Contracts and You!

In my humdrum day-to-day life, I am an attorney. Full disclosure: “The choice of a lawyer is an important decision and should not be based solely upon advertisements.”

While this post is not meant as an advertisement, some may consider it to be one.

I want to talk about an interesting intersection between my profession (lawyer) and my passion (TTRPGs): freelance contracting! Yes, I am the odd duck that finds this type of stuff fascination.

The basics: are you an employee or a contractor? Most of the time, this is very obvious. An employee will be paid either a fixed salary or an hourly wage, with the employer taking out taxes, social security, and all the other things to make the amount you thought you were making drop a decent amount. In exchange you get that regular paycheck, health insurance (maybe), the equipment/tools to do your job, and your employer has to worry about most of the liability issues.

If you are a contractor, you have been contracted or retained to perform a certain fixed task in exchange for the agreed upon compensation. The entity that contracted you does not remove taxes and other such things from your compensation package. You will not be provided insurance. Odds are, you will not be provided with the equipment/tools to do your job. Also, liability is likely to be affected.

You may also hear the term “independent contractor” or “freelancer” tossed around. So, you, as a person, may be employed by Company X, but Company X contracts your work out to Company Y. You are an employee in this scenario, but the crew over at Company Y will refer to you as a contractor, because they contracted you from Company X. You are not a freelancer in this scenario. A freelancer is independent of an employer, sometimes referred to as “self-employed”. Congratulations! You are your own boss…sort of.

Once upon a time, there were definite advantages to being a freelancer, especially in certain creative fields. You got to set the terms of your contract, including how much you were going to get paid.

Unfortunately, times changed. Now a lot of the work done in several commercial creative industries has significantly shifted to freelancers over a steady set of in-house employees. Not only is writing work contracted out, but so is system design, artwork, and editing. Basically, the only full-time staff are a cluster of “team leads” who act as the public face of the company, and generally get their names as first billing on whatever the finished project is. Hooray!

But you’re getting compensated for all that work, right? And you get to call your own shots, right?

Probably not, because the other party is probably bending you over the barrel on your contract terms. As an adult of reasonably sound mind and intelligence, the U.S. legal system expects you to be able to make informed decisions regarding the contracts you sign.

Say Company X wants to hire you to do layout editing on their new book “Balefire and Cruise Missiles: a Guide to Arcane Modern Warfare”. Now Company X does most of their product development with freelancers. Company X is also a BIG DEAL in the industry, and you’ve been told that doing good work for them will result in doors being opened later. This all sounds great! But you also need to pay rent and, ya know, eat. Slinging cappuccinos at the local coffee hut isn’t exactly paying off your student loans, either, and here you are with a bachelor’s degree. Company X has you come in to sign the contract. They want you to sign it NOW. I mean, why wouldn’t you? They say it is a standard contract, you will get paid what everyone else starts out/is getting paid (they are usually vague about this). No need to read it. Just sign it. Go ahead. It is the standard contract.

NEVER sign a contract that they are not giving you ample to time to read, review, and have an attorney look over. This is a power-imbalance maneuver. Company X will make you, as the freelancer, believe you are expendable, even if they do nothing but smile and slide that copy over to you for your signature. They really don’t have to do anything. The competitive nature of the market almost assures that you will sign that contract without going over the terms.

Here is the most valuable lesson regarding contracts: you have power. You can walk away. Company X does not want you to know that.

Say you do not like the non-disclosure agreement in the contract? Before you sign, you can say, “This is too restrictive,” then pop out your red pen and start crossing out lines.

ALWAYS bring a red pen with you when you go to review a contract, especially if you are an editor.

If you can, TALK TO A LAWYER. Have an attorney you trust review the contract before you sign off on it. That should not be a lawyer for Company X. In fact, if Company X’s lawyer starts trying to advise you, stop them and say, “I do not believe you are supposed to be giving me legal advice on this matter, as you already represent the other party.” That shuts them down hard. Not only that, it makes you feel like a real power player.

One of the absolute best things you can do is walk into contract negotiations with your own work contract. Company X isn’t the only one who gets to bring a contract to the table. When it comes to your contact it needs to be clear and concise:

A) I am only under contract to do specific task XX;

B) I will be compensated for performing task XX with $1,000,000,000 USD. 50% in advance, 50% upon completion of task XX;

C) Task XX will completed by Smarch 13th, 20XX.

That’s pretty much it. Simple is better when it comes to contracts. That is why when they throw a 50 page Ikea instruction manual at you, you should be able to counter with your nice, crisp, 3 page contract.

Here is a little checklist of things you should be including in your contract:

  1. Description of the work to be done;
  2. Time-frame to complete work;
  3. How much $$$;
  4. When do you get your $$$;
  5. Non-exclusivity;
  6. Limited non-disclosure; and
  7. Who retains the copyright to anything created.

What do I mean by non-exclusivity? Non-exclusivity means that you get to take other jobs while doing Company X’s job. Sometimes companies get real sketchy about the freelancers they hire working other gigs. They basically want your undivided dedication and loyalty, but they don’t want to actually go to the extent of employing you as an actual employee. Don’t fall for this trap, because it usually also includes a “we own anything you created while under contract with Company X” clause.

Example: Company X hires you to be writing staff for their “Mirthsters and Mayhemites”. Specifically, they want you to write out some description entries for their monster blocks. As part of your contract, it stipulates that during this project development run from April to September, you will only be writing for Company X. In July, while on vacation, you create Tipton Tornado, a madcap superhero. You complete your contract with Company X, are paid, and everything seems cool. Then, a year later, when you are making money off of Tipton Tornado (with a Hollywood studio looking to buy the movie rights) Company X has their legion of lawyers descend on you claiming they own Tipton Tornado because you created that character while under exclusive contract with Company X. Depending on the terms of that contract, you could be screwed out of your own creation. Company X is going to also make the argument that Tipton Tornado is similar in theme to monsters found in that M&M book you worked on.

What do I mean by limited non-disclosure? So, companies like Company X are going to use non-disclosure agreements (NDAs) to silence you, and not just during your time under contract. They want to silence you in perpetuity. Forever. “Can’t I just fight it in court later?” You got that kind of money? Because that costs a lot of money, and if you don’t win, you are hosed. The better approach is to have a non-disclosure clause built into the contract you bring to the table. A good, and properly limited, NDA will basically say you keep your mouth shut about the project until the project has been completed and made public, or until X amount of time has passed. That NDA should specifically be limited to details about the project itself, and does not bar you from making known any genuine complaints regarding workplace treatment, working conditions, or other matters.

What is amazing, is that actions which would not be allowed under a standard employer/employee relationship become enforceable under a freelancer contract with a strict NDA.

I personally hate NDAs and believe that they chill our speech and ability to communicate to others about the bad actors in our midst. These NDAs have been weaponized not only to protect matters specifically related to the work-environment, but also from people being able to speak up about abusive situations that occurred involving employees of Company X.

Example: After your work on “Not for the Squeemish: a Player’s Guide to Squeem and other Goblin Deities”, Company X decides you need to make the rounds at this year’s gaming con circuit on the company dime. That sounds great, right? But they make you sign another NDA before that, which is weird, because you already signed one. Whatever, you’re sure it is just standard stuff. So, while out at Burba-Con, in lovely downtown Burbank, California, after hours you go with some of the other Company X crew to the Booze-In, a “Laugh-In” themed local hot-spot popular with the con crowd. While there, you witness Joey Designer at Company X get really drunk and start groping people. You want to talk about this, so you call up HR at Company X who says, “We are aware of the situation, and we will handle it.” But Joey never has a reckoning, and actually gets a promotion to Joey Lead Designer at Company X. You decide to go public with it. *BUZZER NOISE* Now Company X claims you violated your NDA and is seeking damages against you for that violation of the NDA.

“So all of this sounds good, but it just sounds like they will give the job to other people.”

Yes, there is a good chance Company X will pass on you, because you are “difficult” (in that you actually understand your worth and will not agree to unethical business practices). Trust me. You don’t want to work for Company X if any of these issues are going to bother you. Also, if you are really good at what you do, and build a name working for Companies A, B, C, and D while using your own contract, maybe Company X will agree to your terms someday. (This is unlikely, as Company X holds no value in regards to quality.)

Also, don’t be afraid to team up with some other creatives and start your own co-op. As a group you will have a greater deal of bargaining power over the traditional freelancers. Once creative freelancers start grouping together in co-ops for increased bargaining power, the companies will start hiring full-time employees to fill those positions again. The shift to using freelancers is after all because it is cheaper for the companies involved.

But this is all about contracts, so how does forming a co-op play into that? Let us say that you and some other people you have come to know are all editors. You have copy editors, layout editors, developmental editors, proofreaders, etc. All together, in a different era, you could have opened your own editing firm with bit of start-up money. But who has anything except oppressive debt anymore, right? Sure, you could maybe get an entry level position with a publishing firm if you lived in New York or London or…wherever else big publishing firms still exist, but the cost of living in those cities is huge. Once again, oppressive debt. Besides, with the technology available there is really little need for an editor of any kind to be on-site anymore. So instead, you’ve got a loose group of editors that you’ve made friends with over social media. Sometimes you will even share what your rates are between each other, and realize you are all under-charging for your services. Now, let’s say you are all in the U.S. (all of my examples are U.S. oriented, as that is where all my experience is. I’m absolutely out of my element when it comes to international contract law.) It is a business organization, but it is owned and controlled by its members for their benefit rather than to maximize profit. As a co-op, you wind up with collective resources to do things like hire a lawyer to draft contracts, establish health insurance plans, or even retirement/pension plans. You can also work together to establish a solid rate structure. And the more freelancers you bring into the fold, the more your bargaining power grows. The more bargaining power you have, the more you are able to get what you want out of a contract without any of the nonsense that shouldn’t be in there to begin with. Also, another advantage of the co-op is that if you do wind up in a position where you have too many personal assignments, you have back-up, because Company X isn’t just contracting with YOU personally, but with the co-op as a whole. There’s strength in numbers.

Anyway, get you a lawyer. There’s a lot of young freshly minted lawyers who just passed the Bar Exam looking for a meal (most of them are also in oppressive debt). Contracts don’t have to be brilliantly crafted documents with numerous exclusions and codicils and indices. In fact, it is better if they are solid, hard, hammers that make clear 1, 2, 3 statements of terms, that then nod in favor at the sturdy hard-wood chair they just created.

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