<PAGE>


                                                                   Exhibit 10.14

                              QUADRAMED CORPORATION

                    Second Amendment of Employment Agreement

This Second Amendment (the "Second Amendment"), dated this ____ day of November,
2002, is by and between QuadraMed Corporation, a corporation organized under the
laws of the State of Delaware and having its principal place of business at San
Rafael, California (the "Company"), and Dean A. Souleles, an individual
currently residing 20532 Hiawatha Street in Chatsworth, California 91311 (the
"Employee"), and

                                Witnesseth That:

     Whereas, Employee and the Company have heretofore entered into an
Employment Agreement, dated as of August 16, 2000, which was amended pursuant to
that Amendment of Employment Agreement, dated September 19, 2001 (collectively,
the "Employment Agreement");

     Whereas, Employee and the Company desire to revise the Employment Agreement
to incorporate a change in Employee's position, specify certain involuntary
termination protections as approved by the Compensation Committee, and
modification of related provisions;

     Now, Therefore, Employee and the Company hereby agree that from and after
the date of execution of this Second Amendment that the Employment Agreement
shall be and is hereby amended as follows:

     1.   Part One of the Employment Agreement is hereby amended by deleting the
existing definition of "Involuntary Termination," and inserting the following in
lieu thereof:

          "Termination for Cause" will mean an Involuntary Termination of
     Employee's employment for (i) one or more alleged acts of fraud,
     embezzlement, misappropriation of proprietary information, misappropriation
     of the Company's trade secrets or other confidential information, a breach
     of Employee's fiduciary duties to the Company or any other misconduct
     adversely affecting the business reputation of the Company in a material
     manner; or (ii) Employee's failure to adhere to any written Company policy
     or the terms of this Agreement or Employee's failure to perform the
     material duties of Employee's position following written notice from the
     Company describing the failure and a reasonable opportunity to cure such
     failure, if such failure is susceptible of cure."

<PAGE>

                                      - 2 -

     2.   Part Two, Section 1 of the Employment Agreement, pertaining to
Employee's employment and duties for the Company, is hereby amended by deleting
the existing section in its entirety and inserting the following in lieu
thereof:

          1.   Employment and Duties. The Company will employ Employee as an
     executive officer in the position of President of the Enterprise Division.
     Employee's office is located in Chatsworth, California. Employee agrees to
     continue in such employment for the duration of the Employment Period and
     to perform in good faith and to the best of Employee's ability all services
     which may be required of Employee in Employee's executive position and
     render such services at all reasonable times and places in accordance with
     reasonable directives and assignments issued by the Board and the Company's
     Chief Operating Officer and/or Chief Executive Officer. During Employee's
     Employment Period, Employee will devote Employee's full time and effort to
     the business and affairs of the Company within the scope of Employee's
     executive office.

     2.   Part Two, Section 10 of the Employment Agreement, pertaining to
Employee's severance benefits on certain terminations of his employment, is
hereby amended by deleting the existing Subsection A in its entirety and
inserting the following in lieu thereof:

          A.   Severance Benefit. If Employee is terminated by reason of an
     Involuntary Termination of Employee's employment (other than a Termination
     for Cause), the Company will make a severance payment to Employee in an
     aggregate amount equal to the sum of one (1) times Employee's then-current
     annual rate of base salary in monthly installments over a one year period
     following the date of Employee's Involuntary Termination.

     3.   Part Three, Section 9 of the Employment Agreement, pertaining to the
arbitration of any disputes under the Employment is amended by deleting the
existing section in its entirety and inserting the following in lieu thereof:

<PAGE>

                                      - 3 -

          9.   Arbitration. Any controversy which may arise between Employee and
     the Company with respect to the construction, interpretation or application
     of any of the terms, provisions, covenants or conditions of this Agreement
     or any claim arising from or relating to this Agreement will be submitted
     to final and binding arbitration in Alexandria, Virginia or in any other
     mutually acceptable location in accordance with the rules of the American
     Arbitration Association then in effect.

          Employee and the Company understand and agree that the Company shall
     bear the Arbitrator's fee and any other type of expense or cost that the
     employee would not be required to bear if he or she were free to bring the
     dispute or claim in court as well as any other expense or cost that is
     unique to arbitration. Employee and the Company shall each pay their own
     attorneys' fees incurred in connection with the arbitration, and the
     Arbitrator will not have authority to award attorneys' fees unless a
     statute or contract at issue in the dispute authorizes the award of
     attorneys' fees to the prevailing party, in which case the Arbitrator shall
     have the authority to make an award of attorneys' fees as required or
     permitted by applicable law. If there is a dispute as to whether the
     Company or Employee is the prevailing party in the arbitration, the
     Arbitrator will decide this issue.

     4.   Except as provided in the preceding paragraphs of this Second
Amendment, the provisions of the Employment Agreement remain in full force and
effect in accordance with their respective terms.

     In Witness Whereof, and intending to be legally bound hereby, the parties
hereto have caused this Second Amendment to be duly executed under seal as of
the date first above written.

                                        QUADRAMED CORPORATION


                                        By: /s/ Michael S. Wilstead
                                            ------------------------------------
                                            Michael S. Wilstead
                                            Its Chief Operating Officer


                                        EMPLOYEE


                                        /s/ Dean A. Souleles
                                        ----------------------------------------
                                        Dean A. Souleles