From the Archives: The Business of Editing: Noncompetition Agreements

(The following essay was originally published on
 An American Editor on January 29, 2014.)

As I have discussed in the past, I rarely am asked to sign a contract. Yet lately it seems that an increasing number of packagers are asking for contracts. The terms are one-sided and onerous, and in some cases want me to agree to be bound by the law of a country to which I have never been and with which I have no legal or cultural connection.

But there is one particular clause that I find to be especially irritating, and unlike sand in an oyster, does not produce a pearl. I am referring to noncompetition clauses.

I am a freelance editor. By definition it means that I have more than one client. If I have only one client, the IRS is likely to look askance at my claim to being a freelancer and call me an employee, something neither I nor my clients want. Consequently, I sometimes wonder if my clients are confusing noncompetition clauses with nondisclosure clauses, although they assure me they are not.

The illogic of the noncompetition agreement is that clients are unwilling to divulge their client list. How can I possibly know who I should not solicit as a client because of such an agreement if I do not know who the packager wants me to not solicit? The answer is, all too often, that the packager basically wants me to stay away from everyone who could possibly provide me with work except them — even though they are unwilling to commit to giving me more work than the current project.

More importantly, from their perspective, I would think, is the possibility that the IRS would ask why a freelance book editor, someone who is supposedly not an employee of the packager, be required to sign a noncompetition agreement when by the very nature of being a freelancer, I am in competition with the packager, at least to the limited extent of the limited number of services I provide. The normal situation is that an employee who is leaving the packager’s employ would be asked to sign a limited noncompetition agreement because it would be expected that the leaving employee is leaving with knowledge about the employer’s clients and business.

I have raised this issue several times with those who ask me to sign a noncompetition agreement. I have even suggested that we submit it to the IRS for an advisory opinion, because if I am going to be made an employee, I want to bargain for all the benefits. Not only has there been a general refusal to discuss the matter, there has been universal refusal to get that IRS opinion. I am not surprised.

For the purpose of the noncompetition agreement, it is editing that is the subject matter. These agreements need to spell out exactly what areas I cannot compete in (which they do not), and it basically has to be limited to the services I actually provide the packager (again, which it is not), that is, limited to editing.

But then the packager would need to attest that my editing services are unique and particularly valuable. If they are run-of-the-mill, they cannot be restrained by a noncompetition agreement. When I raise this point, I ask if the packager intends to pay me a premium for my services, so that it would be clear that they value my editing skills much more than the skills of any other editor, which might make my editing skills unique, not run-of-the-mill. Alas, that has not yet occurred — but I keep trying.

Part of the problem is that some lawyer somewhere has given the packager a bunch of papers for freelancers to sign without stressing that the forms are appropriate for certain types of work but not for others. The people who do the freelance hiring at the packagers are told to have the freelancer sign the forms and so they become insistent, and impervious to any suggestion that the forms (or clauses) are inappropriate for the work I am being hired to perform.

So that puts us at a stalemate: the packager won’t hire me without my signing and I won’t sign.

I know that some of you are saying “just sign, get the work, and move on.” The problem is that there may be nowhere to move to. If I sign a noncompetition agreement without knowing who I am to avoid and without narrowing down the services involved, I could be putting myself out of business. The usual case is that the packager and I both often do work for the same client. Think about a publisher the size of McGraw-Hill, Pearson, Wiley, or Elsevier. They produce thousands of books and journals every year and have numerous divisions. How unusual do you think it is for both a packager and an editor to work with one of them? But if the packager’s agreement is signed as presented, you may be precluding yourself from working with such companies.

Besides, why should such a limiting agreement be signed without appropriate compensation? If you give up valuable rights, in this instance, the right to work with clients you may have worked with for years, should you not be compensated?

I am constantly amazed by editors whose job it is to deal with words, language, and meaning, yet who will blithely sign contracts without considering the ramifications of signing. Just as I give the manuscripts I work on a careful read and think about what message is being communicated, so I do the same on my own behalf when it comes to signing contracts for editing work.

Would you agree not to edit a spy novel in the future because you are being hired to edit one today? Sign a noncompetition agreement and you might be saying exactly that. Would you agree not to edit a book on pediatric medicine for McGraw-Hill because you edited one for Elsevier three years ago? You might be agreeing to that.

The point is that you need to read noncompetition agreements very carefully. You need to be sure that its scope is very narrow and that all of the entities you are not to approach are identified. Even more importantly, you need to negotiate compensation for the rights you are giving up. Finally, I would think about whether signing the agreement would change your status from freelancer to employee in the eyes of the IRS. Because I am averse to signing such agreements, I make it clear that I plan to send the agreement to the IRS for review. So far, that has been enough to have the agreement disappear without my signature.

Richard Adin, An American Editor

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Editing for a Client’s Direct Competitor

Ethics are a set of principles that govern and define “right conduct.” They are the rules or standards that govern one’s conduct. And that is where the editing profession separates from many other professions — e.g., law, medicine, accounting, even securities sales — the editing profession does not have a set of standards or rules of conduct against which we are measured and for which we are held accountable. This is a major failing of the editing profession; it is a failing that if corrected — by which I mean not only is there a standard code of conduct with authoritative interpretations, but there is also a means of enforcement — would, I think eliminate many of the “ethical” problems we encounter and make us more professional and valuable in the eyes of our clients.

In the absence of such a code, there is only peer pressure and guidance when questions arise. Instead of addressing our questions to a recognizable authority whose decisions would bind us, we resort to posting our questions in numerous online forums, and accumulate answers from a variety of people whom we do not know.

And so I add to this confusion.

The questions

A colleague asked whether it is ethical to accept editing work from a direct competitor to the colleague’s primary client. The competitor publishes the same type of publication in the same field and on the same topics as the primary client. The questions my colleague had were these:

1. Can I accept the proffered work from the competitor?
2. If I accept the work, do I need to tell either the competitor or the client or both that I have accepted work from the other?
3. If I work for a packager who has several of the same clients as I have, am I obligated to reject direct offers of work from those clients?

As is true of most questions of ethics, there are more questions that arise from these scenarios that can be asked. These questions, however, provide us with a fine start.

Can I accept the proffered
work from the competitor?

I begin with the supposition that the person asking the question is a freelancer. My answer would be different if the asker were employed by one of the parties.

The very essence of being a freelancer is that I work for multiple clients, many of whom have overlapping products. My clients recognize this and do not put obstacles in my path designed to limit with whom I can contract. (Some packagers are notorious for attempting to do precisely this — limiting whom a freelancer can contract with — by requiring noncompetition contracts. For a discussion of these contracts, see “The Business of Editing: Noncompetition Agreements.”) It is part of the “grand bargain” between freelance editor and publishing client.

There is also a practicality involved. If Jones and Davis have written a book for Publisher X on the history of penguins in the American Civil War, and Smith has also written a book for Publisher X on the same topic, and you have been asked to edit both, there is no obvious reason why you shouldn’t take both projects (assuming they meet your other criteria for project acceptance). It is unlikely, in the absence of plagiarism, that the two books will be the same below the surface of general subject matter. All else being equal, there is no ethical reason why you couldn’t edit both books.

Suppose the Jones and Davis book was being published by Publisher X and the Smith book was being published by Publisher Y and you have been asked to edit both books. The only thing that has changed is that instead of a single publisher there are two competing publishers. All else being equal, there is no ethical reason why you couldn’t edit both books.

The point is that in publishing, except in the case of plagiarism, no two products are identical; they may be similar, but they are not identical. Consequently, there is no reason why you cannot accept work from multiple publishers. In the same vein, every publisher competes with every other publisher in the sense that they are all publishers. But freelancers are expected by the publishers to work with multiple publishers; in fact they want that because to do otherwise raises the question of whether you are a freelancer or an employee — just ask the IRS.

If I accept the work, do I need to tell
either the competitor or the client or both
that I have accepted work from the other?

There is no ethical obligation to disclose to other clients who your clients are. Just as your clients would not disclose to you whom they are hiring to edit their books or the amount they are actually paying a particular freelancer, you are under no obligation to notify your clients of new clients.

The easiest way to think about this “obligation” is to think in terms of whether the IRS would consider required disclosure to be a sign of an employee. The more control a publisher exercises over your business dealings with others, the less of a freelancer you are. If you are truly an independent business, you have no obligation — legal or ethical — to disclose your clients.

Besides, what would be the value of disclosure to the client of accepting work from a competitor? Remember that your client has no obligation to send you a specific amount of work or any work at all. Consequently, today’s client may be tomorrow’s past client. Disclosure serves no purpose.

Just as you have no ethical obligation to disclose the competitor to your client, you have no ethical obligation to disclose the client to the competitor. Except as a statement to demonstrate experience in the field, disclosure serves no purpose for the competitor.

If I work for a packager who has several
of the same clients as I have, am I obligated
to reject direct offers of work from those clients?

Here the answer is a little trickier. If you have signed a noncompetition agreement, then the answer is “maybe.” If you have not signed such an agreement, the answer is no.

Few copyeditors sign noncompetition agreements and when they do, the agreement is usually limited to clients of the packager that are not already clients of the freelancer. (If the clients you are not supposed to solicit work from are not specifically named in the agreement, then you should absolutely refuse to sign the agreement. Importantly, you should make sure that none of your current or past clients are included as a named client.) Some less-scrupulous packagers refuse to name specific clients that you are not to solicit work from and insist the agreement covers any of the packager’s current, former, or future clients. If you have signed such a blanket agreement, then you need to reject offers that do not come through the packager.

In the absence of such an agreement, there is no reason why you should reject such proffered work. Nor is there a reason why you should only accept work that comes through the packager. Remember that you are an independent business. That you have overlapping clients is just part of being in business in the same field.

Deciding ethical questions

Ethics are moored in one’s view of what is honest and just, tempered by what is necessary and, in the case of the independent business, what is businesslike. Because we have no universal code of ethics and conduct, what is ethical is left up to each of us to determine. However, there is nothing wrong with asking: “What would [insert name] do under these circumstances?”

It is also okay to ask colleagues you know and trust, especially those who you believe exercise good ethics. I do not think that ethics is a matter of voting, which is often what asking a question on a public forum amounts to. Being ethical is doing right. It is as simple as that.

What do you think?

Richard Adin, An American Editor

The Business of Editing: Noncompetition Agreements

As I have discussed in the past, I rarely am asked to sign a contract. Yet lately it seems that an increasing number of packagers are asking for contracts. The terms are one-sided and onerous, and in some cases want me to agree to be bound by the law of a country to which I have never been and with which I have no legal or cultural connection.

But there is one particular clause that I find to be especially irritating, and unlike sand in an oyster, does not produce a pearl. I am referring to noncompetition clauses.

I am a freelance editor. By definition it means that I have more than one client. If I have only one client, the IRS is likely to look askance at my claim to being a freelancer and call me an employee, something neither I nor my clients want. Consequently, I sometimes wonder if my clients are confusing noncompetition clauses with nondisclosure clauses, although they assure me they are not.

The illogic of the noncompetition agreement is that clients are unwilling to divulge their client list. How can I possibly know who I should not solicit as a client because of such an agreement if I do not know who the packager wants me to not solicit? The answer is, all too often, that the packager basically wants me to stay away from everyone who could possibly provide me with work except them — even though they are unwilling to commit to giving me more work than the current project.

More importantly, from their perspective, I would think, is the possibility that the IRS would ask why a freelance book editor, someone who is supposedly not an employee of the packager, be required to sign a noncompetition agreement when by the very nature of being a freelancer, I am in competition with the packager, at least to the limited extent of the limited number of services I provide. The normal situation is that an employee who is leaving the packager’s employ would be asked to sign a limited noncompetition agreement because it would be expected that the leaving employee is leaving with knowledge about the employer’s clients and business.

I have raised this issue several times with those who ask me to sign a noncompetition agreement. I have even suggested that we submit it to the IRS for an advisory opinion, because if I am going to be made an employee, I want to bargain for all the benefits. Not only has there been a general refusal to discuss the matter, there has been universal refusal to get that IRS opinion. I am not surprised.

For the purpose of the noncompetition agreement, it is editing that is the subject matter. These agreements need to spell out exactly what areas I cannot compete in (which they do not), and it basically has to be limited to the services I actually provide the packager (again, which it is not), that is, limited to editing.

But then the packager would need to attest that my editing services are unique and particularly valuable. If they are run-of-the-mill, they cannot be restrained by a noncompetition agreement. When I raise this point, I ask if the packager intends to pay me a premium for my services, so that it would be clear that they value my editing skills much more than the skills of any other editor, which might make my editing skills unique, not run-of-the-mill. Alas, that has not yet occurred — but I keep trying.

Part of the problem is that some lawyer somewhere has given the packager a bunch of papers for freelancers to sign without stressing that the forms are appropriate for certain types of work but not for others. The people who do the freelance hiring at the packagers are told to have the freelancer sign the forms and so they become insistent, and impervious to any suggestion that the forms (or clauses) are inappropriate for the work I am being hired to perform.

So that puts us at a stalemate: the packager won’t hire me without my signing and I won’t sign.

I know that some of you are saying “just sign, get the work, and move on.” The problem is that there may be nowhere to move to. If I sign a noncompetition agreement without knowing who I am to avoid and without narrowing down the services involved, I could be putting myself out of business. The usual case is that the packager and I both often do work for the same client. Think about a publisher the size of McGraw-Hill, Pearson, Wiley, or Elsevier. They produce thousands of books and journals every year and have numerous divisions. How unusual do you think it is for both a packager and an editor to work with one of them? But if the packager’s agreement is signed as presented, you may be precluding yourself from working with such companies.

Besides, why should such a limiting agreement be signed without appropriate compensation? If you give up valuable rights, in this instance, the right to work with clients you may have worked with for years, should you not be compensated?

I am constantly amazed by editors whose job it is to deal with words, language, and meaning, yet who will blithely sign contracts without considering the ramifications of signing. Just as I give the manuscripts I work on a careful read and think about what message is being communicated, so I do the same on my own behalf when it comes to signing contracts for editing work.

Would you agree not to edit a spy novel in the future because you are being hired to edit one today? Sign a noncompetition agreement and you might be saying exactly that. Would you agree not to edit a book on pediatric medicine for McGraw-Hill because you edited one for Elsevier three years ago? You might be agreeing to that.

The point is that you need to read noncompetition agreements very carefully. You need to be sure that its scope is very narrow and that all of the entities you are not to approach are identified. Even more importantly, you need to negotiate compensation for the rights you are giving up. Finally, I would think about whether signing the agreement would change your status from freelancer to employee in the eyes of the IRS. Because I am averse to signing such agreements, I make it clear that I plan to send the agreement to the IRS for review. So far, that has been enough to have the agreement disappear without my signature.

Richard Adin, An American Editor