I’m so excited to have Cory Huff sharing his story with you today. Cory and I first met two years ago when we were both speakers at the Thriving Artist Summit. He and I both dislike the starving artist myth. And I appreciate Cory’s approach to empowering artists around the business of art. In fact, he’s taking this to the next level by hosting a conference in July 2016.
Without diving into the nitty gritty, tell us a little about a time you learned the “legal” ropes…
Contracts matter, and they favor the people with more money. Several years ago, I signed a non-compete agreement with an employer. It was, in my opinion, a completely unfair agreement, but I needed a job really badly at the time.
The job didn’t pay me enough to pay my students loans, so I started freelancing on the side to make ends meet. After a year of doing this, my employer found out and they summarily fired me for violating that non-compete agreement.
After they fired me, they sent me a cease and desist letter saying that if I kept up my freelance efforts, they would take me to court. I scraped together enough cash to talk to a lawyer, and they lawyer agreed with me that I had enough wiggle room in the contract that I could possibly challenge it in court. But I didn’t have the money to do so.
So instead of freelancing or finding a similar job, I was forced to get out of the market I was in and find a job where my skills transferred. I was pushed out of a field I loved working in because I didn’t have enough money to make the courts work in my favor.
So instead of freelancing or finding a similar job, I was forced to get out of the market I was in and find a job where my skills transferred.
Yuck, that doesn’t sound fun, how did you feel at that moment?
I was pretty unhappy. I had been approached by several companies about working for them, but on the advice of that lawyer, I declined all of them. I was really worried and stressed for a few months while I tried to find another job that my skills would transfer into.
Did this impact your creative business? How?
I had just started my business on the side. I couldn’t see how it could possibly survive, so I ended up finding another job in a different field. I stayed there for about two and a half years.
I was eventually able to steer my business in a different direction that was far enough away from that old employer that they couldn’t come after me, but it delayed my vision for a long time.
On the plus side, the new job that I got gave me an opportunity to see how a company can grow very quickly, and I was given several opportunities to interact with some very powerful and smart people.
In the long run, these unforeseen opportunities turned into massive learning experiences for me and my business is stronger, and different, for it.
What ropes did you learn from going through this experience?
The biggest thing I learned from the experience is that contracts matter, but they can only be enforced if you have the money to fight in court. I promised myself that, if possible, I would never find myself in another situation where I was pushed into signing a contract under duress.
How can you avoid this?
You run the risk of signing a contract you later regret, whenever you are under pressure to sign. This might be because:
- the contract is take-it-or-leave-it
- it’s a last minute deal
- you are in a jam
And that is because these kinds of contracts usually favor the other side. So what’s important to do — but hard — is to pause and put on your thinking like a lawyer hat. And when you do this, you might find some outlandish or probably invalid parts of the contract. So you need to ask yourself (and honestly answer) the following question:
Even if this outlandish contract is legal, am I okay with the potential outcome?
Honestly, this is not that different from the question that you should ask for every contract,
If everything goes haywire, will signing this contract help my business, hurt it, or leave me relatively in the same place?
Pausing to consider the potential ramifications is hard because you are under pressure. But taking a breath, listening to your gut, and thinking things through can help avoid mistakes. And these mistakes can cost far more time, money, and mental anguish than these few moments of pressure. So if your gut really tells you to run the other way, then trust it.
And these mistakes can cost far more time, money, and mental anguish than these few moments of pressure.
Note on non-compete clauses
I think it’s important to imagine that crazy contract provisions are valid when you decide if you should sign a contract. But I would be remiss not to point out that laws vary based on where you live. And they vary drastically when it comes to non-compete clauses. So having an understanding of your laws helps you decide to what degree that contract section is valid. Because for some of you, the non-compete wouldn’t have been enforced. Which means this story would have turned out far differently.
Finally, I think it’s important to remember that almost everyone has signed a bad contract. So when you realize it, all you can do is create an action plan to minimize the ramifications and put it all behind you.
I think it’s important to remember that almost everyone has signed a bad contract.
How you can easily apply this today
- Read this article about creating a contract review system. So you have a method in place to review contracts that come into your business.
- Set aside 20 minutes later this week to sketch out what that system would look like in your business.
Have you ever signed a contract you later regretted? How did you minimize the impact on your business? Share your stories in the comments.