101 Things Your Publisher Doesn’t Want You To Know: The Non-Compete Clause
Today we’re going to go over a dirty publisher trick: the non-compete clause.
…a term used in contract law under which one party (usually an employee) agrees to not pursue a similar profession or trade in competition against another party (usually the employer). As a contract provision, a CNC is bound by traditional contract requirements including the consideration doctrine. The use of such clauses is premised on the possibility that upon their termination or resignation, an employee might begin working for a competitor or starting a business, and gain competitive advantage by abusing confidential information about their former employer’s operations or trade secrets, or sensitive information such as customer/client lists, business practices, upcoming products, and marketing plans.
So how does that work with a freelancer?
For the most part it doesn’t, which is why when you see one of these stink bombs in your freelancer agreement, you really need to give it a closer look.
I’ve had a number of young creators come to me over the years who were so intimidated by this clause in their contracts that the creators had turned down work repeatedly for fear of violating this agreement – even after they were repeatedly told it was not legal! Some have even gone so far as to ask the client’s permission to take on other work! In some cases, the client has refused to let the creators take many jobs, even though the ex-client had not hired the creators in five years or more.
Non-compete clauses are usually intended for employees who have access to confidential information which could harm their former employer’s business. The force of the clause is not only limited by geographical area, but time and scope, and the court must find that those considerations are reasonable.
For example, if you worked at a pizza joint and had access to the amazing secret sauce recipe, you could be restricted from opening up a shop next week right across the street and selling pizza using that recipe.
Here’s a letter I sent to a freelancer who inquired about a client who was trying to stop them from working for other clients four years after they had freelanced for him. The freelance job lasted only a few weeks. The client wanted to enforce the non-compete clause up to seven years. It’s also a matter of public record that this client does not create much of his own work.
You had no access to confidential information, you cannot reveal any trade secrets of his. You did not work in his office. You did not have access to his private files.
Non competitive clauses have geographical and time limits and cannot restrict one’s ability to earn a living. The purpose of the agreement is to protect an employer against your revealing confidential information. What confidential information? The book is published, and — can’t even draw his own work. What are you going to reveal? The mystery of his lack of talent?
—‘s contract had huge time limits…seven years and more! No way! Almost NO state in the entire country considers anything beyond two years reasonable. If I recall the time limit, and the last time you worked for — correctly, you are well past that.
The fact that you were never an employee and had no access to trade secrets should invalidate the whole clause, frankly. That’s how we dealt with it, and the weasel couldn’t do a thing about it. If he can’t show requisite loss, and he can’t show what secrets you are supposed to have absconded with, he doesn’t have squat.
You are not even in his state. You’re in another COUNTRY. Makes it especially hard to complain about the geographic competition thing.
—‘s attempt to enforce this would be a restraint of trade. No doubt in my mind.
This client wanted to restrict freelancers from working on ANYTHING that was in the same style as anything he had ever published, regardless of whether the freelancer had worked on those projects or not!
If the artist worked on Book A, and he published Book B, he wanted to keep freelancers who worked on Book A from working on anything like Book B, even if Book B had been published ten years before the freelancer had ever worked with the client!
He also wanted to restrict freelancers from appearing in public, on television, teaching, lecturing, and a long list of other things that freelancers do as a matter of course to supplement their art income!
So not only could they not paint or draw in the same style as anything he had published, they could not talk to people about their work! At least, not without his permission, which he often refused to grant. It’s a little hard not to work on books in the same style when the style is manga art, to which this client had no business staking a personal claim.
It’s not like this white guy invented manga or anything.
This clause effectively put some freelancers out of work, because they simply did not know that the non-compete clause they had signed was illegal.
Ladies and gentlemen, I beg you. Please get good legal representation for yourselves and never, ever listen to legal representatives for your client. They are paid to represent your client, not you.
Yes, the client’s lawyer will lie to you. They will drop things into that contract which are unenforceable by law. They will do whatever they have to do to get you to sign something to their client’s advantage. It’s their job.
Their lawyer is paid to tell you whatever they think they can get away with. Your lawyer is paid to tell you what your rights are.
You can get a low cost attorney through the Volunteer Lawyers for the Arts, and if you don’t qualify for free assistance, they can direct you to an attorney who can help you. If you are in serious need of legal aid, try clicking on my LEGAL tab for more info, or contact me directly. I will see what I can do to help you.