To protect their anonymity I’m not using the names of the designers I spoke with and I’ve changed any identifying details, although not in a way that affects their stories.
Last fall I wrote a post explaining how much fabric designers earn. Several designers emailed me afterwards about various other issues, one of which was contracts. Since then I’ve slowly been looking into contracts for fabric designers and I’ve discovered that the majority of designers working with two of the world’s leading manufacturers of premium quilting cottons are working without written contracts. At Moda and RJR, designers create collections based on a handshake deal, an oral agreement that they make with the company.
Does Working Without a Contract Make You More Free?
A Moda designer recalled being approached by a representative of the company many years ago and asked to design her first collection. She excitedly went home to tell her husband about the good news. He advised her to ask for a contract, but when she did she was told, “We do things on a handshake here.” Although startled at first, she went ahead with it because she felt there was a possibility that “they would have said ‘forget it’ about my collection if I’d insisted.” She’s produced four collections a year for Moda, working with them for nearly a decade, without a written contract.
“Quilters are fairly honest, fairly upfront. I haven’t had one serious issue. In fact, I’ve learned to like not having a contract. It gives me the freedom to leave when I want to,” she says, although she acknowledges some concern about the weaknesses of an oral agreement. “If a dispute came up, I wouldn’t have much say, I guess. There’s not even an email trail spelling out the agreement. There’s nothing.”
An RJR designer I spoke with expressed a similar sentiment, explaining that working without a contract is freeing. “The relationship is more symbiotic, more give and take,” she says. “Without a contract, as a designer I dig deeper and produce designs I feel will be printed and the customer would want. I don’t have a hard deadline nor am I given any directives. I create what is in me. There is freedom and flexibility to that and frankly, that is the only way I could design fabric.”
She feels that RJR as a company has to work harder to retain her because their agreement is not in writing. “On the other side of the table, not having a contract means that RJR must produce a quality product and deliver in a timely fashion. There must also be respect for what is created, as their designers could move to another company at any time….The company had been in business for a very long time with the same employees and some iconic designers. There must be something to that. The bottom line is I believe that ‘no contract’ means both a better product and a better working relationship.”
Our Word is Our Word
I asked Cheryl Freydberg, the Design Director at Moda, to explain their approach to contracts for designers. “Most of our designers do not have contracts. I’d say 80%-90% don’t have one,” Freydberg said. “If they want one, we’ll furnish one, but our thoughts are if they’re unhappy with us they’re free to go.” When asked if working with designers without a contract was a philosophical decision on Moda’s part she said, “There’s no philosophy behind it. This is the just the way we’ve always done it. Our industry is so small and we treat all of our designers the same so we feel no need for contracts.” When I asked Freydberg if she would advise her daughter to enter into a business relationship without a written contract she said, “I think if she was new to an industry she should request a contract, but our designers are people with whom we’ve already had a past history and are established in the industry. Our word is our word.”
I reached out to RJR’s Creative Director, Demetria Hayward, to ask about their approach, but she was away and not available for comment. Talking with several RJR designers past and present, though, it’s clear that although they’re offered written contracts, almost nobody has a written agreement (After emailing over a dozen designers in total between both companies I wasn’t able to find a single one who had a written contract, although there may be a few.)
Is an Oral Agreement Enough?
Contract law doesn’t favor oral contracts. Although an oral contract is as legally binding as a written contract, proving what it said can be difficult, especially without a witness. Handshake agreements are generally acceptable for simple transactions like trading goods with a friend or buying bitcoins from a cryptosoft app, but for deals with many fine points a written contract is clearer and easier for both parties to defend.
Legal educator Kiffanie Stahle of the artist’s J.D. explains, “A handshake deal is a contract. Contracts can be formed in a variety of ways: conversations, email exchanges, or a formal written piece of paper. Just because a designer didn’t sign a piece of paper doesn’t mean she doesn’t have a contract. It just means that if the relationship sours, it’s harder to prove what the roles, responsibilities, and expectations were for both the designer and the company.”
A licensing deal with a fabric company is not a simple agreement. The designer is assigning her copyright to a company for a limited period of time to be used in a certain way. Terms have to be hashed out including where and how the work can be used and for what length of time, what the royalty structure will be, if there will be a kill fee or other compensation if the company cancels the project, if there will be a late fee if the company doesn’t pay on time, whether the license is exclusive to this company or can be assigned to another company at the same time or at a later time, whether the company can modify the work or create other works based on it, how many revisions they’ll ask you to make, what happens to the work if the company merges with another company or goes under, among others.
When you’re hashing out an agreement it’s easy for memories to differ. If you’ve talked about several different arrangements, a written contract can clarify what the project will be limited to. Oral agreements get even more complex if they’re amended with no written record, whereas a written contract can spell out that the agreement can only be changed by mutual written consent. Oral agreements can easily devolve into a he-said/she-said argument and if a company were to be bought out, the memory of the deal can be erased entirely. Additionally, it’s important to note that witnessing discriminatory behavior against a colleague can create legal and ethical complexities that may require documentation or intervention.
Is There a True Choice?
If designers at Moda and RJR are being given a true choice between an oral agreement and a written contract why are so many choosing an oral agreement when it’s clearly the weaker option? Why would a designer, like one I spoke with who has written contracts for her other licensing deals for wallpaper and paper goods, have only an oral agreement for her fabric line?
Over the past week I’ve talked one-on-one with many fabric designers about their experiences and through our conversations one possible answer has become evident. The balance of power between a designer and a fabric company is not even. There are only a few major companies producing premium quilting cottons in the United States and each company works with a limited pool of designers – perhaps a dozen or two, but not many more. And yet there’s an abundance of talented people, mostly women (95% of Moda designers are female, as are 89% of designers at RJR), eager for a fabric line. As one designer said, “There are a hundred others right behind me that will do this with no contract just because they want it so badly.”
This massive pool of hopefuls has an affect on the few that are chosen. Several designers said that although the written contract was presented as an option, it was phrased in such a way that they felt uncomfortable accepting it. “You don’t need a piece of paper, do you? You can trust us,” was the thrust of the conversation according to the designers I spoke with. If a designer is made to feel that insisting on a written contract indicates that they don’t trust the company, or that they’re demanding more than everyone else, while all the while knowing that they are easily replaced, it’s possible to end up accepting a deal based on an oral agreement alone, even against their better judgment.
When a Relationship Sours
One designer I spoke with (who worked with companies other than RJR and Moda – the practice of oral agreements extends to other smaller fabric companies as well) explained that she wanted a fabric line more than anything else. “To see my name on the selvedge, to have my designs on bolts, that’s what I really wanted. I tried for three years,” she recalls, “and had a few opportunities fall through. When I was finally offered a deal, but there was no contract, I went ahead with it. I felt like it might be my only chance.” She was told that the reason there was no written contract available was “so that we could both get out of the deal when we wanted.”
After designing 12 collections, she was dissatisfied with her experience and wanted to move on to another fabric company, but it wasn’t easy. “I had copyrighted my work on my own, but they said I couldn’t bring my previous designs to my new company. They said they were theirs. It was really frustrating.” She hired a lawyer and tried to make headway for a year before giving up. “It was very costly,” she says. “I had trouble proving that the designs were mine. It was just vague. I’m trying to protect a polka dot and a line and a circle. I know there are only so many lines and dots, but those are my marks.”
With her new company she got a written contract from the start. “It was hard asking for it, but I want to protect my name. That’s important to me. Also I like knowing that there’s an end point. At that time I can renegotiate.”
It’s Not About Trust
A written contract is not a matter of trust. It’s a matter of clarity. Fabric companies including Moda and RJR need to invest in legal departments that can draw up and negotiate contracts for every designer with whom they work. The offer of a written contract should not be couched in intimidation at a time when a designer is vulnerable. Written contracts are standard business practice for good reason.
Wow, I never knew that so many designers didn’t have contracts. Most of the designers I’ve spoken to do have them, and I personally can’t fathom operating without one. If it was a simple he-said, she-said debate if things soured, that would be one thing, but the truth is that the big business with the expensive lawyers will almost always have the upper hand. The burden of proof seems to fall more on the artist than the manufacturer.
I think the point about the majority of designers being women informs the lack of contracts. We always read about how women are less likely to negotiate salaries, and I wouldn’t be surprised to find that they are less likely to push for a written contract. Women are socialized to be less confrontational. A female designer might feel like insisting on a written contract to a company that keeps saying, “don’t you trust us?” is rocking the boat. They tell themselves that they could lose the deal if they refuse to work without a contract.
I’m not saying that Moda or RJR are plotting to screw the designers over, but they must know that having no contract is to their advantage, not the designer’s. It’s just the nature of business to ensure your own best interests and designers should really think carefully. Trusting other people to ensure your own interests may work for a time, but it’s a gamble. No one goes into a deal expecting things to go south, but if they do, it’s better to have everything spelled out in a contract.
Almost every designer I spoke with had really positive, wonderful experiences with both RJR and Moda. “They’re like family,” was a repeated phrase. A written contract is not about trust or bad feelings. It’s one business entering into an agreement with another and it’s helpful to everyone to be clear on the details if only to have something to refer back to.
Yeah, but not all families are happy. loving and functional. The “dot, line and circle” designer learned this the hard way.
I’m so glad you chose to write about this and I hope it encourages designers to take action to defend their intellectual property!
Abby – thank you as always for the work you do! I can’t agree with you enough on getting a contract – and better yet, really understanding every clause of one that you are offered. And as for the idea that without a contract, either party can terminate at any time – that is not hard to write in! The larger issue is the idea that if we don’t accept terms that make us uncomfortable, there are a hundred people behind us that will. We ALL need to stop doing this. If we all quit accepting the crumbs, the companies will have to serve better meals, or else have nothing to offer at next quilt market.
Thanks – a thoughtful post. There are lots of issues here to think about.
Wow, this “don’t you trust us?” sounds like an emotional blackmail that has no place in business. Of course it’s about clarity! And since a contract protects both parties, I don’t understand how the companies can’t see it’s in everybody’s interest to have one. That being said, I understand the designers who say there are so many people out there who wants a licensing deal that they do it anyway, and I’m not sure what I would do in their situation either. This is rather infuriating, thanks for writing about it…
It’s a sticky situation for the designer and for that reason I feel it’s the fabric company’s responsibility to not put designers in this position. Offer a reasonable contract and explain it in plain English so that everyone is clear on expectations and then move forward. It’s just good business practice.
So interesting. It does seem to be the companies who wield the power here though, I would definitely not be happy about the lack of contract but it seems clear that there is not really a choice in the matter.
From what I can tell, there is no choice at RJR.
Great post Abby! You tackled this sticky subject well.
I just wanted to chime in with one legal clarification. Thanks to the Copyright Act, an oral contract can never grant the fabric companies an exclusive license or copyright ownership. They’d need something in writing for that. Which is another thing designers can bring up to show how a written contract will benefit the company as well.
What a great point. For a fabric company to have exclusive rights to print your design, they need that spelled out in writing. Otherwise if a designer were to leave, they would be able to take those same designs and have them printed elsewhere (with a competitor, for example). This is a good illustration of how a contract is helpful to both parties, not just the designer.
While this is true, the larger issue is that if there isn’t a contract in writing, even if the law is on the side of the designer, the reality is that the fabric company has in almost all cases, far deeper pockets. If there’s a written contract, the designer can take legal action more affordably. If there’s nothing in writing, the designer has to decide if she’s willing to invest her resources (as the designer mentioned in the article) to prove her ownership. In most cases, the cost of waging a legal battle over fabric rights is greater than the value of the rights, which is why this continues.
One great tool to prove ownership that creatives often don’t take advantage of is a U.S. Copyright Office registration.
If you are diligent about registering before you provide material to your clients, you can batch multiple projects on the same application for $35. It’s great insurance for instances when you need to prove ownership.
Kiffanie wrote, “…you can batch multiple projects on the same application for $35.”
Submitting a batch or a group registration of more than one fabric design on one application is a great way to minimize costs.
However, the Copyright Office’s eCO registration instructions are specific. If you want to register MORE than one fabric design, you’ll have to use the Standard Application ($55) instead of the Single Application ($35).
In fact, it can be a bit challenging to qualify for the lower priced Single Application on-line registration form: Among other requirements, the single submitted design must be created and owned by the designer (it cannot be a joint collaboration or work-for-hire arrangement); the single submitted design cannot include any Public Domain, Creative Commons, licensed, or borrowed designs/content (if so, you’ll have to use the Standard $55 Application). See the following link: http://copyright.gov/fls/sl04s.pdf
Eye opening piece! I had no idea this was happening all around me. Red Rooster and I worked hard to hash out a mutually beneficial contract. I did the same with OESD for machine embroidery. Coming from publishing background I’d never enter into an agreement without signed documents.
I’d like to hear more about why you feel you wouldn’t enter into an agreement without signed documents, Heidi, if you care to share.
I kind of like the level of trust that is implied here. I for one love to work with companies where I’m made to feel like family rather than needing to stake a claim in every sentence I utter. We have too much litigiousness in the world already and I do love that the quilting industry is more of a warm and fuzzy one – at least from my rose-colored perspective 🙂 But that’s just me – I love the open-ness and respect for ALL opinions that can be freely expressed through social media.
I agree that it’s wonderful to work with companies that trust you and treat you like a member of their family. I don’t feel that a contract makes a relationship more litigious. In fact, I think it’s the opposite. A business relationship is more likely to devolve into he-said/she-said contentiousness, and possible litigation, without a written contract than with one, no matter how warm the relationship was at the start.
Christaquilts – I have been both an investment banker and a designer in the quilting world. I have seen more unprofessional and outrageously unethical behavior in the quilting world than I saw as an investment banker. While it may be a hobby for most, for those for whom it is a livelihood, “like a family” is code for being treated like a child I’m afraid. Having a contract says, “I respect that this is a business relationship for both of us. Let’s be clear about it so we can build a relationship that will benefit us both.” Of the three companies we’ve worked for, Andover, whose contracts are very respectful, treats us the best.
Could not have been said better!
This nails it.
As a small business owner one way that I make it clear that I am a professional in my field is with contracts and other formal processes.
I would be terrified to license my work without a written contract that I understood. There are so many horror stories out there about IP appropriations – in comics and music and even fiction. The opportunity for someone else to claim your copyright under a “work for hire” agreement or otherwise is long established. The written agreement is more than their promise to pay, it is their acknowledgement of rights and ownership and value and so much more, and protects them from the designer selling the design to someone else simultaneously. Proving ownership is so important not just within that relationship, but also so others can’t take your design and start selling it on Spoonflower or Etsy or Zazzle or some equivalent in another country. To publish your work (make it public) without an agreement is fraught with dangers, regardless of the industry you are working with. I would be very reluctant to work with a company that does not do it as a standard practice. I would suggest at a minimum if you choose to work without a written contract, obtain official Copyright documents for those designs before the agreement is finalized. It will cost you a little bit of money, but it could mean the difference of losing your licensed portfolio (to the company or a pirate) or protecting your IP.
I’ve worked both ways, with contracts and without. I like to have a contract, and I like to negotiate contract points, and I’ve found that most of my clients were happy to do both (both to provide a contract and to negotiate its details) and I always suggest to artists that they should either have their own standard contract or to negotiate parts of the contracts they get offered. I work with different types of companies but haven’t done fabric collections yet. In all the cases where no contract was made, I’ve had no problem at all, and the principle of trust has worked really well. Most companies are aware of the dangers of cheating their artists – the social media clobbering they can take can be really unpleasant. Also most companies just want to do a good job and keep good business relationships going. But I’d feel weird about going into a really big or long term deal with no contract.
Great article, as usual. I only would like to add on the importance of discussing the contract throughly before commiting. Sometimes only later some small print do get clear and, in that cases, rarely is it in favour of the designer…
Thank you, Abby, for an excellent post…as always.
Your post about how much fabric designers earn was another eye opener.
I am shocked by both their earnings and lack of contracts. This is 2015, operating a business with a hand shake is from another era, back in the covered wagon days. So hard to believe. We need to value ourselves and our work.
This is also a excellent post by the Ringle’s from their blog, could not be said better!
http://craftnectar.com/2015/05/28/get-it-in-writing/
Thanks again, Abby, for all that you bring forward.
I guess I don’t understand why fabric designers would need contracts, any more than lawyers, accountants, physical therapists or a myriad of other working people do (and by the way, most of whom don’t have them, including myself). Most jobs (other than union ones) are “emplyment at will,” no contract involved
Intellectual Property rights can be complicated. If you are considered work for hire as a designer or artist, what you create while working for employer belongs to employer, not you. Like Disney animators don’t own their work, neither would you. Licensing your IP is a different beast entirely: no one is paying your salary, the licensing royalties or lump sum fee is *all* you get. These designers are not being paid for their time, only the designs. No one is paying their FICA or insurance or any other benefits. You are only paid what licensees can or will pay for what may have taken you months or years to perfect. And that payment may be months or years after the deal is struck, and still there is no guarantee it well sell, so you still might make little or nothing. A valid option for monetizing, but far riskier than a job. And riskier still without a written contract, since you might have no way to prove what you were supposed to get or what licensee was supposed to do.
To clarify what Rebecca said, there’s a difference between being an employee for a company (an at-will employment relationship) and working as an independent contractor.
When you are being paid a lump sum and you are responsible for paying all your taxes, you are working as an independent contractor. When your employer issues you a paycheck with the taxes deducted, you are an employee.
Fabric designers are working as independent contractors for the companies. And it’s always a good idea to have some sort of writing that outlines what is and isn’t included and how payment will be made when you are working as an independent contractor to eliminate misunderstandings.
I hope you aren’t implying that “employment at will” is a positive for anyone other than the employer.
Business-to-business, the old saying goes “There are only two things: contracts and conversations. If you don’t have the one, all you have is the other.” Documenting the oral contract you think you have is good for everyone.
What percentage of male designers have contracts? I’d be curious to know why there’s a difference, if one exists.
I really appreciate your dedication to gathering and sharing detailed information about earning potentials and common business practices within industries that license artwork. I wholeheartedly agree that opening up about these issues will benefit commercial artists tremendously and will likely help bring about change where industry practices can be improved.
If you’re building a business based your art, managing and leveraging the many potential uses of your work is just good common business sense. Solid license agreements spelled out via written contracts are an essential component of this management and you’ll be well served to get more comfortable asking questions and requesting changes to contracts where terms are unfavorable—or simply insisting on a contract in the first place! I’m not saying it’s easy, but I believe it’s essential if you’re serious about building a strong and sustainable business.
The cool thing about written contracts is that they give you an opportunity to think and work through ALL the potential ramifications of a particular deal before you’re deep in it—not just how much you get paid and what you provide in exchange for that payment, but things like: What else will the company be able to do with your art? How, when and where will you be credited? What happens to your art if the company is sold to someone else? What happens if the product quality suddenly declines and you no longer feel good about having your art associated with it? What happens to your art if the company doesn’t want to work with you anymore? And so much more—way more than could be legitimately dealt with in an oral agreement.
Thanks for your thoughtful, informative writing, Abby!
I hate to say it, but I doubt we’d see this same pattern in a male dominated industry. It saddens me, and you are so right a contract is about clarity and covering all the bases not about trust/distrust.