Business Resources for Authors

Harlequin Lawsuit Offers Valuable Contract Lessons

A class-action complaint has been filed against romance publisher Harlequin regarding underpayment of royalties on ebooks.

Yesterday, Digital Book World and GalleyCat broke the news that a class-action complaint had been filed against romance publisher Harlequin regarding underpayment of royalties on ebooks. You can read the press release announcing the complaint here. The lawsuit is also being discussed on Dear Author and BetaBeat today.

The complaint (available in full here) centers around contracts between Harlequin and at least three named authors that were signed between 1990 and 2004. Because ebooks were barely on the horizon during those years, ebook royalties were not spelled out the way they are in present-day contracts. They were considered part of “other rights.” You can read the specifics, but suffice to say the authors feel the contract terms should be interpreted so that they earn a far higher percentage on ebook sales than they’ve been paid.

Harlequin CEO Donna Hayes issued this brief statement yesterday. “Our authors have been recompensed fairly and properly for their work, and we will be defending ourselves vigorously.”

It’s far too early to see what the outcome of this will be, although the music industry went through a similar upheaval and music artists won the right to higher royalties back in 2010.

For authors today, we recommend making the time to read the complaint this weekend. Yes, even if you’ve never signed a publishing contract, this is a valuable education about contract terms. A few of the lessons learned:

  • You may be ecstatic about being offered a publishing contract, but be sure to read and understand it before you sign. Even a one-page contract may contain clauses that look benign but become all-important a few years down the road.
  • The term of copyright for new work is 70 years after the death of the author. Digital books can continue to earn income after your death—consider that as you decide what rights to sign away and for how long.
  • Technology continues to evolve. Consider that before signing away world publishing rights in all formats, even those not yet invented.
  • If you’re unclear on what certain clauses mean, think twice before asking your new editor or anyone at the publishing house, even their legal department. Verbal or emailed explanations are meaningless. The contract will stand on its own language. Your best bet is to hire an Intellectual Property attorney to review the contract, answer your questions and, potentially, negotiate changes you would like to see made before you sign.
  • Even if you have a literary agent, ask him/her point blank if s/he feels qualified to review the contract and give you legal advice. Most likely, the answer will be no.

If you are an author who signed a contract with Harlequin between 1990 and 2004, you should visit the Harlequin Lawsuit website to get further information on how you may join the suit.

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2 Comments
  1. “You may be ecstatic about being offered a publishing contract, but be sure to read and understand it before you sign. Even a one-page contract may contain clauses that look benign but become all-important a few years down the road.”

    While I agree with and would always reiterate the need for writers to UNDERSTAND the contracts they sign, failure to understand their contracts when they signed is not the issue in the writers’ class action suit. Harlequin allegedly being in BREACH of the terms of those contracts is the issue.

    In this case, Harlequin might now wish =it= had looked further down the road before committing to ebook royalties of 50% of net in those contracts, since what the writers are specifically alleging is that a subsequent creative-accounting system was implemented deliberately to avoid paying them the contracted rate.

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