Can authors compete with 'non-competes'?

Can authors compete with 'non-competes'?

'An unacceptable restriction on authors’ livelihoods'

No publisher would agree, at an author’s request, to forgo publishing another author’s book on a particular subject. So why should an author assume a similar obligation? But it happens all the time. 

Of all the contract-reform issues being discussed today around publishing and its contracts with authors, the non-compete clause is among the most bitterly derided.

And the "non-compete," as the clause is called, is the focus of the fourth white paper in the Authors Guild's Fair Contract Initiative series of articles outlining author contract reform.

From that paper: 

Authors are routinely asked to agree not to publish other works that might “directly compete with” the book under contract or “be likely to injure its sale or the merchandising of other rights.” Even more broadly, they may be asked not to “publish or authorize the publication of any material based on the Work or any material in the Work or any other work of such a nature such that it is likely to compete with the Work.”

In digital publishing, the non-compete falls with particularly bizarre force on the author who traditionally publishes, let's say, a strong science-fiction title. The author then decides that he or she might be able to support sales of that good-looking sci-fi novel with a series of self-published Kindle Singles, each with ancillary background material on one of the characters or settings in the main book. 

You'd think a publisher would be delighted, right? Not always. In fact, to hear authors talk about it, hardly ever does a publisher seem to understand the benefit of supplementary self-published work, and the non-compete clause is how the house may try to forestall that supplementary work. The Guild has other examples of instances in which these clause can have peculiar and painful effects:

  • A fiction writer who developed characters for use in multiple works was prevented from using those characters in other books. An author specializing in true crime was prevented from developing a book about a different crime with a different publisher.
  • A non-fiction writer looking to put out a revised edition accounting for newly-discovered facts was prevented from doing so because the publisher didn’t want to deal with the expense; even so, the publisher wouldn’t let the author publish a revised edition anywhere else. (Another reason, incidentally, why we think book contracts should not last forever.)
  • And at least one publisher has even specified that a novelist may not publish another work of fiction on any subject until six months after the work under contract is released—a stunning limitation that could restrict the author’s ability to release new works either with other publishers or independently, potentially taking the author out of the marketplace for several years.

We want to know what you think of the non-compete today in our #FutureChat. Don't be shy. Wherever you sit on the publishing landscape — author, agent, publisher, editor, reader, designer, bookseller, Authors Guild member, Society of Authors member, Alliance of Independent Authors member, cheese sandwich maker to the writing studio down the street — you're most welcome to join us and you'll be competing only with our constructive, energetic weekly exchange of ideas to put your points across. Consider joining us.


This story was written as the walkup to our #FutureChat of 28 August 2015. Join us each Friday live on Twitter at 4:00 p.m. London (BST), 3:00 p.m. GMT, 5:00 p.m. Rome (CEST), 11:00 a.m. New York (ET), 10:00 a.m. Chicago (CT), 9:00 a.m. Denver (MT), 8:00 a.m. Los Angeles (PT), 5:00 a.m. Honolulu (HAST).


'My gob was smacked'

I say this in love. Truly. I love traditional publishing and want it to survive. But contracts that contain clauses like this one are not going to aid the old cause.

That's frequent #FutureChat participant James Scott Bell, longtime novelist, how-to-write-a-book-book specialist, and attorney, writing a year ago about a non-compete clause he was shown in a friend's contract. Bell writes, "My gob, as they say, was smacked." What he relates is chilling:

Due to confidentiality I am not at liberty to reproduce the text verbatim, but I can give you the gist:
The clause prohibits the author from publishing “material” that is “similar” to the Work. So what if your crime novel is coming out from Publisher, and you want to self-publish a mystery short story? Or sell it to Alfred Hitchcock’s Mystery Magazine?
Too bad. Because a short story is “material.” And a mystery usually has a crime in it, so it’s “similar.”
Or suppose you’ve had the foresight to reserve audio rights. You have a mellifluous voice, and spend twenty hours recording the audio version of your book for ACX, Amazon’s platform for indie audio works.
No go, because the clause in question prohibits the author from “exploiting” any reserved rights that may “conflict” with sale of the book. And who gets to decide if there is such a conflict? Not you.
And there isn’t even language in the clause suggesting the author might seek the “prior written consent” of Publisher! Message: Don’t even ask, dude.
 

And did we mention time limits?

There is no time limit (though the overall agreement is for “life of copyright.”) Which leads me to believe that the wet-behind-the-ears law grad who drafted this needs to be flogged with a hardcover copy of Calamari and Perillo on Contracts. This clause is clearly unenforceable without a time limit. Courts will not allow a company to tie up someone’s economic future ad infinitum.
But the burden of challenging the clause is, of course, on the author. Or, should the author go ahead and publish a work the publisher deems to be “competing,” the publisher may task some associate at their retained law firm to put down his coffee and make life difficult for the author.
 

Bell, by the way, does not question the publisher's need for some protection:

The standard non-compete was to keep John Grisham from publishing The Firm with one publisher and The Pelican Brief with another, and having them both come out at the same time...
Here’s another reason publishers need the clause. Suppose Publisher is coming out with your debut thriller, and pricing it as a $14.99 trade paperback, and a $9.99 ebook. But, at the same time, you bring out a self-published thriller and price it at $3.99 in digital and the same $14.99 in POD. And then you unleash your social media marketing efforts to emphasize the book that’s brining you more money per unit (i.e., your self-pubbed effort).
That’s not cricket. You are hurting Publisher’s investment in you. That’s why the non-compete clause exists.

But, Bell concludes, that was then, this is now, and authors are being hurt in the most assiduously applied non-compete language:

What is a fair non-compete clause?

Bell has that for you:

Very simple: a time-limited clause that specifically defines the type of material covered. For example:
"For one year from the date of publication of the Work, Author will not publish or authorize to be published, in either print or digital media, any work greater than thirty-thousand words in the thriller, mystery or crime genres."
This leaves open the publishing of short-form work which, I might add,the publisher should encourage. This is how the writer attracts more readers, many of whom will then seek out the author’s trad-published books. It’s a classic win-win.

The Guild has its own answer:

Ideally, we’d like to see non-compete clauses completely struck from publishing agreements. But we’re willing to accept clauses that simply and straightforwardly prevent an author from publishing substantially the same book elsewhere. Going beyond that can limit the author’s right to make a living, as well as the author’s freedom of expression. That directly contravenes longstanding U.S. legal traditions that favor the rights to work and speak freely.

And the organisation agrees with Bell on time limits and nature of what's delimited by a non-compete clause:

The ways to appropriately limit a non-compete will vary, depending on the standard contract language and nature of the book. Generally, it can be achieved by (1) stating that the clause applies only to works that “directly injure the sale” of the book under contract; (2) limiting the non-compete to the specific text of the book under contract; and (3) limiting the non-compete in time so that it remains in effect for only a certain number of years (the fewer, the better) and the author is free to write a new book on the same subject when it expires. For instance, we could live with a non-compete that says:

"Author agrees that during this first year of this Agreement, Author will not, without the written permission of the Publisher, publish or authorize to be published any full-length work specifically intended to supplant the Work in the marketplace, and which would clearly and directly harm the sale of the Work."

What's more, the Guild is ready to endorse a phrasing that would give a special nod to certain types of material around fiction work:

For works of fiction, where the use of any non-compete is even more dubious, it is essential to add: 

"Author-written prequels and sequels and author created characters are deemed excluded from the provisions of this paragraph."

Bell, book, and Guild

So where do you stand on this whole non-compete business? Jump in and tell us in #FutureChat

As the Guild continues to lay out issue after issue in its growing compendium of white papers, the discussion is widening, the debate is deepening, and more and more folks are starting to realize how many elements of a standard author contract are worthy of scrutiny.

Before turning to you in our live chat for your opinion, we'll give the Guild a last word here:

We think it’s time for publishers to recognize that overly broad non-compete clauses need to be eliminated. Publishers don’t need non-competes to prevent authors from publishing or reselling essentially the same books in repackaged form: Appropriate representations and warranties—not to mention copyright law—will do the trick. Otherwise, the non-compete should be tightly worded so that it prevents the author only from publishing a directly competing book elsewhere for a limited time. Publishing agreements should never be used to prevent authors from writing and publishing new books.

  • Agree?
  • Disagree?

See you in #FutureChat.


Join us each Friday live on Twitter at 4:00 p.m. London (BST), 3:00 p.m. GMT, 5:00 p.m. Rome (CEST), 11:00 a.m. New York (ET), 10:00 a.m. Chicago (CT), 9:00 a.m. Denver (MT), 8:00 a.m. Los Angeles (PT), 5:00 a.m. Honolulu (HAST).

We're interested in having your "Five-Minute Manifesto" for The Future of the Book Business. In his article, Those magnificent manifestos, The Bookseller editor Philip Jones renews his call for the FutureBook audience to reflect on five years of digital "to challenge the customs we have begun to adopt." The response is so robust that I've extended our deadline for submissions of manifestos to Monday (7th September). See below for details and a list of those published to date. Your statement, preferably no more than 500 words, should be sent to Porter.Anderson@theBookseller.com. Please send along a headshot and short bio, as well.

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More details are coming soon.

Main image - iStockphoto: Joreks