Contracts

Gravity Lawsuit Update

20 June 2015

From author Tess Gerritsen:

For a second time, the court has concluded I have not stated a viable claim for breach of contract against Warner Bros. or New Line. My 1999 contract with New Line Productions guaranteed me “based upon” credit, a production bonus, and back-end profits if a motion picture is ever made based on my novel Gravity, which is about a female astronaut trapped aboard the International Space Station after the rest of her crew is killed.  Warner Bros. acquired New Line in 2008 and owns and controls its assets, including the film rights to my novel Gravity. Despite our arguments that the two companies are inextricably bound together, the court ruled that Warner Bros. is not liable for New Line’s contractual obligations to me.

Nor can I sue for copyright infringement, as my Gravity film rights are owned by New Line. The only entity with the legal standing to sue for copyright infringement is New Line – and they will certainly not sue their parent company, Warner Bros.

This ruling allows me no possibility of remedy.  Even if the Warner Bros.’s film had copied my story word for word, there would be nothing I could do about it.

. . . .

The ruling was made without affording my attorneys any opportunity for oral argument. We were never given an opportunity for discovery.  We have been stopped at the courthouse door, unable to present the evidence we’ve amassed about the direct development links between my novel Gravity and Cuaron’s filmGravity.

The court has again granted me the opportunity to file an amended complaint, for which I am grateful. I am not by nature a crusader, but the consequences of this ruling could be devastating to all writers working in any media, including film, television, and publishing.

As one entertainment attorney (unconnected with my lawsuit) observed:

What is troubling about this case is that Gerritsen … attempted to protect herself through not only a standard assignment provision, but also required that New Line execute and deliver a Continuing Guaranty in which it guaranteed the “full and faithful performance” by Katja of all of Katja’s obligations under the Contract.Despite these precautions, “by virtue of a written agreement dated January 1, 2010, all intellectual property acquired by New Line at any time (in perpetuity) is deemed to be automatically transferred to and owned by WB. WB paid no consideration to New Line for entering into this agreement, nor is WB obligated to pay any consideration in the future when intellectual property rights are acquired by New Line and automatically assigned to WB. The express purpose of this agreement “is solely to vest in WB the benefits of specific rights-related provisions of Content Agreements” and per the agreement, “WB assumes no obligations under such . . . Agreements.”

With Sony, Dream Works Animation, Lions Gate, and MGM just a few of the possible players currently looking to acquire or be acquired, the ‘gravity’ of this situation should not be overlooked or downplayed.

Link to the rest at Tess Gerritsen

Here’s a link to Tess Gerritsen’s books

 

 

The Recent Tintin Ruling Offers a Valuable Reminder that Creators Need to Understand the Contracts They Sign

18 June 2015

From Ink, Bits & Pixels:

How well do you know the contracts you’ve sign?

In the case of the Belgian cartoonist Herge (or rather his estate), the answer is not very well.

The Comics Reporter and Artnet reported last week that the Herge estate has lost an important copyright lawsuit over Tintin, the famous Belgian cartoon character. The estate had sued a Netherlands-based Tintin fan club in 2012 over its use of the original copyrighted images in newsletters sent out to club members. The estate sued the club in a Belgian court, and after three years of legal wrangling the judge ruled in favor of the club.

And here’s where things get interesting.

The fan club won the case not because of fair use (as I would expect) or because the estate didn’t own the copyright (it still did). The estate lost this case after lawyers working for the fan club found and submitted an old contract which showed that Herge had assigned the publishing rights to his publisher in 1942. The court has ruled that 73-year-old contract was still valid, casting a legal shadow on all rights contracts for Tintin.

. . . .

Between the book rights, movie and tv rights, and most importantly the merchandising rights, the Tintin decision just upset contracts worth millions of dollars a year – no joke.

Link to the rest at Ink, Bits & Pixels and thanks to Michael for the tip.

PG says you should think long and hard before you commence litigation. In the nature of lawsuits, any relevant contracts are examined much, much more carefully after a suit is filed than they likely were before they were signed.

In PG’s litigating days, the local Legal Aid office asked him to represent an indigent client who was being sued by a large bank in connection with the repossession of the client’s auto by the bank.

Essentially, the bank loaned too much money on the auto and, following repossession, couldn’t recoup the full amount of the loan balance by selling the vehicle. They sued PG’s client for the deficiency.

PG told the bank’s attorney that the man had no money (you had to be indigent to qualify for Legal Aid assistance) and, even after the bank succeeded in the lawsuit (an almost certain thing), there wasn’t property or income available to pay any meaningful portion of the amount owed.

The bank’s attorney insisted on a trial because PG’s client had signed a contract and contracts were sacrosanct, dammit.

During his trial preparation, PG discovered the bank had made a basic error in drafting its form auto loan documents. PG had no obligation to disclose his discovery to the other side and he decided it would be interesting to surprise the bank’s attorney with this news during the trial.

The bank’s big attorney brought two little attorneys with him to court and PG brought his briefcase (in later times, he would bring his computer, but this is an old story).

The bank presented its slam-dunk case and PG pointed out that the document the bank had required his client to sign referenced a specific statute number as its basis for repossession. That statute number referred to nothing. There was no statute with that number. The bank couldn’t enforce a non-existent statute against PG’s client.

The bank’s lawyer said that the bank clearly meant to reference another statute number that did exist. The little attorneys frantically paged through stacks of papers.

PG responded that the bank wanted to strictly hold his client to the detailed provisions in the loan documents and, in fairness, PG thought the bank ought to be held to the specific language it had included in documents PG’s client had signed. Contracts were sacrosanct, dammit.

Darned if the judge didn’t rule in favor of PG’s client.

The bank’s lawyer was very upset and said the bank would appeal. PG pointed out that, since this was a standard bank form, the bank had probably used the same document for thousands of auto loans. (It was a very big bank.)

An appeal would be a higher profile affair than a trial in a small courtroom with no one other than the parties and their attorneys in attendance. Did the bank want additional publicity about its defective documents and their imaginary statute?

Shortly thereafter, the bank dismissed its suit and released PG’s client from any claims.

So, there’s one war story about unanticipated consequences that can arise during a lawsuit.

 

 

A Digital Picket Line: The Authors Guild Would Like Your Attention

11 June 2015

From Thought Catalog:

‘Authors Are More Vulnerable To Exploitation Than Ever’

 London-based publisher Michael Bhaskar has called digitally empowered readers “the power brokers who matter most” in publishing today.

While that kind of commentary refers to the industry’s efforts to strike a more direct-to-consumer stance with a curatorial audience, there are other ways in which readers soon may begin to broker power.

A readership drawing closer to its authors might begin to care more about those people than they have in the past. It’s not that readers didn’t like their authors, it’s just that in previous decades, there was comparatively little contact. Readers knew little if anything about the relationships between their favorite writers and the great publishing houses that proudly produced their books.

The digital dynamic has changed that. And the Authors Guild is ready to take its case for publishing contract reform for its writers directly to those readers.

. . . .

On Friday (12th June), the Guild plans to post a new article on its revamped Web site explaining more about its plans to address, one issue after the next, the standardized contract points with which its leadership maintains that publishers do authors many disservices.

We want to do just that. We want to raise these issues in a very public way so there’s an open dialogue on them.

. . . .

In an opinion piece last month at The Bookseller in London, the literary agent who uses the pen name “Agent Orange” (because he or she fears that being known could cause repercussions for author-clients) wrote:

The publishing industry exists to connect the creative talents of authors to a market. The Internet was supposed to streamline the business, get rid of the middle man and put more money in authors’ pockets. That was always a dangerously simplistic point of view. What we couldn’t have predicted is that it would create a world in which authors are more vulnerable to exploitation than ever. There’s a really strong case for authors to come out on strike and remind everyone in this business exactly where the value in it resides.

It won’t happen, of course. But it should.

In Agent Orange’s UK market, the typical income for a professional author in 2013 has been reported to be only some £11,000 in 2013, roughly $17,000, a plunge of 40 percent since 2005. That news is tremendously controversial in London, the Society of Authors having issued a damning statement to remind publishers that “authors are the one person 100-percent necessary” to the world of books.

. . . .

If anything, however, it’s hard to hold the author corps, as a whole, completely blameless in historical terms. To many of us today, it’s baffling that some of our greatest minds and thinkers — cultural giants in many cases — would ever have accepted such absurdities as the industry’s infamously unreadable royalty statements. No one you ask in the industry even tries to defend those things: much noisy effort has gone into making royalty statements more understandable, even now without complete success in some quarters. A bit of a scramble has occurred in efforts to give authors online dashboards so they can monitor and track sales. In the past, authors had no such information about their own books.

When I ask Rasenberger how such sharp minds as our most celebrated authors could have tolerated whole careers of what the Guild says are unfair and sometimes illogical contract traditions, she says that much of the holdover standards come from a time when authors were better cared for and more aggressively supported by their publishers.

“There are some very famous authors who have signed contracts you wouldn’t believe,” she says. “There was a real sense of partnering between authors and their publishers, authors and their editors, who worked closely with those authors. Authors felt they were being taken care of, they trusted them. As long as those people stayed in place, yeah, their editors looked out for them and could take care of them.”

. . . .

Rasenberger calls the Fair Contracts Initiative, “a shame-on-you comment on publishing” because, she says, the contract points the Guild sees as most egregious are the ones that harm the most vulnerable authors the most: un-agented authors. While she doesn’t have figures at hand as we speak, she tells me that she was surprised when she began her executive direction of the Guild to learn how many of its members don’t have agents.

Link to the rest at Thought Catalog and thanks to Paul for the tip.

PG can’t see anything wrong with the Authors Guild trying to spread the word among readers about terrible publishing contract provisions. However, even a contract geek like PG doubts whether this topic will be of interest to anyone outside the traditional publishing world.

A far more effective response to unfair traditional publishing contracts is one that’s been underway for a few years – self-publish and don’t worry about what dinosaur publishing would like you to sign. Don’t worry about whether your agent is one of those who really fight for her/his client or just wants to get the contract signed and the advance delivered as soon as possible.

Amazon is not a perfect company, but the fundamental proposition it offers to authors is a continuing agreement between two willing parties. If either Amazon or the author decides the agreement has stopped working for them, one or both can take their bat and ball and go home. Authors can fire Amazon as their distributor for any reason or no reason at any time.

Authors Guild Announces Fair Contract Initiative

29 May 2015

From The Authors Guild:

Times have changed in the world of publishing, but the “standard” book contract has not kept up. It’s filled with terms, conditions, and language that would be recognizable to authors of a century ago, remnant of a bygone era when e-books, print-on-demand, deep pricing discounts, and online booksellers weren’t even a gleam in the eye. At the same time, new overreaching clauses have been added to insulate the publishers from any potential loss, placing all risk on the author. Yet today’s authors are often asked to sign these standard agreements “no questions asked,” and if they question author-unfriendly terms, they are often told the clauses are “not negotiable.”

In April 2015, the Authors Guild conducted its first major member survey since 2009. Though the complete results are still being compiled, our preliminary findings suggest that fulltime and part-time U.S. authors have experienced a significant decrease in writing income over the last five years. Median writing-related income decreased 24% in that time frame—to only $8,000, with full-time authors’ median income down 30%, from $25,000 to $17,500. Authors who have been writing between 25 and 40 years have seen the greatest drop in income, from a median of $28,750 to just $9,500.  While there are many reasons for this decline in income, unfair terms in publishing agreements don’t help. Notably, during the same period, publishers’ revenue has seen steady annual growth. There’s something very wrong about that disparity.

. . . .

The traditional publishing enterprise was conceived as a joint venture, with authors and publishers working as partners to produce and distribute books. In the pre-digital climate, this meant that publishers split their profits more or less equally with authors. Publishers earned an equal split of profits as compensation for their efforts in shepherding a book through the publishing process, from creation to distribution to sub-licensing. But that is far from today’s reality.

Many publishers are doing less than ever for their authors. In many cases the companies provide less editing, little to no marketing, and no promotional budget. Instead, they ask authors to do their own marketing by engaging in time-consuming social media campaigns. Rather than compensate authors for this additional work, publishers usually insist on keeping a whopping 75% of income from e-book sales. That’s just one of many unacceptable policies.

. . . .

Here are just some of the unfair terms in today’s standard book agreements:

  • In exchange for some money, you give the publisher all rights to your book for 35 years—or your lifetime plus 70 years (let’s just call it “forever”) if you or your heirs forget to terminate after those first 35.
  • The publisher gets to reject your manuscript for any reason or no reason, and if that happens, you have to give back all the money you’ve received before you can publish the book with somebody else.
  • The publisher can publish your book when the company gets around to it, which may take as long as two years from the time it accepts your manuscript—or even longer. You have no control, and you may have to wait for the last part of your “advance” until the book finally appears in print.
  • If you are even one day late delivering the work (time is of the essence, it seems, only when it comes to the author), the publisher can opt to terminate the agreement and ask for the advance back.
  • You can’t publish another book under your name or even a pseudonym anywhere in the world until this one is published—even if the publisher has put it off.
  • You have to offer the publisher the rights to your next book, but the publisher can wait to decide whether to offer you a deal on it until two months after this one comes out.
  • You have no say in what the cover, jacket flap, and ad copy will look like.
  • If the publisher does anything you don’t happen to like, such as assign you an incompetent editor, fail to exploit subsidiary and foreign rights, print too few copies to satisfy customer demand, forget to register your copyright, consistently forget to pay you on time, or go bankrupt, you have no real recourse.

Like authors, publishers have had to adapt to the new realities of the digital age; one unfortunate way they have adapted is by squeezing the author.

. . . .

If authors can’t make a living producing works of quality, there will be very, very few people who can afford to write books.

Link to the rest at The Authors Guild and thanks to Michael for the tip. Here’s a link to the announcement of the initiative.

PG would have added a few items to the list of unfair contract terms, but this isn’t a bad start.

The progress or lack of progress on this initiative will be one way of demonstrating whether The Authors Guild is a relevant organization for 21st century authors or not.

Will Author Solutions Case Go Class Action?

19 May 2015

From Publishers Weekly:

Federal judge Denise Cote could soon decide whether the ongoing case against self-publishing service provider Author Solutions will go forward as a class action. In the latest round of briefs, attorneys for the plaintiff authors argue that a common question sits at the core of the case, and merits action class status: “Did [Author Solutions] engage in a fraudulent scheme to sell authors worthless marketing services?” But in a reply motion filed last week, Author Solutions attorneys claim the case is without merit, and falls short of the requirements for class certification.

Notably, the latest round of briefs details an evolving case, including a “shifting roster” of author plaintiffs, and a narrowing of the case from the the initial complaint. First filed in spring of 2013, the initial suit alleged that Author Solutions misrepresents itself as an independent publisher, luring authors in, and then profiting from deceptive and fraudulent practices, including “delaying publication, publishing manuscripts with errors to generate fees, failing to pay royalties, and up-selling ‘worthless services’ to authors.”

. . . .

 At the heart of the case is an alleged “deceptive” scheme to lure authors in with promises of sales and marketing exposure, when the “primary goal” is not to sell books, the plaintiffs argue, but to “sell services and books back to authors.” In filings, attorneys for the authors paint a picture of Author Solutions “consultants” with little or no publishing experience, selling “worthless” services to unsuspecting authors. “[Author Solutions], as part of a company-wide policy, hides from consumers that it is a telemarketing operation,” plaintiff attorneys argue, “with no stake in the quality or retail success of its authors’ books.”

Link to the rest at Publishers Weekly

Dead to Rights

15 May 2015

From author Roxanne St. Claire:

About a dozen years ago, I had a conversation with a friend, and she shared a secret about an online “e-ffair” she was having with an ex.  Her story sparked the idea for a book about women who are tempted to connect with ex-lovers over the internet, something that was just coming into the social conscious at that time.  Classmates.com had just launched, but Facebook was in Mark Z’s imagination, and tweeting was still something birds did.  Email had become our main source of communication, along with a little technology we turned into a verb, as in “Let’s IM tonight.” (Instant Message, the precursor to texting.)

Hit Reply poured out of me, full of characters drawn from real life and my imagination, written entirely  in the epistolary form – all “letters” – only in this case it was emails and instant messages.  At the time, I had sold my first few romantic suspense titles and was very (very) slowly building my name in that genre.  But “chick lit” was hot, pink covers were everywhere, and Bridget Jones’ Diary was still very much the in the mainstream.  My publisher had  launched an imprint that I thought would make a good home for a story about friendship, exes, and major life changes.  They loved the concept and offered a contract, giving me a release date almost two years in the future.

. . . .

By the time that distant date came about and Hit Reply was released, chick lit was waning, and pink covers were verboten at Barnes & Noble and Borders.  I hoped for the best, but the “all email and IM” format didn’t grab attention, and neither did one of the most ill-conceived covers I personally have ever seen.  (Because everyone puts their wired mouse in their back pocket, right?)

Whatever, the book tanked.

. . . .

Fast forward (not really fast) ten years.  Forty-five books for me, several publishers, more agents than I’m proud to admit, and a healthy, sustaining career that has moved firmly and completely into indie publishing.  Still, Hit Reply is my personal favorite of all my titles, a book that truly came from my soul, and is dear to me.  It’s long out of print, but the publisher has kept it in Print on Demand for $18 for a paperback and (brace yourself) $16 for the ebook.  No surprise, it has sold four copies in the past year.

In my  burning desire to see this book published, I signed a contract that includes this line in the rights reversion clause:  “The book will be considered still in print as long it is available for purchase in any format, including electronic.”  This contract was signed in 2003.  And now, I can never, ever, ever have the rights back to my dear little book, at least not while I’m young enough to do something with them.

. . . .

It’s MY work.  They’re MY words.  These are MY characters who came from MY imagination and live in MY heart.  But, the publisher has informed me that they “don’t wish to revert THEIR rights.”  They’ve offered to do a special pricing for a short time if I would agree to promote the book.

Link to the rest at Roxanne St. Claire and thanks to Kristen for the tip.

Here’s a link to Roxanne St. Claire’s books

Judge wants $10 million set aside for possible award in Fifty Shades lawsuit

28 April 2015

From the Fort Worth Star-Telegram:

A state district judge wants $10 million in cash or investments to be set aside for a potential award after a Tarrant County jury ruled earlier this year that an Arlington woman was cheated out of royalties from the blockbuster novel Fifty Shades of Grey.

. . . .

A Tarrant County jury in February ruled that Hayward defrauded Pedroza out of the financial windfall created by the erotic New York Times bestseller which also inspired a movie by the same name.

. . . .

Pedroza sued Hayward last year, contending that she conned her out of her rightful partnership interests in advances and royalties.

Pedroza and Hayward, who lived in Dural, a Sydney suburb, were partners in The Writer’s Coffee Shop, which started out as an online blog in 2009, along with Waxahachie resident Jennifer McGuire. Visitors to the fan-based website discussed books and wrote “fan fiction” stories.

McGuire did design work for the blog, Pedroza uploaded contributors’ writing, and Hayward worked with the authors, court records show. Later, Christa Beebe, another Arlington resident, joined and helped with marketing and distribution.

By 2010, Pedroza and Hayward had the Coffee House operating as a publishing house. And in 2011 it published Fifty Shades of Grey, a romance novel by E.L. James, a British author, as an e-book and print-on-demand full-length book.

The company published the sequels, Fifty Shades Darker and Fifty Shades Freed, in 2011 and 2012. The Fifty Shades of Grey trilogy became an online sensation, selling 250,000 copies through e-book and print-on-demand, with another 20,000 print copies.

In 2012, Random House made a deal with Hayward and James to publish the books. Pedroza received a one-time payment of $100,000 after the Random House contract was signed, but she was never told of the full terms of the transaction. Random House was not named in the lawsuit.

The lawsuit acknowledges that the two Texans — Pedroza and McGuire — and Hayward never signed a prepared partnership agreement. But in 2011, The Writer’s Coffee Shop filed a partnership income tax return, naming Pedroza as a general partner, it says.

Pedroza contended in her suit that Hayward in 2012 secretly converted the Coffee Shop into a company she alone owned. The jury determined that there was a partnership between the women. Beebe settled her claims in December in a confidential agreement.

Link to the rest at Fort Worth Star-Telegram and thanks to Suzan for the tip.

As a general proposition, if two or more people start and operate a business together, the presumption will be that they have created a partnership unless they have an agreement signed by everyone to the contrary. The presumption can be rebutted, but the individual(s) who don’t want a court to find that a partnership existed have the burden of proving the business was something other than a partnership, that a person was an employee, for example, and not a partner.

Absent evidence to the contrary, all persons who are partners are entitled to a share of partnership profits.

When there’s no partnership agreement, the way the business was run, who was paid how much, statements the parties made about the business, emails,  tax returns, etc., will be used to determine who is entitled to what percentage of partnership profits. The default presumption is that partners will divide partnership profits equally.

Partnership agreements can be very simple documents. However, without such an agreement, signed by everyone, resolving disputes over who gets the money can be very expensive.

How to Spot a Rights Grab

25 April 2015

From The Book Designer:

Writers see the warnings all the time. Watch out for rights grabs, those contracts that transfer all rights to the writer’s work to some less-than-reputable publisher or self-publishing company. Without realizing it, the writer has given away the right to publish his or her book in print, ebook, audio, app, and all future formats, in all languages, worldwide, for the life of the copyright. Heartbreaking.

. . . .

The answer, of course, is read the contract before your hit Submit.

Daunting? Not if you know where to look. Instead of starting at the beginning of the contract, go straight to any paragraph called Grant of Rights, License, Permission, or Permitted Uses, and look for these Danger Words: Assignment and Exclusive.

If you see these Danger Words, you may not need to read any further.

Assignment

Legally speaking, a publishing contract is a license, meaning permission to use. The writer continues to own the copyright. In contrast, an assignment transfers complete ownership. It is rarely appropriate in publishing or self-publishing, except for a freelance or ghostwriting project if you understand upfront you are transferring all your rights and ownership in the work.

. . . .

Section 3. Assignment. Author does hereby irrevocably assign to Company and its successors all right, title, and interest throughout the world, in and to the Approved Entries, including without limitation, any copyrights and other proprietary rights in and to the Approved Entries in any media now known or hereinafter developed, and in and to all income, royalties,damages, claims and payments now or hereafter due or payable with respect thereto, and in and to all causes of action, either in law or in equity for past, present, or future infringement of such rights.

. . . .

An exclusive license can be as bad as an assignment.

As I said, a license is permission to use only; you, the creator, retain ownership of the copyrighted work.

Licenses may be worldwide or geographically restricted, short-term or perpetual, royalty-free or royalty-paying, limited to particular media such as audio books, print, e-books, or to a particular language, and most importantly, exclusive or nonexclusive.

If you grant a non-exclusive license, then you may grant the same rights to others at the same time. If you grant an exclusive license, you are agreeing not to transfer similar rights to anyone else.

A license is similar to a lease. Imagine you are a landlord of a shopping center, and you lease shops to various tenants. Their rent is based on how much they sell. Each shop lease is like an exclusive license granted to only one user. Other licenses, such as the right to use the parking lot, are non-exclusive.

Link to the rest at The Book Designer and thanks to James for the tip.

The OP does a good job of describing typical pitfalls.

PG will reiterate Joel’s advice to read the entire contract before accepting it. Yes, it’s no fun and will take some time, but, if it’s a contract for the life of the copyright and you agree to it, you’ll be living with that contract for the rest of your life.

You don’t need to read the entire contract in order to reject it, however. You should read it before you agree to it because the whole contract needs to be right or you should reject it. In an online situation where there is no negotiation of the contract terms, you’re looking for reasons to reject the contract, not accept it. If you find a reason to reject the contract, you’re done with your reading.

Online contracts are usually easy to search if you’re reading them in a browser. You might want to search for words like exclusive, copyright, irrevocable, grant, assign, royalty-free and license. You’ll need to read what you discover to see the context of those words. If you find something you don’t like, post an online warning to your fellow writers and go back to working on your book. You don’t need to read the rest of the contract.

If this technique doesn’t raise any red flags (it’s definitely not a fool-proof solution), you’re stuck reading everything.

 

Good Agents Geek Out About Contracts

2 April 2015

From The Huffington Post:

I recently watched a video of a panel discussion from the Backspace Writers Conference video archives in which Kristin Nelson of Nelson Literary Agency, Scott Hoffman of Folio Literary Management, Suzie Townsend (then of Fineprint Literary Management, now with New Leaf Literary), and Diana Fox of Fox Literary discussed the nuances of publishing contracts.

One of the things I learned is that publishers often change their contracts to give themselves more favorable terms. Agents who are paying attention pick up on the differences and understand the ramifications. Agents who aren’t, don’t.

As an example, the agents explained how a few year ago, Simon & Schuster removed four sentences from the end of the rights reversion clause. These sentences defined the sales threshold, which states that rights will revert to the author if the number of sales drops under a specified amount. Removing these sentences meant that if the publisher also bought digital rights, the book would in effect never go out of print, and the publisher would own the rights to the work in perpetuity.

This created a furor among agents who were paying attention. But not every agent caught the change. Some even let their clients sign the contract, then had to negate that contract and start over again. And some didn’t catch the change at all, which left their authors with no possibility of ever getting the rights to these novels back.

I also learned that agents “geek out” over contracts, as one agent put it. It’s a good thing they do, because as I listened to these agents enthuse over the finer points of contract details, my eyes glazed over. Not that the panel wasn’t interesting and enlightening — it was. Rather, I quickly realized that the nuances of contracts were so not my thing — like signing up for a study course and finding out two weeks in that you have zero interest in the subject.

Link to the rest at The Huffington Post

If agents are so good with contracts, why do virtually all publishing contracts from Big Publishing contain provisions that are so unfair to authors, whether represented by an agent or not?

PG threw in the “virtually” in the previous sentence by way of being lawyerly. He’s never actually seen a contract from Big Publishing that did not include unfair provisions, but perhaps one exists somewhere. In a virtual universe.

PG must have forgotten to take his anti-cynicism meds this morning. He needs to go look at pictures of unicorns for a bit.

Amazon makes even temporary warehouse workers sign 18-month non-competes

30 March 2015

From The Verge:

Amazon is the country’s largest and most sophisticated online retailer, but it still runs largely on manual labor. Scattered around the country are massive warehouses staffed by workers who spend their days picking objects off shelves and putting them in boxes. During the holiday season, the company calls on a huge reserve army of temporary laborers.

The work is repetitive and physically demanding and can pay several dollars above minimum wage, yet Amazon is requiring these workers — even seasonal ones — to sign strict and far-reaching noncompete agreements. The Amazon contract, obtained by The Verge, requires employees to promise that they will not work at any company where they “directly or indirectly” support any good or service that competes with those they helped support at Amazon, for a year and a half after their brief stints at Amazon end. Of course, the company’s warehouses are the beating heart of Amazon’s online shopping empire, the extraordinary breadth of which has earned it the title of “the Everything Store,” so Amazon appears to be requiring temp workers to foreswear a sizable portion of the global economy in exchange for a several-months-long hourly warehouse gig.

. . . .

“Employee recognizes that the restrictions in this section 4 may significantly limit Employee’s future flexibility in many ways,” the agreement asserts, referencing the section containing the noncompete agreement and three other clauses. “Employee further recognizes that the geographic areas for many of Amazon’s products and services — and, by extension, the geographic areas applicable to certain restrictions in this Section 4 — are extremely broad and in many cases worldwide.”

The contract — which was obtained through applying and being accepted to a seasonal Amazon warehouse position — even includes a provision that requires employees who sign it to “disclose and provide a true and correct copy of this Agreement to any prospective new employer […] BEFORE accepting employment[…]”

. . . .

It’s unclear whether Amazon has attempted to enforce its noncompete contracts with hourly warehouse workers, and Amazon did not respond when asked about this by The Verge. But the company does have a history of aggressively pursuing such cases against white collar workers. Last year, after a former Amazon marketing manager took a job at Google, Amazon leveled a suit against him that was said to test the limits of noncompete law. The willingness of courts to validate such agreements can vary dramatically across states. But regardless of whether courts are willing to enforce them, noncompetes can still affect workers’ behavior.

. . . .

Courts are often reluctant to enforce noncompete agreements that cover the entire United States, let alone the whole world, according to Garden, who notes that the standard of “reasonableness” is the main legal test of the agreements. Yet different states have far different ideas of what counts as reasonable. (In an apparent nod to this, the Amazon contract stipulates that the signer consents that “each and every covenant and restraint in this Agreement is reasonable.”) California law bans the enforcement of noncompetes. Oregon, North Dakota, and Colorado have also enacted strict limits on noncompetes. “Then there are states like Texas and Florida and a bunch of others that are on the other end of the spectrum,” says Lobel, “that think of it as a simple contract issue, and if you sign the contract and you breach it then, well, you’ve breached the contract, and they’ll enforce it, and they’ll give injunctions quite easily.”

Link to the rest at The Verge and thanks to Jan for the tip.

PG says the story sounds a little weird and you can count him as skeptical.

In the first place, while the laws vary from state to state, most courts considering noncompete agreements tend to apply a reasonableness test when asked to enforce them.

It’s difficult for PG to envision very many judges enforcing an 18 month noncompete agreement against a temporary warehouse worker. It’s also difficult to believe that courts would enforce a noncompete agreement prohibiting a former low-level hourly employee from working for a competitor within a large geographical area for a low level worker. As a matter of public policy, most state governments aren’t trying to prevent their residents from being gainfully employed.

In one case PG remembers, Amazon sued in Washington to enforce a non-compete against one of its vice-presidents in the Amazon cloud business who went to work for Google’s cloud business. If PG’s recollection is correct, the court hearing the case reduced the time for the non-compete from 18 months to 3 months. If the vice-president had continued to work during the litigation, the three months would have almost certainly expired before the court handed down its decision.

As mentioned, non-compete agreements are illegal in California except in very narrow circumstances. If Google had moved the VP to California and he sued Amazon in California, it is almost certain a California court would have voided the non-compete agreement and barred Amazon from enforcing it.

Additionally, there’s the practical question involved in Amazon ever discovering that one of its former warehouse employees has started working for a competitor. If you’re an Amazon vice-president that starts working for a competitor, your profile is high enough so Amazon is likely to hear about the new job. If you move from an Amazon warehouse to a Wal-Mart warehouse, the chances of being discovered are minuscule.

PG says that blanket noncompete agreements for all employees are a really dumb idea in part because gaining a reputation for suing its former employees hurts a company when it is recruiting high-quality talent. Amazon usually doesn’t do dumb things, but maybe their employment lawyers are an exception.

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