How to Publish without Financially Perishing

The increasing use of indemnity clauses in publishing agreements makes the author, not the publisher, fully responsible for defending even frivolous lawsuits against the publisher.
By Rodney P. Mock, Arline Savage, and Mark G. Simkin

A law professor at the University of Oregon, Merle Weiner, published an article in the University of San Francisco Law Review that referred to a domestic-violence case. The defendant in that case read Weiner’s article, concluded that the article was defamatory, and threatened to file a lawsuit against her. Because she worked for a university that expected her to publish articles as part of her job, Weiner asked it to defend her. But the university declined— she was on her own.

Weiner was able to use personal legal contacts to help her, and she eventually settled her case out of court. But her experience provides a lesson for all university faculty members: every time you publish an article, you run the risk of a lawsuit. Who pays the legal costs and expenses? The most likely answer is—you! And if you signed a publication agreement with an indemnity clause, you may also end up paying the publisher’s legal fees and costs.

What Are Indemnity Clauses?

Publication agreements vary by publisher and sometimes by contract as well (for example, a publisher may have several different templates for agreements or may have revised its one agreement). A number of such agreements now also include indemnity clauses. “Indemnifying a publisher” means agreeing to pay for any loss, damage, or liability incurred by the publisher, or it can mean that the publisher has the right to claim reimbursement for its loss, damage, or liability from you, the author.

Academic journals include indemnity clauses in their publication agreements to protect themselves from third-party claims against themselves or their authors. Consider the following indemnity example from the publishers of Tax Notes, drawn from the files of one of the authors of this article:

The Author will, at his/her own expense, defend any claim against Publisher based upon a lawsuit alleging the breach of any representation or warranty in the preceding paragraph. Publisher will promptly notify the Author of the filing of any such suit and provide all information required to assist the Author in defending against the suit. The Author shall control the defense, appeal, negotiation, and settlement of such claims; however, the Author may not settle any such claim affecting Publisher’s rights without Publisher’s prior express written permission, not to be unreasonably withheld. Further, the Author shall compensate Publisher for any judgment entered against Publisher as a result of such a suit. Publisher reserves the right, at its own expense, to hire independent counsel to review and comment upon any settlement affecting Publisher’s rights.

As this example shows, indemnity clauses essentially require authors to pay the legal fees and attendant expenses of any lawsuits against the publisher attributable to their published work. Depending on the particular contract, this could mean that, as soon as a publisher receives a legal complaint and hires an expensive law firm that specializes in such cases for its defense, you, the author, are responsible for the legal costs. Whether the lawsuit has merit is immaterial—you may foot the bill either way. In short, as C. Walter and E. P. Richards explain in their excellent 2002 article, “Publish and Perish,” in Engineering in Medicine and Biology, authors signing publication agreements with indemnity clauses expose themselves to litigation expenses that may not be recoverable even if they win the lawsuit. Ironically, in the worst case, an author publishes and perishes!

The increase in liability exposure from publication agreements is especially important to university faculty for several reasons. One is the fact that “research and publication” is a formal part of many job descriptions and thus a condition of employment—a condition that generally requires signed publication agreements. Another is that university authors often deal with controversial subjects that raise the likelihood of litigation and therefore the importance of liability shifting in publication agreements. A third reason is that the presence of indemnity clauses in these agreements even further increases the likelihood that faculty members might settle for reasons having little to do with the merits of a lawsuit. Finally, professors with advanced degrees are presumably intelligent parties who understand contractual obligations: a judge or jury is less likely to believe them if they claim, “I didn’t realize what I was signing.”

How common are indemnity clauses in publishing contracts? This question must be answered separately for each discipline, by studies that thus far in most cases have not been undertaken. One study that we conducted in 2010 of top business school journals, however, found that 33 percent of the contracts included indemnity clauses.

The Scope of Your Employment

It is only toward the end of the publication process that publishers ask authors to sign publication agreements containing clauses that describe the parties’ rights and obligations. Most academics review these publication agreements with no legal guidance, and from the cases we have seen, they often sign them blindly. If an article you write includes your university affiliation—a requirement of some academic institutions—will your university protect you if you are sued?

The legal dispute between criminology professor James J. Fyfe, a former police lieutenant, and his employer, Temple University, is described by Kevin Oates in “Professor Defend Thyself: The Failure of Universities to Defend and Indemnify Their Faculty,” published in the Willamette Law Review. This case demonstrates the difficulties of academic policy in this matter. A lawsuit was brought against Fyfe by the Philadelphia police officer’s union, the Fraternal Order of Police, based on an unflattering article he had published in the Philadelphia Inquirer in 2001 about the disciplinary procedures of the police department. Fyfe was sued for libel but was denied a defense by his university, despite the fact that the faculty union’s collective bargaining agreement required the university to maintain writer’s insurance coverage for union members. In denying Fyfe’s request for a legal defense against what he described as a frivolous and harassing complaint, the university argued that Fyfe had acted privately and without Temple’s authority or permission. He was therefore outside the scope of the university’s insurance coverage.

Contractual agreements with publishers raise further problems for authors when their universities argue that signing such agreements is outside the purview of an employee’s duties or that he or she was working in a personal capacity and not as an agent of the university. To us, it appears that the Temple University administraton had a conflict of interest between supporting a faculty member and controlling costs.

The policy position of the AAUP in such matters can be found in its statement Institutional Responsibility for Legal Demands on Faculty, first issued in 1984 and revised in 1998. It states that “colleges and universities have a responsibility for ensuring legal representation and indemnification to members of their faculties who are subject to lawsuits stemming from their professional performance in institutional service or their conduct of research and teaching.”

University Counsel, You, and Your Publications

The problem with university legal departments is that they generally do not negotiate publication agreements—and with good reason. If they did, they would have to assess the legal consequences of every agreement, read every proposed publication, and discuss the various representations and warranties with the authors in order to ascertain the facts involved (determining, for example, whether the statistical methodology is sound). Simply put, each article (and its associated agreement) would have to be thoroughly reviewed by legal counsel, taking hours of time, and might ultimately be denied anyway—for example, because counsel believed it was too controversial, there was a high risk of infringing on the rights of a third party, or the publication agreement itself was unreasonable. Perhaps this is why most universities leave this hot potato in faculty laps.

If you sign an agreement of your own accord and without legal representation by university counsel, are you acting within the scope of your employment? If you are sued by the publisher, a third party, or both, most likely you would argue that you were acting within the scope of your employment (because publishing is something your university authorizes and requires you to do). But your university administration could argue that it did not authorize you to sign such a contract—and that you’re on your own.
 
Try calling legal counsel at your university and asking about this. We did, but we received only speculative answers about whether the university would pay for an author’s defense in such situations. Your university might argue that nobody requires you contractually to indemnify the publisher and that you can publish your article with another publisher (that does not have indemnity provisions) to perform your job.

Some universities have liability insurance that may cover a lawsuit by a third party suing you because of the publication of your article. Again, however, as illustrated in the Fyfe case, the extent to which that liability insurance will protect you against a liability lawsuit depends on the specific terms of the policy. Whether or not you are even “insured” under the policy may be another issue. For example, perhaps only union members are covered, or there is some other prerequisite—such as that you have been authorized to sign university contracts by a specific administrator. Also, virtually all organizational liability insurance specifically excludes liabilities resulting from contracts into which you entered. This only makes sense: why would any insurance company expose itself to liabilities it cannot control (a liability contractually agreed to by you)?

Author, Protect Yourself

Academic publication contracts entail a significant financial gamble, especially when they contain indemnity provisions, but there are several things you can do to reduce your exposure. One tactic is to look into what protections your university does offer—for example, writer’s insurance, a policy on indemnification, or protection through collective bargaining agreements.

You can also ask for preapproval from your institution’s legal counsel before signing any publication contract. If legal counsel tells you to go ahead, you at least have a better argument that you were acting within the scope of your employment—a less-than-perfect solution (because there is still exposure). If your university’s legal counsel is not willing to preapprove your contract, then you are arguably acting outside the scope of your employment.

With so much uncertainty in this area, you might want to think twice about signing any publication agreement, unless your university agrees to “indemnify” you by covering all of your legal costs and expenses associated with publishing.

This publication contains general information to be used exclusively for educational purposes. This publication is not rendering legal or other professional advice and is not a substitute for such advice.

Rodney P. Mock is assistant professor of accounting and law at California Polytechnic State University. A recognized tax scholar, he has published numerous articles on tax law and policy. His e-mail address is rmock@calpoly.edu. Arline Savage is professor of accounting at Queens University of Charlotte. Her areas of expertise are financial reporting, financial analysis and valuation, fraud examination, business-process analysis, and internal control assessment. Her e-mail address is savagea@queens.edu. Mark G. Simkin is professor of information systems at the University of Nevada, Reno. His research in Internet law, end-user computing, ethics, computer education, and computer crime has appeared in more than a hundred academic journal articles. His e-mail address is markgsimkin@yahoo.com.

 


Comments

The article "How to Publish without Financially Perishing" enlightened me about one of the most frightening liability exposures I've ever read.

Although I should and do know better, in my pride at having an article accepted by a journal, I  have in the past, blindly signed to agree and accept publications' author agreements without careful reading.  And as your article pointed out such a rash acceptance could come back to explode a financial hydrogen bomb under me.  As an aside, I am not so much worried about well considered, well formulated attacks on what I wrote launched by truly injured parties (even if only in within their own perceptions), as I am worried about frivolous lawsuits.  It takes only a very few hours to prepare a lawsuit, but it takes lots of time and is very expensive, for an author, to defend against one of them.

Some years ago, I was the target of a totally unjustified lawsuit when I did someone a favor and did an engineer's inspection report on a house being purchased by a "Mr. John Doe."  Up in the attic were two huge air conditioning condenser-evaporator units which I ascertained were about 20 years old.  I took temperature readings of their outputs and wrote, in my report, that the units appeared to be working properly, but it was impossible to tell when such a unit's useful life had expired (but these were old and failure was to be expected in the not too distant future). Mr. John Doe moved into the house in June.  In August, the units ceased cooling the house.  Mr. Doe sued me, as the engineer who had approved their operating condition," for $14,000 to pay for two new units.

I had to hire an attorney who got the owner's papers on the maintenance of the units--the units had been recharged with Freon a few weeks before the sale of the house.  In other words, those units had corroded tubing and had lost their charges--the refill could not be expected to last much beyond the time of the house sale and an inspection.  The case eventually went to trial: my attorney and I sat in the courtroom waiting for it to begin; the judge, however, had his own timetable--his clerk suggested we settle the case.  We lost the whole day and I owed the attorney $650 for his time.  The next day, we again just sat there all day--the judge seemed to have important work that prevented him from calling our case.  We lost day number two and I now owed the attorney $1300.  On day number three, the judge was still busy and the clerk urged us to settle: I paid John Doe $4,000 and the attorney $2100.  My fee for that house inspection had been $400.  I had done the house inspection as a favor to a real estate agent friend.  I lost his friendship when it came time to share in the payment of those bills.

A possible solution if I may offer it:  If your college does not backstop you in case of a lawsuit, or even if their support is vague, unstated, or doubtful, take out author's and writer's insurance.  Then, whatever happens, whether the suit is frivolous or not, whether it takes a short time to defend (and get it dismissed), or it requires a full blown defense, you have the insurance company footing the defense attorney's bill and, of course, absorbing any financial punishment inflicted on you should you lose a case. 

I.G.

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