Monday, February 03, 2014

C Is For Non-Compete by Steve Laube

Steve Laube, a literary agent and president of The Steve Laube Agency, has been in the book industry for over 31 years, first as a bookstore manager where he was awarded the National Store of the Year by CBA. He then spent over a decade with Bethany House Publishers and was named the Editor of the Year in 2002. He later became an agent and has represented over 700 new books and was named Agent of the Year by ACFW. His office is in Phoenix, Arizona.

The following blog post is shared by permission from the Steve Laube Agency blog.

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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

1 comments:

Gina Holmes said...

Very interesting and balnced perspective. Thanks for this post!