MSU Authorizing Contracts between the University and a Member of its Faculty, Research Staff, or Coaching Staff or a Company in which the Employee has an Interest under Specified Circumstances Policy
Authority: Academic Affairs and Enrollment Management
Date Enacted or Revised: June 6, 2005
In fulfillment of University of Louisiana System policy M-15, McNeese State University has established this policy authorizing contracts between the university and a member of the faculty, research staff, or coaching staff or a company in which the employee has an interest under specified circumstances. This policy is established to fulfill the System obligation to assist in the important mission of economic development, technology transfer, commercialization of technology, and coaching endeavors as provided for in Louisiana R.S. 42:1101 to R.S. 42:1148, especially 42:1111, 42:1112, 42:1113, and 42:1123(10)
The following definitions shall apply throughout the remainder of this policy section:
- “Employee” means any member of a faculty, research staff, or coaching staff at McNeese State University within the University of Louisiana System.
- “Private entity” means any outside foundation, corporation, company, or partnership in which the employee, or a member of his or her immediate family, has an economic interest.
- “Economic interest” means a five percent (5%) or larger shareholder position.
Types of Contracts Permitted
For a proposed contract between McNeese State University and an employee or between McNeese State University and the private entity to be permitted under this policy, the contract must relate to either: 1) the disposition of a patent, copyright, licensing right, or royalty which is attached to a discovery, technique, technology, or activity resulting from research done, in whole or in part, by the employee in the course of his or her employment at the university; 2) a business activity relating to or resulting from research conducted, in whole or in part, by McNeese State University employee in the course of his or her employment at the university; or 3) a business activity relating to or resulting from a coaching activity of a McNeese State University employee conducted in the course of his or her employment at the university. All contracts between the university and an employee or private entity must be in accordance with the following minimum provisions:
- All contracts and correspondence must be in writing;
- The ownership interests in the private entity must be disclosed in full and in writing to the appropriate university office or designee of the university president;
- All negotiations between an employee, or the private entity, and the university must be at arm’s length. Neither the employee nor his or her immediate family, when they are also employed by the university, may participate in negotiations or decision making on behalf of the university. Contracts otherwise permitted will be disallowed when an employee or member of the employee’s immediate family has participated on behalf of the university in the negotiation of a contract. The university may, however, elect to consult the employee regarding technical or scientific aspects of the proposed contract;
- Another university employee who is not under the direct supervision of or a member of the department of the employee submitting the contract must negotiate the contract on behalf of the university;
- A McNeese State University committee, appointed by the university president, must review all such proposed contracts after they have been negotiated and the employee and/or the private entity have agreed to their terms. Membership on this committee may include representatives from both the public and private sectors. The president or designee shall chair the committee. This committee will be empowered by the Board of Supervisors to certify to the Board of Regents, per Louisiana R.S. 1123(10(a), semi-annually that entering into the contract will contribute to the economic development of the state and, among readily available alternatives, entering into the contract serves the public interest;
- An appropriate university official must certify to the committee that entering into the contract will not interfere or conflict with the performance of the employee or the employee’s fulfillment of his/her obligation to the university;
- An employee with a joint appointment must receive the approval of the other institution, provided, however, that where agreement or approval cannot be reached or is unobtainable, then the university president shall make the final decision without such approval; and
With respect to payments made pursuant to any contract perfected under this policy, the following standards must be followed:
- Compensation to the university for the use of services, supplies, facilities, equipment, or technology must be paid at the same rate that such services, supplies, facilities, equipment, or technology would be made available to the general public or to others under arms-length negotiated contracts.
- Compensation from the university to the employee, or to the private entity, for services rendered cannot be more than normally would be paid for similar services. Where the university and an employee, as a contractor or subcontractor, or the university and the private entity provide services to a third party, a fair apportionment of the remuneration should be made and specified based on the value of their respective contribution in services, investments, technologies, equipment, or facilities utilized.
Intellectual Property and Shared Royalties
In addition to the minimum contract provisions previously mentioned, University of Louisiana System Policy FS III.VI.-1 contains provisions and requirements relating to intellectual property and shared royalties. McNeese State University has adopted this system policy as university policy. The provisions of University of Louisiana System Policy FS III.VI.-1, as they relate to this policy, shall also be followed where applicable.
Contracts and Agreements Involving the McNeese State University Foundation
Separate public not-for-profit corporations are frequently established to perform certain duties in support of the university. Among these are the tasks of accepting, buying, selling, leasing, licensing, or otherwise alienating intellectual property assigned to it by the university. When a contract, or agreement, is proposed as stipulated above except that it is between the employee and the McNeese State University Foundation or a private entity and the foundation, then for purposes of this policy it shall be deemed to be between the employee or the private entity and university for approval and review purposes. In such cases, all of the above policy essentials apply except the negotiation and the final contract execution (signing). Approved university policy and procedures must be followed within the university prior to final approval and execution. In such a case, the tasks of negotiation and final execution of the contract reside with the foundation. Nothing in this policy is intended to preempt, influence, eliminate, or diminish the due diligence responsibilities of the foundation.
Relationship to Policy on Outside Employment
Nothing in this policy shall be used to preempt, influence, eliminate, or diminish ULS policy on outside employment.
This policy is distributed via Academic Advisory Council, Senior Staff, and the University Policy page.