>

                                                                  EXHIBIT 10.16

                             EMPLOYMENT  AGREEMENT
                             ---------------------

     This Employment Agreement (this "Agreement") is made and entered into as of
the 7th day of December, 1999 (the "Effective Date"), between Concentra Managed
Care, Inc., a Delaware corporation (the "Company"), and Brad Harslem
("Executive").

                                  WITNESSETH:

     WHEREAS, Executive desires to be employed as Senior Vice President and
Chief Information Officer of the Company and the Company desires to employ
Executive in such capacity; and

     WHEREAS, Executive is desirous of committing himself to serve the Company
on the terms herein provided.

     NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the parties hereto agree as follows:

     1.   Employment and Term.  The Company hereby agrees to employ Executive as
          -------------------
its Senior Vice President and Chief Information Officer, and Executive hereby
agrees to accept such employment, on the terms and conditions set forth herein,
for the period commencing on the Effective Date and expiring as of 11:59 p.m. on
the anniversary of the Effective Date (unless sooner terminated as hereinafter
set forth) (the "Term"); provided, however, that commencing on such anniversary
                         --------  -------
date, and each anniversary of the date hereof thereafter, the Term of this
Agreement shall automatically be extended for one additional year unless at
least thirty (30) days prior to each such anniversary date, the Company or
Executive shall have given notice that it or he, as applicable, does not wish to
extend this Agreement.

     2.   Duties and Restrictions.
          -----------------------

          (a) Duties as Employee of the Company.  Executive shall, subject to
              ---------------------------------
the supervision of the Company's Chief Executive Officer or his designee, serve
as the Company's Senior Vice President and Chief Information Officer, with all
such powers as may be set forth in the Company's Bylaws with respect to, and/or
are reasonably incident to, such officerships.

          (b) Other Duties.  Executive agrees to serve as requested by the
              ------------
Company as a director of the Company's subsidiaries and affiliates and in one or
more executive offices of any of the Company's subsidiaries and affiliates;

provided, that the Company indemnifies Executive for serving in any and all such
--------
capacities in a manner acceptable to the Company and Executive.  Executive
agrees that he shall not be entitled to receive any compensation for serving in
any capacities of the Company's subsidiaries and affiliates other than the
compensation to be paid to Executive by the Company pursuant to this Agreement.

          (c) Noncompetition.  Executive agrees that he will not, for a period
              --------------
of one year following the termination of his employment with the Company, (1)
solicit the employment of, endeavor to entice away from the Company or its
subsidiaries or affiliates or otherwise

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interfere with any person who was an employee of or consultant to the Company or
any of its subsidiaries or affiliates during the one year period preceding such
termination, or (2) be employed by, associated with, or have any interest in,
directly or indirectly (whether as principal, director, officer, employee,
consultant, partner, stockholder, trustee, manager, or otherwise), any
occupational healthcare company or managed care company which has a principal
line of business that is directly competitive with the Company or its
subsidiaries or affiliates in any geographical area in which the Company or its
subsidiaries or affiliates engage in business at the time of such termination or
in which any of them, prior to termination of Executive's employment, evidenced
in writing its intention to engage in business. Notwithstanding the foregoing,
Executive shall not be prohibited from owning five percent or less of the
outstanding equity securities of any entity whose equity securities are listed
on a national securities exchange or publicly traded in any over-the-counter
market.

          (d) Confidentiality.  Executive shall not, directly or indirectly, at
              ---------------
any time during or following the termination of his employment with the Company,
reveal, divulge, or make known to any person or entity, or use for Executive's
personal benefit (including, without limitation, for the purpose of soliciting
business, whether or not competitive with any business of the Company or any of
its subsidiaries or affiliates), any information acquired during the course of
employment hereunder with regard to the financial, business, or other affairs of
the Company or any of its subsidiaries or affiliates (including, without
limitation, any list or record of persons or entities with which the Company or
any of its subsidiaries or affiliates has any dealings), other than (1) material
already in the public domain, (2) information of a type not considered
confidential by persons engaged in the same business or a similar business to
that conducted by the Company, or (3) material that Executive is required to
disclose under the following circumstances:  (A) in the performance by Executive
of his duties and responsibilities hereunder, reasonably necessary or
appropriate disclosure to another employee of the Company or to representatives
or agents of the Company (such as independent public accountants and legal
counsel); (B) at the express direction of any authorized governmental entity;
(C) pursuant to a subpoena or other court process; (D) as otherwise required by
law or the rules, regulations, or orders of any applicable regulatory body; or
(E) as otherwise necessary, in the opinion of counsel for Executive, to be
disclosed by Executive in connection with the prosecution of any legal action or
proceeding initiated by Executive against the Company or any subsidiary or
affiliate of the Company or the defense of any legal action or proceeding
initiated against Executive in his capacity as an employee or director of the
Company or any subsidiary or affiliate of the Company.  Executive shall, at any
time requested by the Company (either during or after his employment with the
Company), promptly deliver to the Company all memoranda, notes, reports, lists,
and other documents (and all copies thereof) relating to the business of the
Company or any of its subsidiaries or affiliates which he may then possess or
have under his control.

     3.   Compensation and Related Matters.
          --------------------------------

          (a) Base Salary.  Executive shall receive a base salary paid by the
              -----------
Company ("Base Salary") at the annual rate of Two Hundred Twenty-Five Thousand
Dollars ($225,000) during each calendar year of the Term, payable in
substantially equal monthly installments (or such other more frequent times as
executives of the Company normally are paid).  In addition,

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<PAGE>

the Company's Board of Directors or Option and Compensation Committee of the
Board of Directors shall, in good faith, consider granting increases in the Base
Salary based on such factors as Executive's performance and the growth and/or
profitability of the Company, but the Company shall have no obligation to grant
such increases in compensation.

          (b) Bonus Payments.  Executive shall be entitled to receive, in
              --------------
addition to the Base Salary, such bonus payments, if any, as the Board of
Directors or the Option and Compensation Committee of the Board of Directors may
specify.  With respect to calendar year 2000, and subject in all respects to the
Company's standard policies with respect to the earning and payment of bonus
compensation, Executive will be eligible for bonus compensation of up to fifty
percent (50%) of Base Salary based on achievement of individual and corporate
performance objectives which will be developed following the Effective Date.

          (c) Expenses.  During the term of his employment hereunder, Executive
              --------
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by him (in accordance with the policies and procedures established by
the Board of Directors for its senior executive officers) in performing services
hereunder, provided that Executive properly accounts therefor in accordance with
Company policy.

          (d) Other Benefits.  The Company shall not make any changes in any
              --------------
employee benefit plans or other arrangements in effect on the date hereof or
subsequently in effect in which Executive currently or in the future
participates (including, without limitation, each pension and retirement plan,
supplemental pension and retirement plan, savings and profit sharing plan, stock
or unit ownership plan, stock or unit purchase plan, stock or unit option plan,
life insurance plan, medical insurance plan, disability plan, dental plan,
health-and-accident plan, or any other similar plan or arrangement) that would
adversely affect Executive's rights or benefits thereunder, unless such change
occurs pursuant to a program applicable to all executives of the Company and
does not result in a proportionately greater reduction in the rights of or
benefits to Executive as compared with any other executive of the Company.
Executive shall be entitled to participate in or receive benefits under any
employee benefit plan or other arrangement made available by the Company now or
in the future to its senior officers and key management employees, subject to
and on a basis consistent with the terms, conditions, and overall administration
of such plan or arrangement.  Nothing paid to Executive under any plan or
arrangement presently in effect or made available in the future shall be deemed
to be in lieu of the Base Salary payable to Executive pursuant to paragraph (a)
of this Section 3.

          (e) Vacations.  Executive shall be entitled to twenty (20) paid
              ---------
vacation days in each calendar year, or such additional number as may be
determined by the Board of Directors from time to time.  For purposes of this
Section 3(e), weekends shall not count as vacation days and Executive shall also
be entitled to all paid holidays given by the Company to its senior officers.

          (f) Perquisites.  Executive shall be entitled to receive the
              -----------
perquisites and fringe benefits appertaining to senior officers of the Company
in accordance with any practice established by the Board of Directors.  In the
event Executive's employment hereunder is terminated (whether by Executive or
the Company) for any reason whatsoever (other than

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Executive's death), then the Company shall, at Executive's written request and
to the extent permitted by the terms of such policies and applicable law, assign
and convey to Executive any life insurance policies maintained by the Company on
the life of Executive, who shall thereafter be solely responsible, at his
election, to pay all premiums payable after such assignment and conveyance to
maintain the coverage under such policies with respect to Executive. Executive
shall not be required to pay any money or other consideration to the Company
upon such assignment and conveyance, it being acknowledged and agreed by the
parties hereto that Executive's execution and delivery hereof constitute
adequate and satisfactory consideration for such assignment and conveyance.

          (g) Proration.  Any payments or benefits payable to Executive
              ---------
hereunder in respect of any calendar year during which Executive is employed by
the Company for less than the entire year, unless otherwise provided in the
applicable plan or arrangement, shall be prorated in accordance with the number
of days in such calendar year during which he is so employed.

     4.   Executive's Office and Relocation.
          ---------------------------------

          (a) Executive shall primarily perform his duties and responsibilities
hereunder at the Company's offices located at 5080 Spectrum Drive, Addison,
Texas (or at such other location within the Dallas, Texas, metropolitan area, to
which the Company may in the future relocate such principal executive offices),
except for reasonable required travel on the Company's business.  If the Company
requests Executive to report for the performance of his services hereunder on a
regular or permanent basis at any location or office more than thirty-five (35)
miles from the office location described in the first sentence of this Section
4, and Executive agrees to such change, the Company shall, in accordance with
the Company's standard relocation expense reimbursement policies reimburse
Executive for reasonable relocation and moving expenses.

          (b) Following the Effective Date, in accordance with the Company's
standard relocation expense reimbursement policies, the Company shall reimburse
Executive for reasonable relocation and moving expenses incurred by Executive in
relocating his home from Omaha, Nebraska, to the Dallas, Texas, metropolitan
area.

     5.   Termination.  Executive's employment hereunder may be terminated by
          -----------
the Company or Executive, as applicable, without any breach of this Agreement,
only under the following circumstances.

          (a) Death.  Executive's employment hereunder shall terminate upon his
              -----
death.

          (b) Disability.  If, as a result of Executive's incapacity due to
              ----------
physical or mental illness, Executive shall have been unable, with reasonable
accommodation, to perform the essential functions of his duties and
responsibilities hereunder on a full time basis for one hundred eighty (180)
consecutive calendar days, and within thirty (30) days after written notice of
termination is given (which may occur before or after the end of such one
hundred eighty (180) day period) Executive shall not have returned to the
performance of his material

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managerial duties and responsibilities hereunder on a full time basis, the
Company may terminate Executive's employment hereunder.

          (c) Cause.  Subject to the provisions of Section 7(d), the Company may
              -----
terminate Executive's employment hereunder for Cause.  For purposes of this
Agreement, the Company shall have "Cause" to terminate Executive's employment
hereunder upon:

              (1) Executive's willful or intentional failure to perform or gross
negligence in the performance of Executive's material duties and
responsibilities hereunder (other than any such failure resulting from
Executive's incapacity due to physical or mental illness or any such actual or
anticipated failure after the issuance of a Notice of Termination for Good
Reason (as hereinafter defined) by Executive);

              (2) The commission by Executive of dishonesty or fraud of a
material nature in connection with the performance of his duties hereunder, or
willful or intentional misconduct of a material nature in connection with the
performance of his duties hereunder;

              (3) The conviction of Executive, or the entering of a plea of
nolo contendere by Executive, with respect to a felony;

              (4) Unprofessional or unethical conduct of a material nature by
Executive in connection with the performance of his duties hereunder as
determined in a final adjudication of any board, institution, organization or
governmental agency having any privilege or right to pass upon the conduct of
Executive;

              (5) Intentional, willful, or grossly negligent conduct by
Executive which is materially detrimental to the reputation, character,
business, or standing of the Company, including, without limitation, the use by
Executive of a controlled substance; or

              (6) The continued breach by Executive of any of Executive's
material obligations under this Agreement.

          (d) Termination by Executive.  Subject to the provisions of Section
              ------------------------
7(c), and at his option, Executive may terminate his employment hereunder (1)
for Good Reason, or (2) if his health should become impaired to an extent that
makes the continued performance of his duties hereunder hazardous to his
physical or mental health or his life.

          For purposes of this Agreement, the termination of Executive's
employment hereunder by Executive because of the occurrence of any one or more
of the following events shall be deemed to have occurred for "Good Reason":

               (A)  a reduction in Executive's Base Salary or any other failure
by the Company to comply with Section 3 hereof that is not consented to or
approved by Executive;

               (B) the relocation of Executive's office at which he is to
perform his duties and responsibilities hereunder to a location outside of the
Dallas-Fort Worth, Texas, metropolitan area, or a materially adverse alteration
in the office space within which Executive is

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to perform his duties and responsibilities hereunder or in the secretarial and
administrative support provided to Executive; or

               (C) a failure by the Company or any subsidiary or affiliate of
the Company to comply with any other material term or provision hereof or of any
other written agreement between Executive and the Company or any such subsidiary
or affiliate.

     6.   Compensation Upon Termination or Failure to Renew.  Executive shall be
          -------------------------------------------------
entitled to the following compensation from the Company upon the termination of
his employment or upon the Company's delivery of notice pursuant to Section 1
that the Term of this Agreement shall not following any anniversary of the date
hereof be automatically extended for an additional year.

          (a) Death.  If Executive's employment shall be terminated by reason of
              -----
his death, the Company shall pay to such person as shall have been designated in
a notice filed with the Company prior to Executive's death, or, if no such
person shall be designated, to his estate as a death benefit, his Base Salary to
the date of his death in addition to any payments Executive's spouse,
beneficiaries, or estate may be entitled to receive pursuant to any pension or
employee benefit plan or other arrangement or life insurance policy maintained
by the Company.  In addition, the Company shall make payments of premiums to
continue the medical and dental insurance coverage of Executive's spouse and
children under age twenty-five (25) as in effect at and as of the date of
Executive's death (or to provide as similar coverage as possible for the same
premiums if the continuation of existing coverage is not permitted) for one (1)
year after the date of Executive's death, in each case to the extent such
coverage is available.

          (b) Disability.  During any period that Executive fails to perform his
              ----------
material managerial duties and responsibilities hereunder as a result of
incapacity due to physical or mental illness, Executive shall continue to
receive his Base Salary and any bonus payments until Executive's employment is
terminated pursuant to Section 5(b) hereof or until Executive terminates his
employment pursuant to Section 5(d)(2) hereof, whichever first occurs.  After
such termination, the Company shall pay to Executive, on or before the fifth day
following the Date of Termination (as hereinafter defined) his Base Salary to
the Date of Termination.  In addition, the Company shall make payments of
premiums as necessary to cause Executive and Executive's spouse and children
under age twenty-five (25) to continue to be covered by the medical and dental
insurance as in effect at and as of the Date of Termination (or to provide as
similar coverage as possible for the same premiums if the continuation of
existing coverage is not permitted) for one (1) year after the Date of
Termination, in each case to the extent such coverage is available.

          (c) Cause.  If Executive's employment shall be terminated for Cause,
              -----
the Company shall pay Executive his Base Salary through the Date of Termination
at the rate in effect at the time Notice of Termination is given. Such payments
shall fully discharge the Company's obligations hereunder.

          (d) Breach by the Company, for Good Reason, or Upon Failure to Renew.
              ----------------------------------------------------------------
If (1) in breach of this Agreement, the Company shall terminate Executive's
employment (it being

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<PAGE>

understood that a purported termination of Executive's employment by the Company
pursuant to any provision of this Agreement that is disputed and finally
determined not to have been proper shall be a termination by the Company in
breach of this Agreement), or (2) Executive shall terminate his employment for
Good Reason, or (3) the Company shall give Executive notice pursuant to Section
1 prior to any anniversary of the date hereof that the Term of this Agreement
shall not be automatically extended for an additional year on any such
anniversary date, then the Company shall pay Executive:

          (A) his Base Salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given;

          (B) in lieu of any further salary payments to Executive for periods
subsequent to the Date of Termination, the Company shall pay as severance pay to
Executive on or before the fifth day following the Date of Termination and on
the fifth day of each of the eleven (11) months thereafter (amounting to a total
of twelve (12) months), an amount in cash equal one-twelfth (1/12) of
Executive's annual Base Salary at the rate in effect at the time the Notice of
Termination is given; and

          (C) all benefits payable under the terms of any employee benefit plan
or other arrangement as of the Date of Termination.

       In addition, the Company shall make payments of premiums as necessary to
cause Executive and Executive's spouse and children under age twenty-five (25)
to continue to be covered by the medical and dental insurance as in effect at
and as of the Date of Termination (or to provide as similar coverage as possible
for the same premiums if the continuation of existing coverage is not permitted)
for one (1) year after the Date of Termination, in each case to the extent such
coverage is available.

       (e) Mitigation.  Executive shall not be required to mitigate the amount
           ----------
of any payment provided for in this Section 6 by seeking other employment or
otherwise; provided, however, that, anything herein to the contrary
           --------  -------
notwithstanding, in the event of the termination of Executive's employment prior
to a Change in Control (as defined in the Concentra Managed Care, Inc., 1997
Long-Term Incentive Plan) which occurs after the consummation of the Merger (as
defined in that certain Amended and Restated Agreement and Plan of Merger, dated
as of March 24, 1999, by and between Yankee Acquisition Corp., a Delaware
corporation, and the Company) (but not if Executive's employment terminates
after such a Change in Control), the amount of any payment pursuant to Section
6(d)(B) shall be reduced by any compensation earned by Executive as the result
of employment by another employer (whether as a director, officer, employee,
manager, owner, consultant, independent contractor, advisor or otherwise) after
the Date of Termination until the end of the twelve month period of clause (B)
of Section 6(d) above.

   7.  Other Provisions Relating to Termination.
       ----------------------------------------

       (a) Notice of Termination.  Any termination of Executive's employment by
           ---------------------
the Company or by Executive (other than termination because of the death of
Executive) shall be

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<PAGE>

communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.

       (b)  Date of Termination.  For purposes of this Agreement, "Date of
            -------------------
Termination" shall mean: (1) if Executive's employment is terminated by his
death, the date of his death; (2) if Executive's employment is terminated
because of a disability pursuant to Section 5(b), then thirty (30) days after
Notice of Termination is given (provided that Executive shall not have returned
to the performance of his duties on a full-time basis during such thirty (30)
day period); (3) if Executive's employment is terminated by the Company for
Cause or by Executive for Good Reason, then, subject to Sections 7(c) and 7(d),
the date specified in the Notice of Termination; (4) if the Company gives
Executive notice pursuant to Section 1 prior to any anniversary of the date
hereof that the Term of this Agreement shall not be automatically extended for
an additional year on any such anniversary date, the date upon which the Term
expires; and (5) if Executive's employment is terminated for any other reason,
the date on which a Notice of Termination is given.

       (c)  Good Reason.  Upon the occurrence of an event described in clauses
            -----------
(A) through (C) of the definition of "Good Reason" in Section 5(d), Executive
may terminate his employment hereunder for Good Reason within one hundred eighty
(180) days thereafter by giving a Notice of Termination to the Company to that
effect. If the effect of the occurrence of the event giving rise to Good Reason
under Section 5(d) may be cured, the Company shall have the opportunity to cure
any such effect for a period of thirty (30) days following receipt of
Executive's Notice of Termination. If the Company fails to cure any such effect,
the termination for Good Reason shall become effective on the date specified in
Executive's Notice of Termination. If Executive does not give such Notice of
Termination to the Company, then this Agreement will remain in effect; provided,
                                                                       --------
however, that the failure of Executive to terminate this Agreement for Good
-------
Reason shall not be deemed a waiver of Executive's right to terminate his
employment for Good Reason upon the occurrence of a subsequent event described
in Section 5(d) in accordance with the terms of this Agreement.

       (d)  Cause.  In the case of any termination of Executive for Cause, the
            -----
Company will give Executive a Notice of Termination describing in reasonable
detail, the facts or circumstances giving rise to Executive's termination (and,
if applicable, the action required to cure same) and will permit Executive
thirty (30) days to cure such failure to comply or perform. Cause for
Executive's termination will not be deemed to exist until the expiration of the
foregoing cure period, so long as Executive continues to use his best efforts
during the cure period to cure such failure. If within thirty (30) days
following Executive's receipt of a Notice of Termination for Cause, Executive
has not cured the facts or circumstances giving rise to Executive's termination
for Cause, then Executive's termination for Cause shall be effective as of the
date specified in the Notice of Termination.

                                       8
<PAGE>

       (e)  Interest.  Until paid, all past due amounts required to be paid by
            --------
the Company under any provision of this Agreement shall bear interest at the
highest non-usurious rate permitted by applicable federal, state, or local law.

     8. Successors; Binding Agreement.
        -----------------------------

        (a)  Successors.  This Agreement shall be binding upon, and inure to the
             ----------
benefit of, the Company, Executive, and their respective successors, assigns,
personal and legal representatives, executors, administrators, heirs,
distributees, devisees, and legatees, as applicable.


       (b)  Assumption.  The Company will require any successor (whether direct
            ----------
or indirect, by purchase of securities, merger, consolidation, sale of assets,
or otherwise) to all or substantially all of the business or assets of the
Company, by an agreement in form and substance reasonably satisfactory to
Executive, to expressly assume this Agreement and to agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Executive to
compensation from the Company in the same amount and on the same terms as he
would be entitled to hereunder if he terminated his employment for Good Reason,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.

       (c)  Certain Payments.  If Executive should die while any amounts would
            ----------------
still be payable to him hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to Executive's devisee, legatee, or other designee or, if there
be no such designee, to Executive's estate.

     9. Notice.  For purposes of this Agreement, all notices and all other
        ------
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when (a) delivered personally, (b) sent by
facsimile or similar electronic device and confirmed, (c) delivered by overnight
express, or (d) if sent by any other means, upon receipt. Notices and all other
communications provided for in this Agreement shall be addressed as follows:

            If to Executive:              Brad Harslem
                                          13310 Bedford Avenue
                                          Omaha, Nebraska  68164

            If to the Company:            Concentra Managed Care, Inc.
                                          5080 Spectrum Drive, Suite 400 - West
                                          Addison, Texas  75001
                                          Fax No.:  (972) 387-1938
                                          Attention:  General Counsel

or to such other address as either party may have furnished to the other in
writing in accordance herewith.

                                       9
<PAGE>

     10.  Miscellaneous.  No provision of this Agreement may be modified,
          -------------
waived, or discharged unless such waiver, modification, or discharge is agreed
to in a written instrument signed by Executive and the Company.  No waiver by
either party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.  The validity,
interpretation, construction, and performance of this Agreement shall be
governed by the laws of the State of Delaware, excluding any choice-of-law
provisions thereof.

     11.  Attorney Fees.  All legal fees and costs incurred by Executive
          -------------
in connection with the resolution of any dispute or controversy under or in
connection with this Agreement shall be reimbursed by the Company to Executive
as bills for such services are presented by Executive to the Company, unless
such dispute or controversy is found to have been brought not in good faith or
without merit by a court of competent jurisdiction.

     12.  Validity.  The invalidity or unenforceability of any provision
          --------
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and
effect.

     13.  Counterparts.  This Agreement may be executed in several counterparts,
          ------------
each of which shall be deemed to be an original, but all of which together will
constitute one and the same agreement.

     14.  Entire Agreement; Effectiveness.  This Agreement constitutes the
          -------------------------------
entire agreement between the parties with respect to the subject matter hereof
and supersedes in all respects any and all prior employment agreements and/or
severance protection letters, agreements, or arrangements between Executive, on
the one hand, and the Company or any other predecessor in interest thereto or
any of their respective subsidiaries, on the other hand, which prior employment
agreements and/or severance protection letters, agreements, and arrangements, if
any, are hereby cancelled and of no further force or effect.

     15.  Right and Option of Company to Repurchase Shares Upon Termination of
          --------------------------------------------------------------------
Employment.
----------

          (a)  In the event that, prior to an initial public offering of the
Company's equity securities, Executive's employment with the Company is
terminated for any reason, the Company shall thereupon have the right and
option, but not the obligation, to purchase from Executive all or any part of
the shares of common stock, par value $.01 per share, of the Company (the
"Shares") held by Executive as of the date Executive's employment so ceases at a
purchase price equal to the greater of (1) Sixteen and 50/100 Dollars ($16.50)
per Share, and (2) the fair market value (as hereinafter defined) of such Shares
as of the date Executive's employment so ceases.

          (b)  The Company may exercise the right and option provided in Section
15(a) above by giving Executive a written notice of such election to purchase at
any time within ninety

                                       10
<PAGE>

(90) days after the date Executive's employment so ceases. The closing for the
purchase by the Company of any such Shares pursuant to the provisions of said
Section 15(a) shall take place at the offices of the Company on the date
specified in such written notice, which date shall be a business day not later
than sixty (60) days after the date such notice is given. At such closing,
Executive will deliver or cause to be delivered such Shares, duly endorsed for
transfer, against payment of the applicable purchase price therefor. Such
purchase price shall be payable to Executive in cash or other immediately
available funds. To the extent the Company chooses not to exercise such right
and option under said Section 15(a) to purchase any Shares, such Shares shall
thereupon cease to be subject to the provisions of this Section 15.

          (c)  For the purposes of this Agreement, "fair market value" of a
Share as of any date shall mean the value of such stock as determined in good
faith by the Board of Directors of the Company on a basis consistent with the
manner of determining the fair market value of the Company's common stock for
purposes of offering the Company's common stock to equity investors.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.


                                      COMPANY:

                                      CONCENTRA MANAGED CARE, INC.


                                      By: /s/ Richard A. Parr II
                                          --------------------------------------
                                          Richard A. Parr II
                                          Executive Vice President and Secretary




                                      EXECUTIVE:

                                               /s/ Brad Harslem
                                      ------------------------------------------
                                                   Brad Harslem

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