Watch out for this clause in your freelance contract
If a Lawsuit Can Bury Gawker, What Could It Do to a Freelancer?
On August 22, Gawker.com, the eponymous news and politics brand of media behemoth Gawker Media, officially folded. While the company’s other blogs, including Gizmodo, Jezebel, and Deadspin, will live on in some form under the wing of Univision, Gawker’s ending sent shockwaves across the media industry.
The publisher and its founder, Nick Denton, who filed for bankruptcy during the proceedings, were buried by a $140 million judgement in a lawsuit from Terry Gene Bollea, better known as Hulk Hogan, after Gawker published clips from Bollea’s sex tape in 2012. With virtually limitless funding from Facebook board member and Silicon Valley billionaire Peter Thiel, who had declared a vendetta against Gawker after it published a series of controversial posts about him, Hogan successfully sued for intentional infliction of emotional distress, violation of personality rights, and invasion of privacy.
For media companies, it was a frightening reminder of how privately funded lawsuits could bring any publisher to its knees.
But for freelancers, the story was a more chilling example of how words can have personal and professional consequences. I may not be releasing 1,400-word expositions of celebrity sex tapes onto the web (and vowing not to take them down), but rulings like that of the Hogan case trickle down as precedent.
If Gawker couldn’t stay alive with a team of lawyers, how could a freelancer possibly survive a similar lawsuit?
The indemnity clause
Recently, I received a new freelance contract from an online magazine for which I have been a longtime columnist. This outlet is one of my so-called “anchor clients,” and was also my first serious publication (as in, they actually sent me a contract). During my early forays into professional writing, I signed similar contracts like this without a critical eye. I was too enamored by the idea of earning money for my words.
Now, having cut my teeth in the industry for a few years, I’ve started to pay more attention to what, exactly, I am signing up for. While looking over the contract, I came across a passage that left me perturbed. It reads:
Contributor shall indemnify and hold Publisher harmless and defend Publisher against any liabilities, losses, damages, costs and expenses, including attorney’s fees, arising from any claim, action or proceeding based upon or in any way related to any breach of this Agreement, including breach of these representations and warranties, which shall survive termination of this Agreement.
Not being a lawyer, I had to read this a few times to fully comprehend the meaning. If my publication gets sued over my work for libel or accidental copyright infringement, I can be held personally liable not only for my own defense, but for any legal fees incurred by the publisher.
Apparently, this is a common freelance contract trap. According to the Canadian Media Guild, “Although publishers are ultimately responsible for what they publish, an indemnification clause allows the publication to potentially sue a freelancer to recoup damages that result from a libel suit.”
If I were to sign this contract, not only would I lose ownership of my words or ideas (a contract clause I have learned to live with in making “work-for-hire“), but I would also be liable to defend a work item I no longer own, in perpetuity.
As more publications shift to a contract labor force, these kinds of indemnification clauses have become the norm. Freelancers can fork out for personal liability insurance to minimize their risks, but it’s not cheap.
According to the Freelancers Union, basic liability insurance can be purchased for $22.50 per month in the U.S., an offer the organization arranged with small-business insurer Hiscox. When I used the chat feature to ask Hiscox for a quote, their response was: “Thank you for checking with us today for your business insurance needs for your freelance writing services. At this time we are unable to offer coverage for that type of business.” I was referred to another insurer.
Ed Gandia, a B2B marketer, interviewed the CFO of insureon for an episode of his podcast on liability, and the CFO quoted him a figure of $1,000 to $1,500 for a basic package that includes both professional (“errors and omissions”) and general (“slip-and-fall”) liability insurances for freelancers. While this insurance covers costs in civil courts, it doesn’t protect in cases of criminal defamation.
Nicole S. Cohen’s 2016 book Writers’ Rights: Freelance Journalism in a Digital Age summarizes the macro implications of shifting liability onto the shoulders of individual writers and journalists:
Freelancers […] lack protections necessary to do their work: 45 per cent of imprisoned journalists worldwide are freelancers, who cannot access the institutional, legal, and financial supports that protect staff journalists (Committee to Protect Journalists 2011). Unlike staff reporters, freelancers are not covered under media organizations’ libel insurance, and self-purchased libel insurance can cost thousands of dollars a year.
Leslie Dyson, president of the Canadian Freelance Union, believes that these contract stipulations add to the existing precarity of the freelance labor situation.
“There must be countless stories going unreported,” she said. “Freelance journalists are not able to do the job they need to do in society, which is hold people in power accountable.”
Dyson—also a full-time freelancer—has been sued once. However, she was writing for a construction labor union magazine and, before writing a piece on her province’s “worst employer,” had verbal assurances from a union lawyer that she would be legally supported by the organization. This experience proved to her that freelance journalists can’t function as a fourth estate without the full support of publications.
To further illustrate this point, Dyson referenced the example of Jesse Brown, a Canadian freelance journalist and podcaster, who broke the allegations of sexual assault against former CBC broadcaster Jian Ghomeshi. Brown approached the Toronto Star with the story and gained assurances of legal support and representation.
Brown told the Canadian Journalists for Free Expression, “I wouldn’t have reported it without some kind of [legal] protection. Had it been [my podcast] CANADALANDalone, I’m certain Ghomeshi would have sued.”
This climate extends beyond words printed in publications. Freelance writers have faced libel suits for merely tweeting about late payment issues with employers.
As Dyson put it, “You might be trying to get some content out there to make a name for yourself, but with a blog or social media, you’re all by yourself.”
So what can freelancers do to protect themselves in this journalistic minefield?
“In terms of precedent, it’s a bit of a crapshoot how these cases will go,” Dyson said, “so you have to protect yourself. It’s absolutely vital for the writer to be keeping copies of everything. Emails, screen captures, every little thing—hold on to it.”
Last year, freelance investigative journalist Barry Yeoman told Poynter he instead tries to negotiate out of indemnity clauses to read:
The Writer guarantees that the Article will not contain material that is consciously libelous or defamatory. In return, the Publisher agrees to provide and pay for counsel to defend the Writer in any litigation arising as a result of the Article.
Of course, not every freelancer has the bargaining power to change a standardized contract. Liability and indemnity are still going to be complicated issues for freelancers in the future. The best you can do is to read and negotiate your contracts carefully, always save a paper trail, consider investing in insurance… and don’t say anything damning about Peter Thiel.