Employee T&Cs (Part 3 – Summary)

This post is the last in the series (see parts 1 and 2) on the Employee Terms and Conditions we use here at Black Company. Here we cover the remaining clauses, which are not exactly games industry specific, but apply to any creative business.

Conflicting Interests

[clauses 10.1 through 10.3, and 14.1 through 14.8]

Oddly, as an independent games developer, we’re not really in competition with our peers in the industry. Rather, we tend to work with them, collaborating where possible to help game ideas come to life, and celebrating their successes. But like any creative industry, the value in a company is in both its ideas, and its team. As such, there are issues which can arise that may cripple a business. A dispute with an employee may arise, causing them to leave the team acrimoniously. Any employee will take with them knowledge of titles under development, they may also have a close working relationship with a third party like a publisher. Such information can be abused such that the company loses out on business, and a healthy development can quickly turn sour. It’s not unheard of for a senior team member to leave, set up a new studio of their own, and not only poach staff from their previous employer, but also use their pre-existing relationship with a publisher to pick up a development deal, while the original developer implodes due to the sudden loss of staff.

In practice, such a situation is rare, and such a drastic failing would only be possible if the situation inside the developer was already problematic. But even on a small scale, such an event can be enough to seriously damage a studio, and so these clauses attempt to make clear what is expected from the employee. To summarise, the employee must a) not be involved (or get involved) in a competitor business, at least without declaring it to the company, b) not interfere with any of the business’s existing business relationships (i.e. no poaching work), c) not attempt to coax any staff to leave the company (i.e. no poaching staff), d) not give away any confidential information that might harm the company and e) not pretend to be part of the company after they’ve left it.

These clauses are more generally referred to as non-compete clauses, and can be difficult to enforce, as it depends on a judgement on what is fair and reasonable to both parties. The final sub-clause (14.8) reflects this, and essentially says that while the contract is trying to be reasonable, if any single part of the contract is deemed to be slightly unreasonable, then rather than rendering the entire thing null and void, the next most reasonable interpretation should be enforced.

This is especially important because employees cannot and should not ever be prevented from working after they have left the employ of a business. For this it is crucial that companies not try to enforce these clauses without good cause, as a loose interpretation of “competing business” would include every other game developer out there, and it is entirely unreasonable to try to prevent an ex-employee from finding work elsewhere in the industry. These clauses are there to get the employee’s agreement that they will not actively pursue a course of action that will damage the company.

Confidentiality

[clause 12.1]

Lastly, it’s worth noting that the employee is bound not only to keep any internal confidential information a secret, but that they are also bound by any confidentiality agreements entered into by the company. That is usually things like platform confidentiality (no talking about closed platforms like Sony and Microsoft’s), as well as any business to business agreements (no announcing to your friends that your team has just landed the next instalment in MegaFranchise, before it’s even been announced to the press that a sequel is on the way). And of course these obligations exist even after the employee has left the company, and there is no limit on how long they must be kept for. It’s also worth noting that if information becomes public through other means, the employee can talk about that – so when MegaFranchise 2 is announced to all and sundry, the employee doesn’t have to pretend they know nothing about it.

Summary

I hope this series has been useful, both to other small developers and to games industry employees alike. I found that, when we started out, all of this information was lacking, and we would have to hire lawyers to get set up. Even then, there are few games industry specific lawyers, so any information you can get for a reasonable price is usually from places which have no idea of the nuances of games development.

Lastly, if you are put off by the legalese in the document as is, you can go here for my rather irreverent but much more succinct summation of each of the clauses in the document.

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Last modified: June 17 2014.