Academic Policies

AC80 Outside Business Activities and Private Consulting (Formerly HR80)

Policy Status: 


Policy Steward: 

Vice Provost for Faculty Affairs

AC80 OUTSIDE BUSINESS ACTIVITIES and PRIVATE CONSULTING (formerly Private Consulting Practice)




  • Purpose
  • Definitions
  • Policy
  • Required Prior Approval
  • Required Annual Reporting
  • Responsibility for Outside Business Activities
  • Use of University Facilities and Resources
  • Involvement of Students and Staff
  • Management and Oversight
  • Noncompliance
  • Compensation, Tax Consequences, and Legal Advice
  • Internal Consulting and Contracting
  • Intellectual Property
  • Cross References



This Policy has two principal purposes. The first is to outline the rules under which Outside Business Activities, such as Private Consulting, can be engaged by University faculty during their respective Appointment Periods. The second is to provide a basis for reporting Outside Business Activities of faculty to the University.

This Policy is not intended to discourage Outside Business Activities but aspires to ensure that all such activities do not conflict or materially interfere with any faculty member’s appointment with the University, with reference to the University’s mission. The University affirms its commitment to academic freedom as set forth in Policy AC64, Academic Freedom and to its mission of creating new knowledge and of effectively communicating accumulated knowledge and understanding to students and to the community at large. The University recognizes that faculty members are citizens, members of learned professions, and representatives of the University.  The University encourages its employees to engage in outside activities when such activities enhance the mission of the University and do not compete with the University.   

This Policy does not apply to Part-time Academic faculty (see Policy HR06, Types of Appointments), staff, or graduate students.  University staff are expected to follow all University Human Resource policies concerning time worked and time reporting applicable to staff.  Permission to engage in Outside Business Activities by staff and how those hours are accounted for is at the discretion of his/her supervisor and not subject to this Policy.  Engaging in Outside Business Activities by students and post-doctoral scholars or fellows is at the discretion of his/her supervisor or academic program and must comply with all applicable University policies related to his/her University appointment, employment, or contractual agreement.


Appointment Period: A faculty member’s academic appointment period (usually either 36 weeks or 48 weeks), including sabbaticals, paid leave from the University, and periods covered by supplemental University appointments, e.g., twelve-week summer appointment, constitute the Appointment Period. The time limits in this policy apply to Outside Business Activities that occur during the Appointment Period. All other provisions of this policy, as well as related policies, apply regardless of the appointment period, e.g., Use of Facilities and Resources, Involvement of Students (see Policy RP06, Disclosure and Management of Significant Financial Interests and Policy HR91, Conflict of Interest).  This Policy does not otherwise limit or constrain the application of other University rules and policies.

Outside Business Activities: Outside Business Activities are defined as entrepreneurial or professional services, paid or unpaid, that are in the general area of expertise for which the faculty member is employed by the University, but are beyond the scope of the individual's University employment responsibilities.  A faculty member's area of expertise shall be as defined by his/her department or unit head and/or Dean or cognizant Administrative Officer. Common Outside Business Activities include, but are not limited to, the activities defined below:

  • Private Consulting: One type of Outside Business Activity that is intended to further the interests of a third party entity or person.


  • Teaching for an Entity other than the University: This instruction is defined as a form of Outside Business Activity which includes teaching engagements for semester or equivalent length courses at a post-secondary institution of higher education other than the University. 

Starting a Company:  Starting a company is defined as filing or having filed the appropriate articles of organization or articles of incorporation with a government authority or otherwise forming or founding a legal entity as a business concern.  The company does not have to be active or operational to fall under this policy.  The company may be a for-profit or a not-for-profit organization. A company includes any corporation, LLC, LP, LLP, LLLP, or GP.  

Activities Not Subject to this Policy

Certain activities are expected of a faculty member as part of his or her normal scholarly activities and are not considered Outside Business Activities, as defined by this Policy (it does not matter whether a faculty member is paid to do them by a person or entity other than the University).  The following are examples of activities that do not count toward the hourly limitations for Outside Business Activities and do not require disclosure by faculty:   

  • Peer review of articles;
  • Peer review of grant proposals;
  • Presentations at professional meetings or other similar gatherings;
  • Leadership positions in professional societies;
  • Preparation of scholarly publications;
  • Unpaid (i.e. neither cash nor in-kind compensation) scholarly collaboration at another institution of higher education (Note: for faculty receiving federal funding, be sure to comply with policy RA20, Proposal Submission);
  • Editorial services for educational or professional organizations;
  • Service on advisory committees or evaluation panels for governmental funding agencies, nonprofit foundations, or educational organizations;
  • Service with accreditation agencies;
  • Conducting workshops for professional societies; or
  • Musical and other creative performances and exhibitions, if there is an expectation in the faculty member's discipline that he/she will engage in such performances or exhibitions.

*Note that related policies, in particular Policy RP06, Disclosure and Management of Significant Financial Interests, may still require disclosure of these activities if the compensation received is $5,000 or more in a twelve-month period.


As outlined below, a faculty member may engage in Outside Business Activities up to an equivalent of forty (40) hours per month throughout the duration of his/her appointment period. Thus, faculty with a thirty-six (36) week appointment may engage in Outside Business Activities for a maximum of forty (40) hours per month for the 36 weeks of his/her appointment period, but no more than 360 hours total during that 36 week period; and, faculty with a forty-eight (48) week appointment may consult for a maximum of forty (40) hours per month for the 48 weeks of his/her appointment period, but no more than 480 hours total during that 48 week period. 

Any Outside Business Activities engaged in by faculty:

  1. Shall not interfere with the performance of his/her University duties or other contractual obligations to the University (including non-classroom and non-research responsibilities expected of all faculty members);
  2. Should strive to be consistent with his/her professional stature or academic proficiency;
  3. Shall not adversely affect the University's interests or mission or violate this Policy or any other University policies or regulations including, but not limited to, policies or regulations related to intellectual property, conflict of interest, use of University's name, logo, letterhead, or other resources, etc.;
  4. Shall require prior approval as outlined below ("Required Prior Approval") if it exceeds the monthly time limits;
  5. Shall not involve routing remuneration for such services to the University or any University account (e.g., a gift account), unless it is considered to be within the scope of employment, e.g. College of Medicine faculty who are asked to serve as expert or fact witnesses in their role as Hershey Medical Center physicians (Policy L-24HAM).

Related Policies. Outside Business Activities may create the potential for or perceptions of a conflict of interest between the faculty member's individual financial interests created by the Outside Business Activity and his/her related University research. In addition to any prior approval required by this Policy, such potential or perceived conflicts may need to be disclosed and properly managed or eliminated prior to engaging in the Outside Business Activity, in accordance with Policy RP06, Disclosure and Management of Significant Financial Interests. Outside Business Activities, regardless of whether such activities occur during or outside a faculty member’s Appointment Period, may also need to be disclosed as per the requirements of policy RA20, Proposal Submission.

Additionally, a faculty member may not provide special service to the Commonwealth for additional compensation without prior written approval of the President of the University. Please see Policy HR42 Payment of Personal Compensation by a State Agency or Department of the Commonwealth for more information on this topic.


A faculty member must request and obtain prior written approval from his/her department head or unit head prior to engaging in the following Outside Business Activities:

  • Exceeding the monthly or annual time limits defined above;
  • Involving undergraduate or graduate students, or University staff, in Outside Business Activities;
  • Starting a Company;
  • Teaching for an Entity other than the University during the Appointment Period;
  • Assuming an executive or management position for a third party entity (e.g., as President, Chief Scientific Officer, etc.).

Such requests are made by submitting an Outside Business Activities Request form. Department heads and unit heads shall review all Outside Business Activities Requests for approval to ensure the proposed Outside Business Activities do not violate this Policy and are appropriate in relation to the performance of the faculty member's regular University duties. Department heads and unit heads may request and require additional information or clarification from the faculty member regarding the proposed Outside Business Activities if such information or clarification is deemed necessary in order to make a decision to approve or disapprove the request.

In extraordinary circumstances, with an articulated University need, the Dean may request permission from the Provost for a faculty member to exceed the annual hours limit set forth in this policy. Outside commitments requiring extensive time may require a leave of absence pursuant to Policy HR16, Leave of Absence without Salary, and should be discussed and decided upon with the faculty member’s department/unit head or another cognizant University administrator. Leaves of absence are not governed by this policy.

The Office for Research Protections will serve as a policy guidance resource to faculty, department heads, and Colleges and will help to promote consistency in the prior approval and annual reporting process across the University.

Approval for Outside Business Activities shall not be unreasonably withheld. Where a department or unit head declines to approve a request, the faculty member may request a written explanation, outlining 1) the reason for denying the request, 2) the specific provision(s) of this policy potentially violated by the activity 3) a description for how the Outside Business Activity will have an adverse impact on the faculty member’s teaching, research, or service responsibilities to the University.

Appeals Process. Any faculty member may appeal any action or decision taken under this policy to the University Faculty Senate Faculty Rights and Responsibility Committee.


All faculty are required to report annually all Outside Business Activities according to the procedures developed by the Office for Research Protections.

Reports on Outside Business Activities shall be available annually to department heads, chancellors, deans, and the Provost. Reports may be shared, as needed, with other University offices or officials, and as required by applicable federal, state, or local rules, laws or regulations.

Examples of Outside Business Activities which require annual disclosure in an electronic compliance system, but do not require prior approval from a department or unit head when practiced within the monthly or annual time limits defined above, include (but are not limited to) the following:

  • Private Consulting;
  • Serving as an expert witness;
  • Practicing a licensed profession, (e.g., veterinarian, architect, nurse, attorney);
  • Teaching for an Entity other than the University outside of the Appointment Period;
  • Outside Business Activities for a third party entity in which the faculty member holds non-public equity;
  • Becoming an employee of a company or other third party entity; Serving on a board of directors outside of the University.

*Note: The above may require prior approval or further review under another policy. See e.g., AD77, RP06


A faculty member is solely responsible for his or her Outside Business Activities. The University assumes no responsibility for Outside Business Activities performed by members of its faculty. The name of the University is not in any way to be connected with the service rendered or the results obtained. The faculty member must make it clear that his or her Outside Business Activities are a personal matter. A faculty member shall not accept or retain employment which would bring him or her as an expert or in any other capacity, into material conflict or in competition with the interests and purposes of the University (See Policy AD07 Use of University name, Symbols and/or Graphic Devices).


Policy FN14 Use of University Tangible Assets, Equipment, Supplies and Services prohibits the use of University facilities and resources including but not limited to specialized equipment, specialized software, supplies and services for Outside Business Activities. Faculty may access University facilities for Outside Business Activities in the same manner available to non-University personnel, with a written agreement executed through the appropriate channels. Faculty may not use the University’s name, logo, letterhead, or email in their Outside Business Activities.


Decisions about whether to involve students and staff in a faculty member’s Outside Business Activities should be guided by determining whether the proposed activities best serve the interests of the students and staff. Faculty cannot require students or staff to become involved in Outside Business Activities . Faculty may hire students or staff to assist with faculty Outside Business Activities outside the scope of the student's or staff member's University duties with appropriate approval. Such arrangements require the full knowledge and prior approval of 1) the faculty's department head or unit head, and 2) the student's faculty advisor or dean of undergraduate or graduate education and/or 3) the staff member's direct supervisor. Staff participation in Outside Business Activities may not take place during University work hours. There is a section on the Outside Business Activities Request form to request and document the required approval related to staff and students. Safeguards must be instituted on a case-by-case basis to ensure that the performance of University duties and the scholarly mission of the University are not compromised. In particular, faculty must avoid even the appearance of directing students into research activities or Outside Business Activities that primarily serve their own personal interests at the expense of the students’ educational or scholarly interests and needs. Such arrangements with students may also require review and approval by the University's Individual Conflict of Interest Committee pursuant to the requirements outlined in Policy RP06, Disclosure and Management of Significant Financial Interests.


In some situations, a plan for managing a faculty member’s Outside Business Activities, insofar as they interact with, or relate to, the faculty member’s University duties, may be developed by the relevant department head, dean, and/or Office for Research Protections, in collaboration with the faculty member.


Any non-compliance with this Policy, including but not limited to a faculty member’s failure to obtain prior approval when required, or exceeding the time limits outlined above, shall be referred to the relevant department/unit head, dean or next highest level of authority, and the Provost, by the Office for Research Protections.  Said University Administrators may consult with the Office for Research Protections to best determine any corrective or disciplinary actions to implement due to non-compliance with this Policy and shall be managed in accordance with all other applicable University policies and procedures.  It is understood that de minimis failures of compliance shall in ordinary course be subject to correction but not discipline. Intentional or significant noncompliance, however, shall be treated as a serious matter meriting discipline appropriate to the circumstances.  


The University cannot comment on or offer input regarding the rate of compensation or the tax consequences associated with Outside Business Activities.  The University will not provide legal advice on the terms of any Outside Business Activities or any disputes arising therefrom.


University faculty cannot serve as paid consultants and/or contractors for University activities, either directly as private consultants, or through a third-party (for guidance, see Policy BS17, Use and Procurement of External Consultants). In situations where extra services are required from current employees, compensation must be as an employee, whether within the scope of their appointment or through supplemental compensation.


All faculty are required to sign the Penn State Intellectual Property Agreement which states that all faculty agree as a condition of employment by the University to abide by the University's Intellectual Property Policies and Procedures. It is possible, in certain circumstances, to assign Intellectual Property to outside entities, with advance written agreement through the Office of Technology Management.


AC64- Academic Freedom;

AD07- Use of University Name, Symbols, and/or Graphic Devices;

AD77 - Engaging in Outside Professional Activities (Conflict of Commitment);

BS17 – Use and Procurement of External Consultants;

FN14 - Use of University Tangible Assets, Equipment, Supplies and Services;

HR42 - Payment of Personal Compensation by a State Agency or Department of the Commonwealth;

HR91 - Conflict of Interest;

HR06 – Types of Appointments;

RA20 – Proposal Submission;

RP06 – Disclosure and Management of Significant Financial Interests;

Date Approved: 

September 4, 2018

Date Published: 

September 4, 2018

Effective Date: 

September 4, 2018