C is for non-Compete

by Steve Laube

open-book banner

Both Tamela and Karen wanted “C” to stand for coffee or chocolate since both seen to be must-haves for any writer. Instead I’m going to fudge a little (pun intended) and write about the “non-Compete” clause in your contract. This clause has become the latest playground for negotiations.

Here is a simple version of a non-compete clause:

The Author will not publish or authorize the publication of any other work which would adversely affect the sale of the Work without the Publisher’s prior written consent.

Seems fairly innocuous, and it is. This publisher is basically saying “don’t write another book similar to this one.”

Take a look at this language from another publisher’s contract:

Author will neither publish nor authorize the publication anywhere of any Competing Work, including any Competing Work co-written by Author, in any form equivalent to a Physical Version, Digital Version, or in any form hereafter devised. A “Competing Work” shall be any work on the same or similar topic contained in the Work, treated in the same manner and depth, and directed to the same audience.

Imagine you have written a book about anger in the workplace and then later want to write about anger as a parent for a different publisher. Are those “competing” works? Would the second adversely affect the sale of the first?

Now take a look at this non-compete language from a third publisher:

Author agrees he will not undertake without the written consent of Publisher, to write, print, publish, produce, or cause to be written, printed, published, or produced, (alone, in conjunction with others or through any other arrangement) anything for publication in book form before the work has been delivered. Author will not, without written consent of Publisher, write, print, publish or produce, or cause to be written, printed, published or produced, during the continuance of this Agreement, any other edition of said Work, any work derived from the Work, or any other work in any form tending to compete or interfere with or injure the sale of the Work in any manner.

Each succeeding example above becomes a little more complex and a little more protective. What is the publisher trying to protect? A few years ago this wasn’t that much of an issue, so why has it now become so difficult?

A couple years ago the story circulated about Kiana Davenport who had signed a deal to publish her novel with Penguin. The publisher found out she later self-published some short stories on Amazon.com (after signing the contract with Penguin) and declared her in breach of her contract under the non-compete clause, cancelled her contract, and demanded the advance be returned. (Her story is found here.) She later signed a book deal with Amazon Publishing.

I know of an author who was under a long term contract with a publisher but needed to find a new source of writing income. The author went to the publisher to ask for permission to pursue writing elsewhere because the current publisher could not publish the new material on top of the current projects. The author was told “no.” And the author was stuck.

Another author was in a similar position but didn’t ask the publisher, this author asked the agent for advice. The author wanted to send out new trade book proposals to the industry and shop for an extra source of income despite the fact that the new proposal was a historical novel and the current contracted books were also historicals (different time periods but still historicals). The agent said that would not be a wise course and suggested some other viable alternatives. The author was very upset.

Another author told their agent “I have some old manuscripts in my drawer. I’m going to toss them into the Kindle format and upload them myself and see what happens.” The agent was concerned about this cavalier approach and a conflict ensued.

These three examples all speak, in part, to the issue of non-compete.

What is the Publisher Protecting?

Originally the non-compete clause was there to prevent the author of writing the same book twice and publishing it with two different publishers.

That is not the only concern now. One concern is the publishers desire to protect a sales window around the release or publication date of the book so that the market is given a clear shot at this one title from this one author. They are, in essence, protecting their investment in the launch of that book.

Another concern is the ease of digital self-publishing. The author with the manuscript in the drawer could end up competing with their new traditionally published book.

This past week a client’s old publisher came to us with the idea of giving away one of her earlier novels as a promotion to sell her other older titles. They were hoping to do it this Summer. We asked that they wait three months because this Summer is the new release of her latest novel with her new publisher. Her old publisher agreed to wait and the sales window for her new novel was preserved.

Imagine if that situation was the author’s independently produced novel being given away for free the same week as her new release with a major publisher.

What is the Author Protecting?

Some authors kick against these restrictions, especially if they are a prolific writer. Some claim this is a matter of restraint-of-trade. And they have a point. If an author can create six new novels a year there are few publishers who can handle that output. Even three a year is a lot for some major houses to market properly.

Sometimes it isn’t the publisher who is slowing the author down. It is the stores who resist the frequency of books from one writer. I know of one author whose publisher was told by a number of key accounts that they were not going to buy the author’s newest book because the previous one had come out only three months earlier. The publisher’s release plans were stymied.

The author is protecting their artistic freedom and their fiscal freedom to earn a living. If the full-time author receives a $15,000 advance from the publisher and writes one book a year that is equivalent to $7.21 per hour (for the typical 40 hour week) before taxes and expenses. [Current federal minimum wage is $7.25 per hour.] Obviously the math makes writing full-time a challenge. If the publisher uses the non-compete as a hammer in this situation the author is in a tough situation.

If that same author is receiving $15,000 advance and writing two books a year the picture is different. But if the publisher decides to slow down the publishing schedule for whatever reason, the author’s income is slowed as well (a fact many publisher’s forget in their in-house deliberations).

What is the Agent Protecting?

We represent the interests of the author. Period. But at the same time we understand the interests of the publisher and work to find a solution that works for everyone. We work on this clause on nearly every contract we negotiate. Does this mean we can get that clause removed? No but we can find ways to limit its scope and yet still satisfy the protection the publisher desires.

This is can be a volatile topic. I hope my attempts here have helped you understand this area a little better. Earlier this year Agent Rachelle Gardner addressed some of these issues in two articles. Make sure you read both because she was misunderstood when she wrote the first one:
Will My Publisher Let Me Self-Publish Too?
Agents Represent Authors

20 Responses to C is for non-Compete

  1. Ron Estrada June 10, 2013 at 4:20 am #

    Thanks, Steve. So should an author or agent always check with their primary publisher before publishing anything else? I’ve written some outdoor articles for magazines as well as a regular column in a local women’s magazine (it’s called “Don’t Tell my Wife I Wrote This” — I like life on the edge). If I were to continue those types of articles and columns, do I need to mention that up front to the publisher of my fiction?

    • Steve Laube June 10, 2013 at 9:40 am #

      Ron,
      Excellent question. My answer is two-fold.
      1) the publisher non-compete refers to book-length projects, not magazine articles. A simple way of thinking about it is that magazines to not compete with books. The consumer is buying the magazine as a whole, not necessarily the author whose work appears in that magazine.
      2) However, you should make sure there isn’t a non-compete clause in your magazine agreements.

      As far as disclosing your column and magazine writing? I would most definitely include your writing history in the bio section of your book proposal. Even if it is unrelated to your novel. It shows you are an active and published writer. A complete list of all articles would be unnecessary, but talking about your column and other successful writing projects is a good thing.

      Steve

  2. Andrea Cox June 10, 2013 at 6:30 am #

    Steve, you made this complex topic easy to understand, and that’s saying a lot, coming from me. I usually don’t get the legal stuff easily.

    I must say, I’m glad I write and am not an agent myself. I just gained a new and improved appreciation for what you guys do. Thanks for being the so-called middle man for your clients! I can imagine how easy you make the process for those you represent.

    Blessings,
    Andrea

  3. Meghan Carver June 10, 2013 at 7:34 am #

    The complications of the law, I think, are part of the reason we need coffee and chocolate. I would think that other releases from the same author, as long as they don’t infringe on the launch time, would only help overall sales. But looking at it from the publisher’s perspective, I can see why they would want a compete clause. Another reason to seek a good agent!

  4. Virginia June 10, 2013 at 8:48 am #

    This was a great article (found it through a repost on facebook). I recently went through the non-compete issue with my publisher. I approached them about a book I had been hoping to sell to another publisher before I contracted with them. It was longer and more complex than their usual fare. The editor still requested to see a partial, including synopsis, but returned it a few months later saying they would pass. *whew* It will join my self-published list and everyone is happy!

  5. Jeanne Takenaka June 10, 2013 at 10:03 am #

    For the record, I really like the way Tamela and Karen think—chocolate and coffee are must-haves for a writer. :)

    I’ve heard about non-compete clauses before, but your description makes it so much easier to grasp. Seeing it from the publisher, author and agent perspective is enlightening. I guess this is yet another reason to have an agent on my side. ;)

  6. James Scott Bell June 10, 2013 at 11:47 am #

    Well stated, Steve. I am a writers advocate. I like writers who work hard at their craft getting paid for their work. Self-publishing is a new and exciting way to get paid. Partnership with a traditional publisher is also an option, and when that happens the writer is contractually and ethically (IMO) bound not to put out a product that will directly compete with and undercut the partnered product. A good, fair non-compete clause is essential for both parties, and I think can be worked out in most cases.

  7. Pamela Tracy June 10, 2013 at 1:02 pm #

    Very clear. Thanks for the information.

  8. Alana Terry June 10, 2013 at 3:07 pm #

    Thanks, Tamela. I followed Rachelle’s two posts about competing clauses as well. It was an industry issue I hadn’t thought about before. I have a kid series through a small-press with a non-competing clause, but thankfully my publisher is quite supportive of my work self-publishing adult Christian fiction. I was so glad to get the contract I would have signed it no matter what the wording said, so I feel lucky to not have run into problems in this area.

  9. Peter DeHaan June 10, 2013 at 3:38 pm #

    In all three contract examples, the publisher decides if permission will be granted — and knowing that it’s always safer to say “no” instead of “yes,” the authors are at their publishers’ mercy on non-compete clauses.

    • Steve Laube June 10, 2013 at 3:45 pm #

      Peter,
      Yes, to an extent that is true. Which is why we try to negotiate the scope of the non-compete so that it does not interfere with an author’s career plans.
      As Jim Bell commented here earlier, “A good, fair non-compete clause is essential for both parties, and I think can be worked out in most cases.”

  10. Anne Braeburn June 10, 2013 at 6:38 pm #

    –or in any form hereafter devised(?!) Yikes. You guys earn your money.

    • Steve Laube June 10, 2013 at 6:57 pm #

      Anne,
      Actually that language is becoming a fairly standard umbrella to cover technological inventions. Many publishers were caught by not having a clause that covered e-books.

      And in the music business going from the LP to the cassette to the 8-Track to the CD to the mp3 happened awfully fast and left some without the ability to sell certain products.

      • Anne Braeburn June 10, 2013 at 8:39 pm #

        Good to know. Thanks for all the info, Steve.

  11. Sherri June 11, 2013 at 5:24 am #

    How does publishing/digitizing a backlist (if the author has regained the rights) fit into the non-compete clause?

  12. Rachel Muller June 12, 2013 at 4:04 pm #

    Thanks, Steve! That was very cut-n-dry. Glad to have a break down of the clause.

  13. Norma Horton June 14, 2013 at 5:42 am #

    Steve: Thanks for another excellent post regarding the business end of publishing. Contracts—regardless of the industry—are to be taken seriously, and the expense of defending oneself against a breech isn’t to be underestimated.

  14. Ali Morris June 16, 2013 at 8:23 pm #

    Fantastic post. Very clearly written which is always a bonus when writing or reading about contracts and clauses. I am unpublished and have never been in this situation, but I feel better armed with posts like this. Thanks.

  15. Lisa researching non compete agreements December 29, 2013 at 1:53 pm #

    Thanks for breaking this down in easy to understand terms. I have found that it pays to read over non compete agreements very carefully, and if you are not comfortable with the wording, DO NOT sign it as is. Either suggest edits before signing, or just refuse altogether. Appreciate the great post!

Trackbacks/Pingbacks

  1. Is Traditional Publishing a Scam? -- Indie Author Guidebook, Part 2 - June 25, 2013

    [...] Once again, I tried to choose my words carefully, because this is a minefield. “The purpose of a non-compete clause is to protect the publisher’s investment in you as an author. Traditional publishers will typically invest tens of thousands of dollars in your book. If you do something that damages their investment, then they get very upset. My friend, agent Steve Laube wrote a nice blog on that just recently.” [...]

Leave a Reply

Your email address will not be published. Required fields are marked *