Competition Taskforce Division
Treasury
Langton Cres
Parkes ACT 2600

By email: competitiontaskforce@treasury.gov.au

31 May 2024

Dear Taskforce members,

**Worker non-compete clauses and other restraints**

The Australian Society of Authors (ASA) is grateful for the opportunity to make a
submission to this consultation.

**_About the ASA_**

Since 1963, the ASA has been the national peak body, professional association and voice of
Australia’s writers and illustrators. We have 4,000 members drawn from every sector of the
writing and illustrating world, including: novelists, non-fiction writers, biographers, illustrators,
academics, comic artists, scientists, historians, graphic novelists, educational writers,
children’s writers, crime writers, science-fiction writers, romance writers, journalists, poets and
more.

In this submission, a reference to an “author” is intended to also include illustrators as they are
the authors of their artistic works.

**Discussion Paper question 14: Is it appropriate for part-time, casual and gig workers to**
**_be bound by a restraint of trade clause?_**

Our submission relates to Australian authors who typically work as sole traders. Authors are not
employees. As independent contractors, authors are treated by the law as competitive
businesses that can engage in arm’s length negotiations. The reality is that authors have little
power to negotiate, cannot set their own rates of pay, do not receive sick leave or annual leave,
and lack access to guaranteed superannuation. In short, authors are vulnerable and, in the
main, live financially insecure lives.


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The Macquarie University Author Income Survey has found that the vast majority of authors are
entirely unable to earn a living from their creative practice with an average annual income of
only $18,200.

The ASA has long been concerned about authors’ lack of bargaining power in negotiating
contracts for their work. As a general observation, authors are unable to negotiate substantial
changes to contractual terms with publishers beyond the edges.

Our submission is that it is not appropriate for gig workers such as authors to be bound by
restraint of trade clauses. Yet, non-competes and ‘right of first refusal’ or option clauses are
commonly found in Australian publishing contracts.

**Australian Publishing Contracts**

A non-compete clause is a clause that prevents authors from publishing any future work which
is similar to, or might compete with, their current work without their publisher's permission. In
our view, these clauses are unnecessary to protect the business interests of publishers and can
unfairly impede authors from making a living.

We support the Government prohibiting non-competes clauses in contracts with low-paid
freelancers for the following reasons:

1. The only compensation paid to authors that is guaranteed under publishing contracts
is the advance which is typically low, and regularly not offered at all. Royalties are
unpredictable and based on sales. According to research by Macquarie University, the
average advance earned by Australian authors is $4,100 in a year.[1] There simply isn’t
sufficient remuneration on offer to justify any restraint.

2. Non-competes are notoriously vague. Although terms can vary across contracts,
typically authors are required to warrant that they will not publish, write or become
involved in any work of a similar nature, containing the same or similar characters or
themes that is likely to compete or likely to lessen its sales for themselves and their
licencees. Publishers rarely limit the non-compete by time or geographic territory. It is
very difficult for authors to know the parameters of such restraints and their vagueness
can cause stress and uncertainty for authors.

1
_[2022 National Survey of Australian Book Authors: Industry Brief No. 3: Authors’ Income, Zwar, J.,](https://research-management.mq.edu.au/ws/portalfiles/portal/218427039/Industry_Brief_3_Authors_Income.pdf)_
Crosby, P., & Throsby, D. (2022). Macquarie University.


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3. Unless non-competes are very short-lived, they may restrain authors’ abilities to earn a
living, particularly for genre fiction writers (where all their works arguably compete with
each other), specialist non-fiction writers (where they are an expert in a niche area and
may want to publish multiple books on the same subject matter) or illustrators
commissioned specifically for their unique style.

4. Non-compete clauses are ‘one way’. Authors are not permitted to go to another
publisher with a ‘competing work’ but the publisher is not committed to any further
support of the author. Nor does the publisher offer a reciprocal promise not to publish a
work with a third party that is similar, or likely to compete in the same market, or that
has the potential to reduce sales of the author’s work.

5. Authors might have a range of valid reasons for moving to another publisher, including
that their genre of writing might change - and be more suitable for a different publisher’s
list.

6. Non-competes are rarely actually enforced by publishers, and are, in all likelihood,
unenforceable. However, authors often lack the resources or desire to get into a legal
battle with their publishers and are very unlikely to sue. Therefore, these clauses have a
chilling effect on author decision-making despite the fact they are probably not
enforceable. If the Government introduced a ban on non-competes, authors would be
empowered to simply reject such clauses as unlawful.

**Option clauses**

7. An option clause allows a publisher to have the first right of refusal over an author’s
next manuscript and is usually drafted such that authors cannot negotiate with any
other publisher unless they have firstly followed a set procedure with their current
publisher. These clauses are intended to lock authors into working with one publisher
but, again, operate ‘one-way’ as publishers do not promise authors they will publish
them again.

8. These clauses are similarly onerous on authors who wish to work with a range of
publishers or who write across categories and genres meaning that their next work may
be more suitable for a different publisher’s list. If both the author and publisher enjoy a
good working relationship they will naturally enter into future contracts; option clauses
are not necessary to make this happen.


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**United States ban welcomed by authors**

9. [In April this year, the Federal Trade Commission in the United States issued a rule to](https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete-rule.pdf)
ban non-competes. This ban was supported by the US Authors Guild (our counterpart
in the United States).

In short, we do not support any restriction on an authors’ ability to freely contract with
numerous publishers to optimise their ability to earn a living, given their overwhelming financial
instability and precarity.

If we can be of any assistance or provide further information, please don’t hesitate to contact
us.

**_Contact:_**

**Olivia Lanchester, CEO**
[olivia@asauthors.org](mailto:olivia@asauthors.org)

Gadigal Country
Suite C1.06, 22-36 Mountain St
Ultimo NSW 2007
**T 02 9211 1004**
[www.asauthors.org](http://www.asauthors.org)


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