Big Publishing

International Publishing and the UK’s Vote for ‘Brexit’

25 June 2016

From Publishing Perspectives:

We know we have shot ourselves in both feet. And a lot of us didn’t want to. And we’re rather scared.”

That’s what one member of the London publishing industry has said to me this morning, on waking to find that the Leave camp has been successful in the UK.

Another colleague in southern England writes, “All my friends and publishing colleagues just simply can’t believe that this has happened. Or that we have somehow allowed it to happen. Our economy is in free fall, and our government in turmoil.”

. . . .

Literary Agent and rights specialist Ginger Clark with Curtis Brown (the US agency, not the London-based agency of the same name) has been trying on Twitter to encapsulate some ways that American publishing people might consider immediate effects.

Clark is supporting what another literary agent, Barry Goldblatt:

. . . .

I want to quote Cader at a bit more length than usual here because his musings on what’s coming are helpful in getting focused on the gravity of the moment:

“Already, the UK’s focus on the election had reduced consumer traffic at retail stores, and earlier in the month Waterstones’ chief executive James Daunt had warned employees in an email that leaving the EU would result in a ‘significant retail downturn’ that would ‘reverse much of the hard-won gain of the last few years.’…

“In addition to the prospect of lower ‘home market’ sales right now, UK publishers face the likelihood of rising costs on a number of fronts, albeit over time. Exporting books to EU countries may become more complicated and more expensive, even as a lower British pound reduces the price of exported goods (and/or makes sales in Euros, as well as Canadian and Australian dollars, worth more in pounds). But a significantly weaker currency could put also put UK publishers at competitive disadvantage: Their advances (and royalties) are worth less to trading partners, which could mean that UK publishers need to pay more to win new properties, or may not be able to buy rights as broadly as they would like.”

. . . .

The author J.K. Rowling had written earlier about some of the cultural currents:

“Nationalism is on the march across the Western world, feeding upon the terrors it seeks to inflame.

“Every nationalist will tell you that their nationalism is different, a natural, benign response to their country’s own particular needs and challenges, nothing to do with that nationalism of yore that ended up killing people, yet every academic study of nationalism has revealed the same key features. ‘Your country is the greatest in the world,’ the nationalist cries, ‘and anyone who isn’t chanting that is a traitor!…Now place your trust in our simplistic slogans and enjoy your rage aginst the Other!”

. . . .

“Brexit” was not a rehearsal, not a testing of the waters. It was and is the real thing, and—as The Bookseller’sown survey had shown, one that was not what nearly 80 percent of the UK’s publishing industry wanted to see.

As Blair put it, “We really thought it was impossible for us to take a decision like this” to pull that great nation out of the world’s largest collaborative marketplace. “The single market [of Europe] is where we sell half of our goods…We’re going to have to negotiate our way back into that.”

Link to the rest at Publishing Perspectives

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Hachette buys mobile game company Neon Play

24 June 2016

From The Bookseller:

Hachette has bought mobile games development studios Neon Play in a “substantial” acquisition. Hachette c.e.o. Tim Hely Hutchinson has said the acquisition “could be one of several” for the company in the app space.

Neon Play was founded by co-owners Oli Christie and Mark Allen in Cirencester in 2010 and to date has created over 30 games, including Paper Glider, Flick Football and Panic Traffic London, attracting over 60m downloads.

The studio, which has won 20 business awards including the Queen’s Award for Innovation, will be tasked with “creating, developing and marketing new mobile games” as a standalone business under the Hachette UK umbrella.

Although terms of the acquisition were not disclosed, Hely Hutchinson said it was a “substantial acquisition designed to lead to substantial revenues”, and was also a “serious first step” for Hachette in a bid to make its business “more digital”.

Referring to the mobile gaming industry as “complementary” to the book industry, Hely Hutchinson anticipates that trade and educational publishers will become “more like 50% digital” within the next five to 10 years. He told The Bookseller mobile gaming is “part of the future of the book industry”, with games the biggest and fastest growing part of the app market, while e-books, currently in decline, are “so similar to print books … they barely count as digital objects”.

. . . .

He added: “It’s something where we are very much on the front foot. E-book sales are not declining because people don’t like digital things. They are declining because there is less discounting in the market. So that is the main reason why e-book sales are lower this year. In fact e-books are so similar to print books that they barely count as digital objects. What people are really looking for with the digital world is more interactivity. So communicating with each other on social networks and playing games, you’re not just looking at something, you’re directly involved. And that’s where we want to be.”

. . . .

Hely Hutchinson (left) said that conversations with Christie and Allen had shown him their efforts with apps to date were “somewhat amateurish”.

“They know infinitely more than we do about the app market and how to make an app work, and I think the skills and knowledge they have at Neon Play will help us, for example with a cookery book app or an educational app that actually has nothing to do with games, so I see the acquisition as taking us several steps forward in various parallel relevant directions,” he said.

Hachette has already seen success in the games market with New Star Soccer in May, a game and a book all in one, that was produced in partnership with game developers New Star Games and Insight Studios, and contributed to by award-winning children’s authors The2Steves (Steve Barlow and Steve Skidmore). It hit 35,000 paid downloads in its first week and charted in Apple’s top 10 apps.

. . . .

Hely Hutchinson said the mobile game market “is not for all books,” because “they have to be big enough – have a big enough market – to justify the potential investment, which is quite large.”

Discussions with authors and agents whose books are candidates for gamification would start “from scratch,” Hely Hutchinson said. “Even if we happen to have a very broadly worded contract we would never go to authors and agents ‘we’ve got these rights, we’re going to exploit them’. We would always want to go to the author and agent and discuss the whole thing with them whether the games dimension is the sort of thing they want to do and we would start the terms discussion from scratch.

. . . .

“We see ourselves as having a role of taking, sensitively, creative people’s work to market and turning it into money – income – for creative people. It doesn’t mean we at Hachette can do everything, we are not of the scale to be producing Hollywood-style movies, but there are some things we can do where the investment level is affordable, which will widen our offer to our traditional author base and also give us potential new products where we can gain a very good understanding and do the job properly.”

Link to the rest at The Bookseller and thanks to SFR for the tip.

PG is not familiar with the mobile gaming world, but he tried to imagine what Hachette could bring to a company that makes games. He couldn’t come up with anything but money.

Brought to book: when publishers go to court

22 June 2016

From The Guardian:

A writer scored a significant victory over publishers this week, when comic book giants Marvel and DC – who had tried to block Graham Jules from using “superhero” in the title of his self-help manual Business Zero to Superhero – backed down after more than two years, just before a hearing in London. Their double shame (first coming across as bullies, then failing) raises the question: how well do publishers fare when they sue or are sued – are they legal superheroes or zeroes?

Regina v Penguin, AKA the Chatterley trial (1960)
The crown sought the banning of DH Lawrence’s Lady Chatterley’s Lover under the Obscene Publications Act, and equally ill-advisedly the prosecution was led by fuddy-duddy Mervyn Griffith-Jones, who notoriously urged jurors to reject the book as one they would not wish their “wife or servants to read”. They backed Penguin’s right to publish instead, in a case seen as heralding 60s permissiveness. (or, as portrayed in Larkin’s “Annus Mirabilis”, the arrival of “sexual intercourse”).Publisher win

. . . .

Random House v Joan Collins (1996)

Unimpressed by the first novel produced by Collins (then at the height of her post-Dynasty fame) as part of a $4m two-book deal, Random House called it “unreadable” and sued for the return of the $1.2m advance. Crucially, her contract had only stipulated a “complete” text, with the usual requirement for a “satisfactory” one indulgently removed; she duly emerged the winner, with Random House (which never published the novel) exposed as embarrassingly eager to profit from shoddy celebrity blockbusters as well as failing to retrieve its money. Publisher loss

. . . .

Baigent and Leigh v Random House (2006)
Dan Brown gave evidence in London’s high court when his mega-selling The Da Vinci Code was accused by the authors of conspiracy history book The Holy Blood and the Holy Grail (published, as it happened, by another division of Random House) of having “appropriated the architecture” of their work and so infringing their copyright. The judge dismissed their claim, and they were ordered to pay costs estimated at nearly £1.3m. Publisher win

. . . .

Jennifer Pedroza v The Writer’s Coffee Shop (2016)
Pedroza, an American elementary teacher, had worked for the e-publishing outfit that first published EL James’s Fifty Shades of Grey, and argued she had been defrauded by her then business partner of her share of its total estimated royalties of $40m. An almost two-year case ended with a judge in Texas ordering the publisher (based in Sydney, Australia) to pay her $11.5m. Publisher loss

Link to the rest at The Guardian and thanks to Mark for the tip.

Pulp Friction

21 June 2016

From The Atlantic:

Even by the standards of the ailing book publishing industry, the past year has been a bad one for Barnes & Noble. After the company spun off its profitable college textbook division, its stock plunged nearly 40 percent. Its long-term debt tripled, to $192 million, and its cash reserves dwindled. Leonard Riggio, who turned the company into a behemoth, has announced he will step down this summer after more than 40 years as chairman. At the rate it’s going, Barnes & Noble won’t be known as a bookseller at all—either because most of its floor space will be given over to games and gadgets, or, more ominously, because it won’t even exist.

. . . .

But while many book lovers may be tempted to gloat, the death of Barnes & Noble would be catastrophic—not just for publishing houses and the writers they publish, but for American culture as a whole.

If Barnes & Noble were to shut its doors, Amazon, independent bookstores, and big-box retailers like Target and Walmart would pick up some of the slack. But not all of it. Part of the reason is that book sales are driven by “showrooming,” the idea that most people don’t buy a book, either in print or electronically, unless they’ve seen it somewhere else—on a friend’s shelf, say, or in a bookstore. Even on the brink of closing, Barnes & Noble still accounts for as much as 30 percent of all sales for some publishing houses.

But the focus on sales masks the deeper degree to which the publishing industry relies on Barnes & Noble. The retailer provides much of the up-front cash publishers need to survive, in the form of initial orders. Most independent bookstores can’t afford to buy many books in advance; a single carton of 24 books would represent a large order. Amazon also buys few books in advance, preferring to let supplies run down so as to prompt online shoppers to “add to cart” because there are “only five left in stock.”

Barnes & Noble, by contrast, often takes very large initial orders. For books it believes will fly off the shelves, initials can reach the mid-five figures—hundreds of thousands of dollars that go to the publisher before a single book is even sold. That money, in turn, allows publishers to run ads in magazines and on Facebook, send authors on book tours, and pay for publicists. Without Barnes & Noble, it would become much harder for publishers to turn books into best-sellers.

Even if Barnes & Noble doesn’t close, publishers are already starting to suffer from the chain’s decline. “What can happen is that their number of stores can shrink, their store footprint can shrink, so that the number of titles on which they put meaningful advance orders can shrink,” says Mike Shatzkin, an industry veteran. “Publishers are going to have to adjust to a model where they print what they know will sell rather than what they hope will sell.”

. . . .

In a world without Barnes & Noble, risk-averse publishers will double down on celebrity authors and surefire hits. Literary writers without proven sales records will have difficulty getting published, as will young, debut novelists.

Link to the rest at The Atlantic and thanks to Dave for the tip.

Pipeline of women execs is ‘woefully low’

15 June 2016

From The Bookseller:

Penguin Random House chair Gail Rebuck has said the pipeline of women executives in FTSE 100 companies is “woefully low” and that she is “quite close” to being in favour of quotas, should things not be seen to be moving in “the right direction”.

Speaking at the Oxfordshire Publishing Group Summer Conference yesterday (14th June) in conversation with journalist and TV presenter Mariella Frostrup, on the subject of women in senior positions in business and in publishing, Rebuck said of the FTSE 100 companies: “I’m moving towards quotas actually. Quite close. I’m waiting to see where the numbers go both in terms of boards and pipeline before I pronounce. If we’re not going in the right direction, you will find me nailing my colours to the quota mast.”

Rebuck contrasted her views of FTSE 100 companies, with the historical success publishing has had promoting female executives, Rebuck predicted a “next wave” in the next 10 or 15 years in which “women will percolate to the top” in publishing. Rebuck and former HarperCollins c.e.o. Victoria Barnsley stepped down in 2013, sparking debates around women in leadership within the trade. This was further fuelled by Little, Brown c.e.o. Ursula Mackenzie’s exit from her role in 2015 to become chairman, a position she will also relinquish at the end of 2016.

While Rebuck said of the current situation: “Interestingly most women c.e.o.s have now for one reason or another left the industry. Either because they’re too old like me or gone on to do other things. We have a large number of women at divisional level, very good numbers, but very few – not anyone – at the top as a c.e.o. of one of the ‘Big Five’.”

Link to the rest at The Bookseller

‘Starting To Hit the Wall’: A Conference Focuses on Publishing Rights

14 June 2016

From Publishing Perspectives:

The rising importance of a mindful, purposeful, aggressive approach to rights management in publishing was phrased many ways during the course of Monday’s conference, Rights and Content in the Digital Age, organized by Publishing Perspectivesin the Grand Hall at New York University’s Kimmel Center.

One of the most intriguing images for the potential value of what book publishing has to offer came from digital content strategist Matt Dellinger, who has done a lot of work in archival content with The New Yorker, Esquire, and other magazines:

“The future of content is more and more about the history of content,” Dellinger said. “It’s a matter of taking the deeper end of the culture pool and circulating it in the kiddie pool of snack-food content.”

From Dellinger and other speakers—and as much in regard to frontlist as backlist—the message was clear: More orchestrated, coordinated, and supported approaches to the management of rights is fast becoming a major key for publishers at a time when sales are challenged in saturated markets: a failure to exploit rights to the fullest, most efficient degree possible is something publishers can’t afford.

Ingenta Chief Revenue Officer Randy Petway’s presentation pointed to how minimal investment has traditionally been made by publishers in the infrastructure of rights departments—something later echoed in comments by longtime rights specialist Kris Kliemann, formerly of Wiley.

. . . .

The day opened with a keynote address from author Roxana Robinson, President since 2014 of the Authors Guild, who warned of the mounting difficulties authors are facing in finding compensation of their work in digitally complicated markets.

“Suppose you want to buy a copy of my newest novel, Sparta,” Robinson said, “which was published in 2013. If you go to Amazon, you will find that they offer a new paperback for $12.98. And also another new paperback for $4.33. And a used paperback for one penny.

“Now, why would you choose to buy the more expensive copy, the $12.99 paperback instead of the $4.33 paperback? They’re both new. You’ll buy the cheaper one. But where does that $4.33 paperback come from? It’s probably a copy the publisher sold off to make room in a warehouse somewhere. It’s very common. Publishers have high hopes for every book they make, they make more copies than can sell…After a certain period of time, they realize they need that space in the warehouse, so they sell off copies cheap to a jobber, a middleman. They sell them at a very deep discount.

“Many contracts have clauses that will allow the publisher, under these circumstances of deep discount, to pay no royalties. The publisher gets paid by the middleman. And the middleman gets paid. Only the author will get nothing at all for the sale of this book which she just wrote…The publishers know this. But they do it [sell at discount to middleman vendors] because they want some money now.”

Link to the rest at Publishing Perspectives and thanks to Dave for the tip.

Permit PG to translate: Publishers are facing more and more difficulties in attracting and keeping top authors because more and more authors are learning they can make more money self-publishing. Such difficulties are, of course, adversely impacting revenues and profits.

So publishers are turning to books by authors who have already signed publishing contracts that grant the sun, moon and stars to publishers. The expanded rights management activities are aimed at maximizing revenues from those authors’ books.

As the comments from Ms. Robinson reflect, more revenues to the publisher doesn’t always mean more royalties for the author. Deep discount clauses are buried in the back of most publishing contracts and, in all such contracts PG has reviewed, he’s never seen any evidence that changes to those clauses were negotiated by anyone representing the author.

(For a number of years, it was not unusual for changes to the boilerplate contracts of large and not so large publishers to be highlighted in some way (bold type, underlines, indents, etc.) in the version of the contract the author signed. This practice continued for long after word processing software came into common use. Where such practices were followed, it is easy for PG to see what modifications to standard agreements were made to the author’s benefit or detriment and what unfair contract language was left unchanged.)

Under complex contracts granting a wide range of rights to a publisher, it is sometimes possible for the publisher to license or sell a book in a variety of different ways to affect how much money the publisher keeps. Harlequin’s former practice of licensing every book to a related HQ company instead of directly publishing it, thereby substantially reducing HQ’s royalty payments to authors, is one example of exploiting complex contract provisions in ways authors may not expect.

The standard contracts of other large and small publishers would permit them to do the same thing HQ did to increase profits and reduce royalty payments. It’s something PG has seen and corrected more times than he can remember.

When lowering the price of a book to increase sales, a publisher that is paying attention to the deep discount clause can make more money by pricing the book at a penny less and triggering deep discount royalties (or non-royalties) than it will make by pricing the book at a penny more and paying standard royalties.

PG suggests that aggressive rights management activities are more likely to materially increase the publisher’s income than the author’s income.

The Trouble of Rational Thought

13 June 2016

From The Paris Review:

In the late nineties, Helen DeWitt, a then-unpublished writer with a Ph.D. in classics from Oxford, sold her first novel, The Seventh Samurai. After reading her editor’s “crap comments” on the manuscript, she wrote to her agent; if she had to keep working with that editor, she said, “she would commit suicide.”

Some time later, a friend showed the manuscript to Jonathan Burnham, then at Talk Miramax Books; he immediately offered her $70,000. At the Frankfurt Book Fair, the novel caused what can fairly be called a sensation; but while foreign houses scrambled to buy translation rights, DeWitt was battling her copy editor, who had ignored DeWitt’s edits and imposed hundreds of standardizing changes of her own. It was, DeWitt told the Observer in 2011, as if they were trying to “kill the mind that wrote the book.”

In 2000, DeWitt’s novel was released as The Last Samurai. (DeWitt was forced to change the title, only to see its Google results buried, three years later, beneath the Tom Cruise movie of the same name). In The New Yorker, A.S. Byatt hailed it as “a triumph—a genuinely new story, a genuinely new form.”

And then, in 2005, the imprint that had published DeWitt’s novel was absorbed by Disney’s Hyperion Books. By the time The Last Samurai was excitedly recommended to me, in 2007, by an ex-boyfriend I was still eager to please, it was out of print—which only, of course, added to its allure. This was not a book for just anyone, was the implication. News of it traveled by word of mouth—and if that word reached you, it said something about the kind of reader you were: attracted to the recondite, undaunted by formal difficulty, unconventional in your tastes.

Link to the rest at The Paris Review

How Are Books Changing?

13 June 2016

From Digital Book World:

Working in this industry, I frequently think about the state of reading today. Given that many of us now read more on digital devices than we do with physical books, I find myself wondering how that shift has affected our reading habits. Do we skim more and retain less? Does it matter what type of device we’re reading on? Is reading, to some, merely an app, on par with Angry Birds?

To many people, it is. And this mindset can be consistent regardless of whether or not they read digitally. The act of reading for pleasure is often considered just another activity—and perhaps a boring one at that—up there with watching a TV show, listening to a podcast or sending endless texts.

It’s clear that reading does not hold the overall importance in today’s society that it did for previous generations. With so much more technology available, it’s understandable that many people—young people, especially—don’t find the act of reading to be all that exciting or compelling.

. . . .

But while, for many, the way we’re reading books has undeniably changed, what’s even more interesting to me is the way in which books themselves are changing.

A good example comes in the recent news from author James Patterson and his publisher, Hachette. From the New York Times:

To date, he has published 156 books that have sold more than 325 million copies worldwide. But Mr. Patterson is after an even bigger audience. He wants to sell books to people who have abandoned reading for television, video games, movies and social media. So how do you sell books to somebody who doesn’t normally read? Mr. Patterson’s plan: make them shorter, cheaper, more plot-driven and more widely available.

In many ways, this move is potentially very good for business: it opens up reading as a possible option to new, untapped customers, it provides the possibility of a new revenue stream and, as the Times notes, it allows Patterson and Hachette to attempt “to colonize retail chains that don’t normally sell books, like drugstores, grocery stores and other outlets.”

Moreover, the timing makes sense. From the Times again: “Many readers have already developed a taste for shorter digital works.”

. . . .

The authors submit that readers today have neither the time nor the capacity to reading epically long works of fiction. Gone are the days of the Dickensian novel, the authors suggest, with its winding stories and mammoth length. Today’s world of content revolves around short attention spans and hooking readers in early.

Link to the rest at Digital Book World and thanks to Jan for the tip.

Sounds like a lot of generalization to PG, speculation by people who know more about the buyer for Barnes & Noble than what real people are doing with books, particularly in genre fiction.

BLS data helps illustrate the sharp decline in newspaper and magazine industry employment

10 June 2016

From Talking New Media:

Data shows that it’s not just the newspaper industry that has seen big job losses since the last recession, the magazine and book publishing fields have seen sharp job declines, as well.

. . . .

Parents don’t let your children grow up to be in the publishing industry. We all know that, right? But a collection of data from the Bureau of Labor Statistics (BLS) shows just how bad the job losses have been in the newspaper and magazine business in the U,S.

A little over a month ago TNM reported that the BLS had revealed that Internet publishing jobs had now exceeded those in the newspaper industry. This same data has been supplemented with data from other areas such as the magazine, book and motion picture and video production businesses.

. . . .

a1

First, it is obvious that recessions hurt employment, but when you look at newspaper and Internet publishing data together you see that it was the last recession that really changed the world of print versus digital publishing. Many of us who were involved in digital publishing well before 2008 always expected the shift to take place, but were actually surprised that shift did not occur earlier. Was it the tech bubble that prevented this from happening, or was it the fact that the recession of 2001 was so shallow?

. . . .

Take out newspaper and the story really would be about how many jobs have been lost in the magazine and book publishing businesses.

Speaking of book publishing, this chart shows that the industry has been cut by a quarter. But the really bad news is that almost all of that was seen since the last recession.

What this means is that digital media is now really effecting the magazine and book publishing businesses almost as severely as it has hurt newspaper employment.

Link to the rest at Talking New Media and thanks to M for the tip.

An Important Notice on The Non-Compete Clause

9 June 2016

From Kristine Kathryn Rusch:

I wrote about the non-compete clause in mid-May. It’s a pernicious horrid little clause that has shown up all over contracts involving creative works—not just in traditional publishing deals here in the U.S., but works in translation, game rights, movie deals, and more.

In that post, I said that I wasn’t sure if the clause would hold up in court, but that was a bit of fudge. I knew that some states had already litigated the non-compete clause and found it wanting.

. . . .

I’ve had the pleasure of emailing back and forth with Teri Kanefield for over a year now. She writes books for young readers as well as adults. She also practices law in California. Here’s what her website says about her law practice:

Teri’s law practice is limited to representing indigents on appeal from adverse rulings. She believes that when the rights of society’s most vulnerable members are denied, everybody’s rights are imperiled. She also believes that the purpose of literature is to expand our sympathies.

She emailed me after reading the non-compete blog and mentioned that non-compete clauses are mostly illegal under California law, with rare exceptions.

She also suspected that they were illegal and thus unenforceable under New York law.

. . . .

So, without further ado, here’s Teri:

Hi, Kris,

First, all the usual disclaimers: I am a lawyer, but this is out of my area of expertise, and I am not authorized to practice in New York.

So, while nothing here is legal advice, maybe we can start a discussion that will help writers deal with these non-compete clauses.

After our email chat, I visited the law library and did a little research on New York non-compete agreements. Here is what I found.

Why I suspect that non-compete clauses in publishing contracts are disfavored under New York law

As far as I can see, New York has no statutes governing non-compete clauses. The law is entirely case law (meaning that judges make the law according to established principles and follow the precedent set down from other judges).

. . . .

Leading cases in New York on non-competes are Reed, Roberts Assoc. v. Strauman, 40 N.Y.2d 303, 307-08 (N.Y. 1976) and BDO Seidman v. Hirshberg, 712 NE 2d 1220 (N.Y. Ct. App. 1999)

Both cases hold that non-competes will only be subject to specific enforcement to the extent that they are:

  1.   necessary to protect the employer’s legitimate business interests,
  2.   reasonable in time and area, 
  3.   not harmful to the general public and 
  4.   not unreasonably burdensome to the employee.

Obviously, it is important to define “legitimate business interest.”

Here is what I found on “legitimate business interest” in New York:

Employer legitimate interests include protecting a customer base, trade secrets and an employer’s investment in training or educating employees. Business or financial information, such as market reports or market strategies, do not trigger the trade-secrets legitimate interest. Customer lists are generally not considered to be confidential information unless such lists are discoverable only by extraordinary efforts and not through public sources. As a general rule, a restraint against ordinary competition remains against public policy.

Merely preventing ordinary competition is not a legitimate business interest.

Today, a mobile workforce in a digital economy creates opportunities for employees to compete unfairly against their former employers, so courts will prevent employees from using inside information to compete unfairly against a former employer.

In other words, as in other areas of business law, fair competition is allowed. Unfair competition is not.

In addition, non-competes cannot be used to prevent a person from earning a living:

Courts in New York are less likely to enforce non-compete clauses if the restriction would leave the employee without compensation from the former employer and without the right to earn compensation in his or her field. When evaluating the enforceability of a non-compete clause, New York courts may take into consideration whether or not the employer will make any payments to the employee for the period of “garden leave,” when the employee is no longer employed by the former employer but is restricted from working for a competitor. See, e.g.,Cornell v. T.V. Dev. Corp., 17 N.Y.2d 69, 75, 268 N.Y.S.2d 29, 34 (1996); DeCapua v. Dine-A- Mate, Inc., 292 A.D.2d 489, 744 N.Y.S. 2d 417 (2d Dep’t 2002).

A recent (2013) New York case held that a non-compete may be enforceable if the departing employee agrees not to compete in exchange for financial compensation. Lenel Sys. Intl. v. Smith, 106 A.D. 3d 1536 (2013). In this case, an employee accepted stock options in exchange for a promise not to work for a competitor for two years.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books and to Teri Kanefield’s books. If you like an author’s post, you can show your appreciation by checking out their books.

Non-compete clauses in publishing contracts have been a burr in PG’s saddle for a long time. He first blogged about them five years ago and if you type “non-compete” into the TPV search box, you’ll find a whole bunch of posts on the topic.

PG says Teri’s overview of New York law on the enforceability of non-compete agreements mirrors the way such agreements are handled in a great many states. As she mentions, California is effectively death on non-compete agreements and has been since the California Territory’s first constitution, adopted in 1849, in advance of California attaining U.S. statehood the following year.

So can an author simply ignore the non-compete provisions in a publishing agreement that includes a provision saying New York law applies to the interpretation of the contract and any litigation on the subject will take place in New York?

PG says that any author who wanted to do so and was prepared to pay for a court fight in New York City would probably be doing a favor for a lot of authors. If the Author’s Guild wanted to do something that really benefited a great many trad-pubbed authors, it would fund such litigation.

Unfortunately for the general state of justice, not a lot of authors are likely to be interested in becoming a test case to determine the status of author/publisher non-compete agreements under New York law.

In the meantime, authors involved with traditional publishers should make a big fuss about these provisions and instruct their agents to do the same thing. More importantly, such authors should negotiate changes in the standard non-compete provisions that effectively neuter the clause – no competing publications for a period beginning one month before and ending one month after the trad-pubbed book is released with a tight definition about what is and is not a competing publication.

 

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