<PAGE>

                                                                  Exhibit 10.38

[Company Letterhead]
--------------------


                         MANAGEMENT EMPLOYMENT AGREEMENT

The following agreement is hereby entered into between, Joseph Esposito
(hereinafter known as Employee) and eResearchTechnology, Inc. (together with its
affiliated corporations hereinafter known as the "Company") and having its
principal offices at 30 S. 17th Street, Philadelphia, PA 19103.

1.       DUTIES AND RESPONSIBILITIES

         Employee agrees to hold the position of President and Chief Executive
         Officer and shall be directly responsible to Board of Directors.

2.       BEST EFFORTS

         Employee agrees to devote his best efforts to his employment with the
         Company, on a full-time (no less than 40 hours/week) basis. He further
         agrees not to use the facilities, personnel or property of the Company
         for personal or private business benefit.

3.       ETHICAL CONDUCT

         Employee will conduct himself in a professional and ethical manner at
         all times and will comply with all company policies as well as all
         State and Federal regulations and laws as they may apply to the
         services, products, and business of the Company.

4.       TERM OF THE AGREEMENT

         This agreement will be for a period of one year, commencing January 1,
         2004 and will continue from year to year unless terminated.

5.       COMPENSATION

         a.       Salary shall be $330,000/year payable in equal installments as
                  per the company's payroll policy. Salary shall be considered
                  on an annual basis and adjusted based on performance.

         b.       Annual incentive bonus shall be determined by the Company's
                  Compensation Committee of its Board of Directors and shall be
                  based on performance.

                                       1
<PAGE>


         c.       Benefits shall be the standard benefits of the Company as they
                  shall exist from time to time with the exception of vacation,
                  which will be five weeks.

         d.       Car Allowance of $900/month.

6.       NON-DISCLOSURE

         Employee acknowledges that employment with the Company requires him/her
         to have access to confidential information and material belonging to
         the Company, including customer lists, contracts, proposals, operating
         procedures, trade secrets and business methods and systems, which have
         been developed at great expense by the Company and which Employee
         recognizes to be unique assets of the Company's business. Upon
         termination of employment for any reason, Employee agrees to return to
         the Company any such confidential information and material in his
         possession with no copies thereof retained. Employee further agrees,
         whether during employment with the Company or any time after the
         termination thereof (regardless of the reason for such termination), he
         will not disclose nor use in any manner, any confidential or
         proprietary material relating to the business, operations, or prospects
         of the Company except as authorized in writing by the Company or
         required during the performance of his duties.

7.       BUSINESS INTERFERENCE; NONCOMPETITION

         a.       During employment with the Company and for a period of one
                  year (the "Restrictive Period") thereafter (regardless of the
                  reason for termination) Employee agrees he will not, directly
                  or indirectly, in any way for his own account, as employee,
                  stockholder, partner, or otherwise, or for the account of any
                  other person, corporation, or entity: (i) request or cause any
                  of the Company's suppliers, customers or vendors to cancel or
                  terminate any existing or continuing business relationship
                  with the Company; (ii) solicit, entice, persuade, induce,
                  request or otherwise cause any employee, officer or agent of
                  the Company to refrain from rendering services to the Company
                  or to terminate his or her relationship, contractual or
                  otherwise, with the Company; or (iii) induce or attempt to
                  influence any customer or vendor to cease or refrain from
                  doing business or to decline to do business with the Company
                  or any of its affiliated distributors or vendors.

         b.       The Employee agrees that, during the Restrictive Period, the
                  Employee will not, directly or indirectly, accept employment
                  with, provide services to or consult with, or establish or
                  acquire any interest in, any business, firm, person,
                  partnership, corporation or other entity which engages in any
                  business or activity that is the same as or competitive with
                  the business conducted by the Company in any state of the
                  United States of America and in any foreign country in which
                  any customer to whom the Company is providing services or
                  technology is located.



                                       2
<PAGE>

8. FORFEITURE FOR BREACH; INJUNCTIVE RELIEF.

         a.       Any breach of the covenants made in Sections 6 and 7 hereof
                  shall result in the forfeiture of the Employee's right to any
                  and all payments which may be required to be made under this
                  Agreement following such breach and shall relieve the Company
                  of any obligation to make such payments.

         b.       The Employee acknowledges that his compliance with the
                  covenants in Sections 6 and 7 hereof is necessary to protect
                  the good will and other proprietary interests of the Company
                  and that, in the event of any violation by the Employee of the
                  provisions of Section 6 or 7 hereof, the Company will sustain
                  serious, irreparable and substantial harm to its business, the
                  extent of which will be difficult to determine and impossible
                  to remedy by an action at law for money damages. Accordingly,
                  the Employee agrees that, in the event of such violation or
                  threatened violation by the Employee, the Company shall be
                  entitle to an injunction before trial from any court of
                  competent jurisdiction as a matter of course and upon the
                  posting of not more than a nominal bond in addition to all
                  such other legal and equitable remedies as may be available to
                  the Company.

         c.       The rights and remedies of the Company as provided in this
                  Section 8 shall be cumulative and concurrent and may be
                  pursued separately, successively or together against Employee,
                  at the sole discretion of the Company, and may be exercised as
                  often as occasion therefor shall arise. The failure to
                  exercise any right or remedy shall in no event be construed as
                  a waiver or release thereof.

         d.       The Employee agrees to reimburse the Company for any expenses
                  incurred by it in enforcing the provisions of Sections 6 and 7
                  hereof if the Company prevails in that enforcement.

9.       INVENTIONS

         Employee agrees to promptly disclose to the Company each discovery,
         improvement, or invention conceived, made, or reduced to practice
         (whether during working hours or otherwise) during the term of
         employment. Employee agrees to grant to the Company the entire interest
         in all of such discoveries, improvements, and inventions and to sign
         all patent/copyright applications or other documents needed to
         implement the provisions of this paragraph without additional
         consideration. Employee further agrees that all works of authorship
         subject to statutory copyright protection developed jointly or solely,
         while employed shall be considered a work made for hire and any
         copyright thereon shall belong to the Company. Any invention,
         discovery, or improvement conceived, made, or disclosed, during the one
         year period following the termination of employment with the Company
         shall be deemed to have been made, conceived, or discovered during
         employment with the Company.

                                       3

<PAGE>

         Employee acknowledges that the only discoveries, improvements, and
         other inventions made prior to the date hereof which have not been
         filed in the United States Patent Office are attached as Exhibit A.

10.      NO CURRENT CONFLICT

         Employee hereby assures the Company that he is not currently restricted
         by any existing employment or non-compete agreement that would conflict
         with the terms of this Agreement.

11.      TERM; TERMINATION AND TERMINATION BENEFITS

         a.       Employment is "at will" which means that either the Company or
                  Employee may terminate at any time, with or without cause or
                  good reason, upon written notice given at least ninety (90)
                  days prior to termination.

         b.       This Agreement shall terminate upon the death of the Employee.
                  In addition, if, as a result of a mental or physical condition
                  which, in the reasonable opinion of a medical doctor selected
                  by the Company's board of directors, can be expected to be
                  permanent or to be of an indefinite duration and which renders
                  the Employee unable to carry out the job responsibilities held
                  by, or the tasks assigned to, the Employee immediately prior
                  to the time the disabling condition was incurred, or which
                  entitles the Employee to receive disability payments under any
                  long-term disability insurance policy which covers the
                  Employee for which the premiums are reimbursed by the Company
                  (a "Disability"), the Employee shall have been absent from his
                  duties hereunder on a full-time basis for 120 consecutive
                  days, or 180 days during any twelve month period, and within
                  thirty (30) days after written notice (which may occur before
                  or after the end of such 120 or 180 day period), by the
                  Company to Employee of the Company's intent to terminate the
                  Employee's employment by reason of such Disability, the
                  Employee shall not have returned to the performance of his
                  duties hereunder, the Employee's employment hereunder shall,
                  without further notice, terminate at the end of said
                  thirty-day notice.

         c.       The Company may also terminate the Employee's employment under
                  this Agreement for Cause. For purposes of this Agreement the
                  Company shall have "Cause" to terminate the Employee's
                  employment if the Employee, in the reasonable judgment of the
                  Company: (i) fails to perform any reasonable directive of the
                  Company that may be given from time to time for the conduct of
                  the Company's business; (ii) materially breaches any of his
                  commitments, duties or obligations under this Agreement; (iii)
                  embezzles or converts to his own use any funds of the Company
                  or its Affiliates or any business opportunity of the Company
                  of its Affiliates; (iv) destroys or converts to his own use
                  any property of the Company or its Affiliates, without the
                  Company's consent; (v) is convicted of, or indicted for, or
                  enters a guilty plea or plea of no contest with respect to, a
                  felony; (vi) is adjudicated an incompetent; or (vii) violates
                  any federal, state, local or other law applicable to the
                  business of the Company or engages in any conduct which, in
                  the reasonable judgment of the Company, is injurious to the
                  business or interests of the Company.

                                       4
<PAGE>

         d.       Upon any termination of this Agreement, the Company shall have
                  no further obligation to Employee other than for annual salary
                  earned through the date of termination, and no severance pay
                  or other benefits of any kind shall be payable; provided,
                  however, that in the event the Company terminates this
                  Agreement other than for Cause or as a result of the death or
                  Disability of the Employee, the Employee shall receive: (i)
                  bonus based on 100% performance and prorated based on the
                  number of days worked during the year in which the
                  termination, death or Disability occurred, payable in one lump
                  sum in accordance with the Company's policy; (ii) severance
                  equal to one year's annual salary and bonus, based on 100%
                  performance, payable in one lump sum in accordance with the
                  Company's policy; (iii) continuation of Benefits (as hereafter
                  defined) for one year; and (iv) accelerated vesting of all
                  stock options granted to Employee, all of which were in effect
                  prior to the date of: (i) termination of this Agreement; (ii)
                  death; or (iii) Disability. The Company must give the Employee
                  written notice of the Employee's breach under sections
                  11.c.(i.), 11.c.(ii), and 11.c(vii) and 15 days to cure before
                  the Employee is given notice of termination as required under
                  Section 11.a.

         e.       Notwithstanding any contrary provision contained in this
                  Employment Agreement, in the event that either: (i) there is a
                  "Change of Control" (as hereafter defined) and neither the
                  Company nor the Buyer offers the Employee a position with
                  comparable responsibilities, location or compensation for the
                  Buyer, or of a division or subsidiary thereof, even though the
                  position may not be that of Chief Executive Officer of a
                  public entity; or (ii) after the first anniversary of the date
                  of the Change in Control, and for a period of twelve months
                  thereafter, the Employee's responsibilities, authority,
                  location, or compensation are not acceptable to the Employee,
                  the Employee may elect to resign and receive: (i) bonus based
                  on 100% performance and prorated based on the number of days
                  worked during the year in which the resignation occurred,
                  payable in one lump sum in accordance with the Company's
                  policy; (ii) severance equal to one year's annual salary and
                  bonus, based on 100% performance, payable in one lump sum in
                  accordance with the Company's policy; (iii) continuation of
                  Benefits (as defined below) for one year; and (iv) accelerated
                  vesting of all stock options granted to Employee, all of which
                  were in effect prior to the date of the Change of Control.

                  The Employee must provide written notice of such election not
                  less than sixty days following the date of the Change of
                  Control or, if the Employee's new position is changed within
                  the time period and in the manner described above, within
                  thirty days following such event.


                                       5
<PAGE>

                  The term "Benefits" as utilized in this Section 11, refers to
                  standard health, dental, disability, life and accident
                  insurance benefits, all of which are subject to any applicable
                  premium co-pay, and car allowance.

                  The term "Change of Control", as utilized in this Section 11,
                  refers to:

                      (i)    A change of control of a nature that would be
                             required to be reported in the Company's proxy
                             statement under the Securities Exchange Act of
                             1934, as amended;

                      (ii)   The approval by the Board of Directors of a sale,
                             not in the ordinary course of business, of all or
                             substantially all of the Company's assets and
                             business to an unrelated third party and the
                             consummation of such transaction; or

                      (iii)  The approval by the Board of Directors of any
                             merger, consolidation, or like business combination
                             or reorganization of the Company, the consummation
                             of which would result in the occurrence of any
                             event described in clause (i) or (ii) above, and
                             the consummation of such transaction.

Except as expressly modified and amended hereby, the Employment Agreement and
its terms and provisions are hereby ratified, confirmed and approved in all
respects.

12.      MISCELLANEOUS

         a.       This Agreement and any disputes arising herefrom shall be
                  governed by Pennsylvania law.

         b.       In the event that any provision of this Agreement is held to
                  be invalid or unenforceable for any reason, including without
                  limitation the geographic or business scope or duration
                  thereof, this Agreement shall be construed as if such
                  provision had been more narrowly drawn so as not to be invalid
                  or unenforceable.

         c.       This Agreement supersedes all prior agreements, arrangements,
                  and understandings, written or oral, relating to the subject
                  matter.

         d.       The failure of either party at any time or times to require
                  performance of any provision hereof shall in no way affect the
                  right at a later time to enforce the same. No waiver by either
                  party of any condition or of the breach by the other of any
                  term or covenant contained in this Agreement shall be
                  effective unless in writing and signed by the aggrieved party.
                  A waiver by a party hereto in any one or more instances shall
                  not be deemed or construed as a further or continuing waiver
                  of any such condition or breach or a waiver of any other
                  condition, or of the breach of any other term or covenant set
                  forth in this Agreement.

                                       6
<PAGE>

         e.       Any notice required or permitted to be given under this
                  Agreement shall be in writing and shall be deemed to have been
                  given when delivered in person, sent by certified mail,
                  postage prepaid, or delivered by a nationally recognized
                  overnight delivery service addressed, if to the Company at 30
                  S. 17th Street, 8th Floor, Philadelphia, PA 19103 Attn:
                  President and if to the Employee, at the address of his
                  personal residence as maintained in the Company's records.

For Employee:                         For the Company:


       Joseph Esposito                       Bruce Johnson
-----------------------------         -------------------------------
Name:  Joseph Esposito                Name:  Bruce Johnson, CFO

Date:    3/4/04                       Date:     3/4/04
     ------------------------               -------------------------