Life sciences and other technology startups often rely on a mix of employees and independent consultants during the early stages of growth. When these relationships are not defined in writing, the lines between employment and consulting services can blur, exposing the company to tax liabilities, disputes over intellectual property (“IP”) ownership and investor concerns during due diligence.
Our law firm drafts and negotiates employment agreements and consulting contracts that define duties, secure key IP and comply with applicable State laws. Crowley Law LLC helps startups formalize clear, enforceable relationships with the people who build their business.
An employment agreement and a consulting agreement define how your startup works with the people building it. They establish the boundaries, responsibilities and protections that govern each relationship.
Misclassifying an employee as an independent contractor is not an error you can fix after the fact. Once it happens, it opens your company to:
A well-drafted consulting agreement helps document the independent nature of the engagement, capturing indicators such as business independence, control over methods and tools and the ability to serve multiple clients.
An employment agreement, by contrast, formalizes an integrated working relationship where the company controls scope, hours and performance expectations. Together, these agreements define clear legal boundaries and help protect your company from compliance and classification risks.
For employees, U.S. law generally provides that anything created within the scope of employment is automatically owned by the employer under the employment agreement. This concept comes from the work-for-hire doctrine under U.S. copyright law and is reinforced by most State employment statutes.
That said, “automatic” ownership only applies if the work is part of the employee’s normal duties and done using company resources or during work hours. Most startups still require employees to sign IP assignment agreements and confidentiality agreements, even though they’re covered by employment law. These documents:
By contrast, consultants, contractors and other non-employees are not covered by the “work made for hire” doctrine unless very specific conditions are met (e.g., they create a work that fits into a narrow statutory category and a written agreement says it’s work for hire).
Unless your consulting agreement specifically assigns ownership, the consultant may legally own what they create.
To avoid that, your consulting contract should clearly define who owns what and how IP and confidentiality are handled, including:
Employment and consulting agreements also outline how work begins, how it’s measured and how it ends. These contracts make both the company and the person doing the work clear on the expectations of the engagement.
Most agreements cover practical details such as:
When drafted well, these provisions make engagements predictable and legally sound.
Clear, well-documented agreements signal control. Investors, auditors and potential acquirers look for consistent employment and consulting contracts as part of due diligence because they show that the company manages its relationships and IP under enforceable terms. Missing or inconsistent agreements raise questions about ownership of key assets, unrecorded liabilities and exposure under employment and tax laws.
Strong documentation also supports good corporate governance. Employment and consulting agreements provide the paper trail regulators expect to see when reviewing wage compliance, equity grants or independent contractor classifications. They help prove that the company applied proper legal standards, disclosed risks and maintained a compliant human resources framework.
Crowley Law LLC has more than three decades of experience helping life sciences and other technology founders draft, review and negotiate employment and consulting agreements that withstand due diligence and protect company IP. Each contract is tailored to the company’s growth stage, investor expectations and compliance requirements under State and Federal law.
Our services include:
We help founders structure compensation, benefits, termination provisions and restrictive covenants in a way that protects the company while remaining compliant with applicable employment laws.
We help founders prepare and negotiate consulting agreements that properly define scope, deliverables and payment schedules while using contractor language that aligns with Internal Revenue Service (“IRS”) and Department of Labor standards.
We embed clear invention-assignment and confidentiality provisions into every employment agreement and consulting contract to protect the company’s IP ownership from day one.
We draft enforceable nonsolicitation clauses that protect your company’s business interests while staying within State and Federal limits. These provisions restrict departing employees and independent contractors from soliciting your clients or recruiting team members.
We advise startups on classification audits, onboarding systems and consulting agreement templates that reduce long-term legal risk. Our firm helps founders identify and correct misclassification issues involving employees, consultants and independent contractors before they draw scrutiny from tax authorities or investors.
If your startup relies on employees or independent contractors without written agreements, now is the time to formalize those relationships before compliance issues arise. Our employment and consulting agreement lawyers help founders prepare contracts that define scope, clarify IP ownership and meet State and Federal standards.
Whether you need tailored employment agreements, consulting contracts or a consulting agreement template for recurring projects, our attorneys can help you protect your company’s interests and satisfy investor expectations through clear, enforceable documentation.
An employment agreement governs a formal employer–employee relationship, covering compensation, benefits and IP created during employment.
A consulting agreement applies when a consultant or independent contractor provides services to your company while retaining control over how and when the work is completed. Using the right contract protects against tax and compliance risks tied to worker misclassification.
Every company that hires employees, consultants or independent contractors should have written agreements from the moment work begins. Delaying formal documentation can create ownership uncertainty, payment disputes or classification issues that affect due diligence and investor confidence.
Employees work under company supervision and use company tools or facilities, while independent contractors or consultants typically serve multiple clients and control their own methods. The IRS and Department of Labor use these indicators, among others, to determine classification and missteps can lead to back taxes, benefits liability and penalties.
Both types of agreements can include invention assignment and confidentiality clauses. These provisions make sure that IP ownership stays with your company and that consultants or employees cannot use or disclose confidential information after their engagement or employment ends.
The foregoing analysis is for educational purposes only and does not constitute legal advice. You should engage an experienced lawyer to help you deal with any issues of this type as they apply in your unique situation.
