DISCLAIMER:
Under no circumstances should the information contained in this blog post be
considered legal advice or instruction. While Red Quill Editing, LLC, holds the
copyright on this blog post, should you wish to print this out and take it to
your attorney, please feel free to do so. In fact, it is hoped that you will do
exactly that and that the information in this post will help you formulate
questions to address with your legal advisor.
By
now, most of us in the literary industry are aware on some level of the fact
that small publishers have been going under right and left, and several others
are on or may very well be close to the brink of going under. Some or all of
the authors contracted to these houses are not being paid the royalties they
are due. Some of the editors contracted to these houses have not been paid for
the work they’ve done. Some authors are having trouble regaining
the rights to their books when a publisher goes out of business, or worse, files for bankruptcy.
I’ve
been self-employed for over 25 years. As such, I have a more than passing
familiarity with contracts and contract law. Even though I’m happy to review publishing contracts and offer personal opinions, and even advice based on personal and professional
experience, I am not a lawyer. I never played one on TV, and I didn’t stay at a
Holiday Inn Express last night or any time in recent memory. That said, I have clients, friends and colleagues in the literary industry, and we have ranted, discussed,
and otherwise dissected some of the issues that will be addressed below.
What
follows was written by an attorney friend who specializes in contract law, in
particular, as it pertains to government contracts, some of which involve
multiple jurisdictions. He has asked to remain anonymous (it’s an ethics thing
akin to doctors not giving medical advice anywhere but in their offices or in
the hospital setting), but he very graciously wrote the article that follows.
It is included here verbatim with his permission. He also reviewed and approved this post in its entirety prior to publication. There will also be links at the end of this blog
post to help you with more information.
As creative types, we want
people to like us. And we want people to like our creative products, whether
it’s red hot romance fiction, the Mona Lisa, or a macaroni sculpture. But when it all
comes down to it, what we really want is a check. And ideally, a check that
clears the bank.
Sometimes, businesses get
on shaky ground when it comes down to paying the bills. As an author, you have
to take steps to protect your rights. Allow me to give some general principles
of law that should serve as a guide for beginning to protect, and possibly
assert, your rights.
First things first. READ THE CONTRACT. What does it
say? Things to immediately look for include payment terms (what/when/how much
will you get paid) and intellectual property rights (copyright — who owns your
work). Lawyers will also look for choice of law and venue provisions. Choice
of law means what state/country’s law will govern enforcement of the contract. Venue means which
court(s) will hear claims. In theory, the two may not be the same, and they may
not even reflect the locations of either party. But understand that, in most
cases, you’ll be held to these provisions. In other words, if the publisher is
in California and you’re in Arkansas, but the contract says that venue is in
the district courts of Lubbock County, Texas, and that New York law applies —
well, you’ll be flying to Lubbock to file suit (or retaining an attorney in Lubbock to file on your behalf), and the judge will be applying
New York law. Another thing to worry about is the contract being so one-sided
that it’s obviously written only to benefit one party. Courts call these contracts
of adhesion and the Court is sometimes willing to set these contracts aside.
It’s going to require going to court. And that means hiring a lawyer.
Now, what happens when/if
you see the writing on the wall and it looks like the party you’ve contracted
with is “going under.” What happens and what do you need to do?
First things first. You
need to get your money — or as much of it as you can. When the contract says
you’re supposed to be paid, you should be paid. And if you’re not, the other
party may be in breach. The remedy for breach is simple — file a lawsuit.
Where? Now you see why you need to look at the venue clause in the contract. If
there is no venue specified, you may be able to file a suit either in your
location or the other party’s location. These are things you’ll want to discuss
with...you guessed it...an attorney.
Okay, you’ve filed
successfully, won in court and have your judgment. Now what? You’ve got to
collect on that judgment. Again, a matter for you and your attorney. And yes,
sometimes it’s going to cost money to collect.
Having said all of this,
why do you want a judgment? And isn’t there an old saying about a judgment
being worth the paper it’s printed on? Yes, very true.
But…
When a business faces
insolvency, they may file for protection under the Federal bankruptcy laws.
Think of bankruptcy as being like an organized winding up or reorganization of
the business. Almost like an estate sale conducted by the court—actually the
bankruptcy trustee acting under the court’s direction. Remember the scene in Mel Brooks’ History of the World: Part I when he says, “It’s good to be the
king?” That’s not a far cry from what a bankruptcy judge’s powers
are. In short, the judge and the bankruptcy trustee exist to pool the
assets together to maximize the payments to the creditors. Assets include
almost everything the debtor owns, including intellectual property (such as
copyrights) and contracts. (Remember why I warned you to read the
contract?) BUT if you have a judgment, you’re more likely to be
considered a creditor than an asset. And in a bankruptcy, that’s
a—relatively—better place to be. Also, another thing to note is that a
bankruptcy case freezes all lawsuits pending against the debtor.
That’s called the automatic stay.
So, what are the takeaway
points from all of this?
First, read the
contract.
Second, if the other party
has breached the contract, talk to a lawyer and consider filing suit.
Third, definitely look at
the second piece of advice before the other party files
bankruptcy.
Finally, there is zero
shame in speaking with or hiring a lawyer. No one else but you, and ideally your lawyer, is going to
look out for your interests.
Saya
here: It is extremely unfortunate, but threats and attempts at intimidation have been used against those who are willing to speak out about what has happened and is happening. Don’t give any weight to threats or attempts at intimidation. You have
rights, and once you have engaged an attorney, your rights will be protected.
Remember, too, that you are not alone. There are others in the same situation.
Communicate with each other. In this age of social media, you can find others
in your same situation. When you do find those others, consider getting
together and hiring an attorney to represent you as a group. (Shared expenses are easier on everyone's bank account.)
In the event you are able to get your rights back, there really are outstanding small press houses out there. Don't hesitate to ask around. Editors, put the word out that you are available for freelance work. There is always work out there for good editors.
A
piece of advice based on personal experience: You might be able to file your suit in small claims court in the specified venue in your contract if
the money you are owed is less than a certain amount. It never hurts to look
into this option. Some small claims courts do not require lawyers for filings. You can find information online for the small claims court in
the venue specified in your contract.
Bottom
line here: You put your blood, sweat and tears into that book you wrote and you
deserve to be paid as promised. If the publisher you contracted with cannot or
will not pay you, you deserve to get your copyright(s) back.
Here
are some links for more information. Some of these will contain links to help
you with even more information.
A
compilation of some excellent articles on recent issues within the industry with
excellent advice:
What
happens when a publisher files bankruptcy:
Some insight on what the
bankrupt (or potentially bankrupt) publisher may be thinking about with regard to your judgment:
Can you collect on your
judgment?
More information on creditor
rights in bankruptcy:
Excellent article! Thank you!
ReplyDelete