Explaining the Consulting Agreement Rider for Outside Professional Activities
The Institute’s policies governing outside professional activities are designed to encourage active participation in research, which is enriched in many cases by direct professional engagement with industry, business, government, and other institutions.
To that end, outside consulting privileges are extended to faculty members and holders of certain other appointment types at MIT, as summarized in this chart. When pursuing outside activities, faculty members and other individuals must be attentive to their obligations to MIT and take appropriate steps to ensure that such activities do not take precedence over their primary commitment to MIT.
Although neither the Office of the General Counsel, nor any other MIT office, is able to advise MIT community members in negotiating their personal service contracts for outside activities, a set of tools has been developed to assist researchers in evaluating their engagements and navigating MIT requirements. The Community COI Portal (Touchstone Login Required) developed by the Office of the Vice President for Research (VPR) sets forth detailed conflict of interest guidance for faculty, researchers and staff. This guidance includes important considerations when reviewing the terms of proposed outside consulting agreements, as well as information on internal approval requirements, relevant MIT policies, and disclosure obligations. The Foreign Engagement website maintained by VPR also has information and helpful FAQs to review when an individual is considering an outside engagement with an international counterparty.
In addition to the guidance, another useful tool made available on the Community COI Portal is a “rider” or “addendum” that individuals may choose to attach to their outside consulting agreements to clarify certain important points. The addendum is a one-page document that can be executed by the individual and the relevant third party and attached to the back of the consulting agreement to modify its terms.
The following sections explain the key provisions in the consulting agreement addendum¹.
In the addendum, specially-defined terms have the meanings ascribed below.
“Addendum” means the rider itself.
“Consultant” means the MIT individual that is entering into the consulting agreement or other outside performance contract.
“Company” means the third party entity that will engage the Consultant.
“Agreement” means the underlying contract entered into between the Consultant and the Company, which is often a consulting agreement, but may also have other names, such as a letter of engagement, offer letter, memorandum of agreement, memorandum of understanding, service contract, etc.
When using the Addendum, the Consultant should fill in his or her name, the name of the Company, and the name and date of the underlying Agreement in the indicated spaces at the top of the rider by opening and editing the document in Microsoft Word.
Primacy of MIT Commitment/Controlling Effect of Rider
The Addendum begins with a clear statement that the Consultant’s primary responsibility is to MIT, and notes the Consultant’s obligation to comply with all MIT Policies. The Addendum later specifies that these obligations—and the terms of the Addendum—take precedence if they conflict with any of the terms of the underlying Agreement. This allows the Addendum to be attached without otherwise requiring line-by-line renegotiation of the Agreement.
“Company acknowledges that Consultant’s primary responsibilities are to the Massachusetts Institute of Technology and that Consultant is required to comply with MIT policies, including MIT’s Policies on Intellectual Property, Conflicts of Interest, Outside Professional Activities, Use of Name and other matters, as amended from time to time . . . .”
“To the extent that there is a conflict between the terms of the MIT Policies or this Addendum, on the one hand, and the terms of the Agreement, on the other, the terms of the MIT Policies and this Addendum shall control.”
The Addendum goes on to specify that the Agreement must not restrict the Consultant’s research or teaching activities at MIT, or the ability to publish research results for work done at MIT.
“Nothing in the Agreement shall be construed to restrict or hinder Consultant’s ability to conduct current or future research or teaching assignments or activities with MIT, regardless of the source of sponsorship, if any, to limit Consultant’s ability to publish work generated in the performance of Consultant’s research or teaching at MIT, or to infringe on Consultant’s academic freedom.”
The Addendum specifies that the Consultant will not be able to assign or license intellectual property rights that conflict with MIT’s interest in that intellectual property, either under MIT P&P 13.1 or the individual’s IPIA with MIT.
“Company specifically acknowledges that Consultant cannot assign or convey or license to or vest in Company any rights in any intellectual property whatsoever, whether or not patentable or copyrightable, that conflict with MIT’s rights in or to such intellectual property, including without limitation, under MIT Policy 13.1 . . . or Consultant’s Inventions and Proprietary Information Agreement with MIT.”
Use of Name
The Addendum also restricts the Company’s ability to use the name, trademarks or logos of MIT. TLO provides additional information about the important limits by which faculty, researchers, and staff must abide when using MIT’s name in connection with outside activities. These limits include using MIT’s name only to identify the Consultant by his or her affiliation (e.g., Jane Smith, Professor of Biology, Massachusetts Institute of Technology). Faculty members and others engaged in activities involving business relationships with third parties may contact the TLO for information and assistance on name use issues at email@example.com.
“Company may not use the name or any trademarks or logos of MIT or any of its schools or departments, labs or centers, other than to identify MIT as Consultant’s employer in a biographical context, without prior written permission from MIT’s Technology Licensing Office.”
Prudence of Underlying Activities
When engaging with third parties to conduct outside activities, MIT community members are not just responsible for complying with MIT policies, but also all relevant federal, state and local laws and regulations. While it is impossible to ensure compliance with these requirements via a simple rider alone, the Addendum does seek to address certain key points. In particular, the language below is aimed at making clear that illegal or illicit activities that seek to undermine established academic practices or to improperly transfer technology are not permitted. If an individual has any questions about legal or regulatory compliance (including tax compliance) for an outside activity, then they should seek their own outside legal advice. For questions about how outside activities may impact disclosure requirements or research compliance with respect to their MIT responsibilities, individuals should contact firstname.lastname@example.org.
“Nothing in the Agreement shall require or encourage Consultant to circumvent or compromise established academic practices, such as those that apply to grant/proposal peer reviews or hiring/tenure deliberations; to improperly replicate U.S. government-funded research in another country; to improperly transfer proprietary technology, software, or unpublished data or methods; to misrepresent Consultant’s position or affiliation with Company in connection with publications, patent filings, funding applications or other statements or representations; or to violate U.S. export control laws or any other applicable law or regulation.”
A faculty member, researcher or staff person at MIT cannot unequivocally ensure a third party that the individual or MIT will keep an outside engagement (or an outside contract) confidential. The rider makes this point by referencing that the engagement may need to be disclosed to the Consultant’s department head or others at MIT.
If the Consultant is also conducting federally-sponsored research, then there may be additional disclosure requirements. Recently, the National Institutes of Health (NIH) have begun requiring that principal investigators and senior/key personnel provide the agency with PDF copies of outside contracts with foreign entities that are reported as part of their Other Support submission. This would include an outside agreement with a foreign entity for consulting or other services if it is an activity that would need to be reported as Other Support. It is possible that other federal agencies may enact similar requirements in the future. The NIH has made clear that confidentiality or other similar provisions in the underlying contract do not have an effect on the need to disclose the contract to the government. For more information on the NIH requirement, see the “More Information” tab available at https://ecd.mit.edu/ (Touchstone Login Required).
“Notwithstanding anything in the Agreement, neither MIT (to the extent an Agreement is in its possession) nor Consultant will be prohibited from disclosing the Agreement to U.S. governmental agencies, if required, and no notice will need to be given to Company with respect thereto.”
Not an Agent of MIT/Individual Capacity
The Addendum also states that the Consultant is not acting as an agent of MIT and “has no authority to act for or bind MIT,” including with respect to intellectual property matters or any confidentiality restrictions.
The Addendum goes on to specify that the Consultant may not make use of MIT proprietary information, intellectual property, facilities or resources, or other personnel in connection with the conduct of any outside activities.
“Company agrees that it will not request or require Consultant, in the performance of his or her services to the Company, to employ proprietary information or intellectual property of MIT, to make use of MIT’s time, facilities or resources, or to involve MIT undergraduate or graduate students, employees, post-doctoral trainees or any other MIT personnel other than Consultant.”
The consulting agreement rider made available on the Community COI Portal is a recommended resource when an MIT faculty member, researcher or staff person is conducting outside professional activities in an individual capacity. The rider helps protect the interests of MIT and the interests of the individual as an MIT researcher or employee. In addition to using this rider and the other resources on the Community COI Portal and Foreign Engagement website, MIT community members are encouraged to seek their own personal legal representation when pursuing outside activities in an individual capacity.
All references to the consulting agreement addendum are to the version made available on the Community COI Portal as of March 18, 2022.