Traditional Publishing, Non-Compete Clauses & Rights Grabs

Great article. Thanks for the pointer!

 

Interesting read. Odd though. I have never seen a contract with a non-compete clause, and I have seen a number in the last couple of weeks.

For someone with a good list of awards she makes crap money.

 

Then you are extremely fortunate. This is the kind of thing that debut, mid-list and even lower end best-sellers encounter very frequently.

 

Hmm, after doing a brief scan of some cases and secondary sources I have to say that the non-compete agreements might actually be enforceable. However, I want to put a huge caveat on this to note that it depends on the state's law that governs the contract. I note that the author of the post links to the IRS page as determinative that a non-compete makes the author an employer but that is simply not the case. This would be used as a single factor in a multi-factor test. Which means that it's just a piece of "evidence" to look for.

Generally, a non-compete agreement needs to be reasonable as far as time, place, and scope. I think an argument could be made that a year before and after publication is reasonable. I have no idea about place. It could be the whole of NA, or just the US, but to be honest, that would require more digging than I have time for. The biggest issue would be scope. Obviously the more narrow the better for the author, but also the easier for the publisher to win on. I would imagine, and I am just speculating here, that stopping an author from producing any work of fiction would be unreasonable, stopping an author from writing in a "genre" may still be unreasonable. But, stopping an author from writing a novel in the same world or about the same events? Well, that actually might be reasonable. This is all pretty general mind you and just after skimming a couple of cases and some secondary sources. But, it does seem that a covenant not to compete could be enforceable depending on the things mentioned above. All I know is that I would fight tooth and nail to remove one of these agreements or, at least, get it down to not writing in the same world with the same characters.

 

I have a question about writing contracts. Do they usually have a choice of law provision and are companies willing to negotiate on that point. And I agree with you that being an employee would screw a writer in ways we really couldn't imagine.

 

I think we established why no one has ever taken this to court. It seems like one giant PITA that an author can't afford, going through these various legal doctrines.

 

Hi,

Interesting. Yes non-competes are industry standard as I understand it. But I haven't heard of any of them going as far as she suggests. My understanding is that they will prevent an author from publishing a similar or conected work for a period of time. Not any other novel as she suggests. However the clauses vary.

One thing I would suggest. If you do go trade and get an offer, get an agent too. One you can trust to be in your corner.

Another thought is for indies like me who have a few books out and want to keep writing. Protectyour income stream. I have one book sitting on my machine waiting for either an editor or an agent - I haven't decided which. But if I do decide to try my hand at getting a trade deal for it, I'll be strict about the non-compete. I don't care about the advances. I earn enough from my indie publishing. But I cannot afford to have my indie income threatened by a clause. Kameron says be prepared to walk away. I second that.

Cheers, Greg.

 

One should always be prepared to walk away in any negotiation.

 

Well, it depends on where the contracts are coming from. I've yet to see a big-five contract that DOESN'T have a non-compete. And...what's more. I've had meals with several authors who have told me, "I don't have a non-compete" - when I know full well that they do because we are published by the same publisher. So I tell them to go home and look at paragraph #16 - and get back to me. Their response, "Well, look at that...I had no idea it was there. Why didn't my agent mention it?"

The reason...they are "industry standard" and the agent can't get them out. And they get paid if you sign the contract, but earn nothing if you don't. Yes, a non-compete can be defanged - I know, I've done it twice now and it's (a) not easy and (b) not quick. Took over six months for each one - and during most of the proceedings we were inches from not signing over the issue. I was able to get my first contract nicely defanged...my current contract has a TERRIBLE non-compete. One I'm actually kind of sick about signing. But at the end of the day, the other things I got from the contract made it worth doing...and I have to console myself that I'm limited for a relatively short period of time. That makes it a bit easier to stomach - but not by much.

 

I think you'd be surprised just how many authors with a good number of book and awards are making "crap money." I actually earn well, but that's the exception not the rule and I would like to see that dynamic shift.

 

Indeed, and that's just a terrible state of affairs.

 

I don't agree...the contracts for the big-five are all written such that they are governed by the laws of New York, and New York has right to work legislation.

Exactly...but the first contract I was offered had a non-compete that was written to be in enforce for the "term of the contract" and the term the contract was "life of copyright" - I don't think any judge would say that until the author's death + 70 years is a reasonable amount of time ;-)

I don't think keeping someone from publishing for two whole years is reasonable...Do you think it is reasonable for your employer to tell you you can't take a second job to make ends meet for 2 years? Will your bank decrease your mortgage payment for two years? I negotiated my first contract such that I couldn't publish for 3 months to either side of a publication date - that's six months "off the market" - and THAT I do think is reasonable - although I would be happier with four months.

But...That's even that's not what we are talking about in most cases. The non-compete I have with my current contract is while they are rolling out the books they've signed. I've signed 4 books with them, and "in theory" they could take as much as two years after I deliver each one. This could mean a decade where I'm cut off from publishing other works. Now, I have some changes to that contract so that I can do "some" things during that time. But the work I make my bread and butter on "could" be adversely affected -- and my fans left waiting for more. Now, I don't think they would draw out the books to their maximum time - but if they started to....you can be sure I'd take it to court.

Bottom line - a contract should be for the book being signed - and what the author does with their time outside the confines of that contract should be their businesses. And if they need money, they make it by writing and shouldn't have to take a "different" job to make ends meet.

I have no idea about place. It could be the whole of NA, or just the US, but to be honest, that would require more digging than I have time for. The biggest issue would be scope. Obviously the more narrow the better for the author, but also the easier for the publisher to win on. I would imagine, and I am just speculating here, that stopping an author from producing any work of fiction would be unreasonable, stopping an author from writing in a "genre" may still be unreasonable. But, stopping an author from writing a novel in the same world or about the same events? Well, that actually might be reasonable. This is all pretty general mind you and just after skimming a couple of cases and some secondary sources. But, it does seem that a covenant not to compete could be enforceable depending on the things mentioned above. All I know is that I would fight tooth and nail to remove one of these agreements or, at least, get it down to not writing in the same world with the same characters.[/QUOTE]

 

A couple of comments should be made in this regard.

The first is that just because the contract is with the same publisher does not mean it contains the same terms, not even within the same imprint. A good agent, or a writer in a better position can produce a completely different contract than a weak agent or an author in a weak position. For instance some writers in the same imprint are on the four payment schedule while others are on the two or three. There are few clauses that a publisher will stand by if a valuable author with a strong agent is willing to push back.

While there is a suggestion that publishers have standard contract terms, the reverse is also true for agents and agencies. Some agencies are known to have strict policies on what terms they will allow their writers to sign and deliver their clients far better terms that agents who are known to be less flexible. For instance Writer's House (for example purposes only) is known to be fierce in their representation of clients and do not allow their writers to sign contracts with terms they object to, and have many standard clauses that they insist be put into the contract. It sometimes slows the process but the results appear to be worth it.

Sorry to hear about your current contract. Hopefully the next one will be better.

 

To me, a situation where someone who wins literary awards but makes poor money is likely a very fine writer who is a poor business person or with an ineffective agent.

 

If I were to tell the fans of the Riyria books they couldn't get another Royce and Hadrian book for a decade, I don't think they would consider that reasonable at all!

You can fight all you want - but the non-compete will not be removed - You can, and should, get it defanged. But to be honest, I think you are setting the bar MUCh too low. It's an existing world and characters that readers are paying you for, and if someone wants you to NOT produce that - then they should compensate you. Like farmers are given money NOT to plant certain crops. But to stop you from doing what produces your income without compensation? No, I can't agree to that.

 

Yes, I agree...but the same thing applies based on New York law, but just because they are not enforceable doesn't mean the publishers don't put them in the contracts. They are counting on authors not taking them to court. Since they know they'll lose, I'm guessing that if a threat of action is made, the author would get permission to publish what they want. After all, the agreement just says the publisher has to "approve" and I think they will. They DON'T want to be ruled against this. And they don't want to be forced to remove them altogether from contracts.

 

In theory...yes. In reality...no. All New York publishers will insist that the contract is governed by he Laws of New York. I've talked to several who have tried to get that clause of the contract changed and it's always been a "deal breaker" for the publisher.