Non-compete clauses no longer legal. Why hosted games have one?

Why’s there a non-compete clause in Hosted Games?

The U.S. Federal Trade Commission (FTC) announced that it issued a final rule that bans non-competes across the country in order to promote competition, protect the freedom of workers in changing jobs, increase innovation, and foster the creation of new businesses.

Choice of Games is based in California, so it has to follow the U.S law. Non-compete’s are banned. Yet Hosted Games contract says:

Hosted Games Contract

Your work will receive a 25% royalty on the revenue we receive from distributing your game. (This includes money from advertising, in-app purchases, direct sales where applicable, etc.)
You will retain full IP rights on your game, granting us an exclusive, perpetual license to publish your multiple-choice game electronically.
You cannot publish the same story in a competing format (Twine, Ren’Py, Choices/Chapters/Episodes, CYOA book, Visual Novel, etc).
    You can publish sequels, prequels, spin-offs, etc in a competing format.
    You can publish the same story in a non-competing format (traditional book, side-scrolling computer game, animated computer game).

Doesn’t the FTC ban apply to employer-employee contracts? This isn’t one of those.

All the HG contract is saying is that you can’t go republish the same story as a choice game. It’s about as generous in leaving you free to do other things with the IP as it can be.

And by the way, welcome to the forums. :slight_smile:

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I was about to say that. When it comes to static fiction, most publishers will forbid you from publishing your story elsewhere period, and might even demand exclusive publishing rights for your future works if they find your writing worthwhile. Stuff far less generous than this is not illegal and not uncommon.

I think our OP just saw the word “non-competing” and zeroed in on it, without realizing that they’re actually reading a very non-restrictive publishing license rather than an employment clause.

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Welcome!

That ruling is governing the relationship between employers and employees, not publishing contracts.

EDIT: I will include a link to a fact sheet, in case anybody is affected by this in their day job though, because it truly is a landmark thing in the US. I doubt the employers will be eager to inform… https://www.ftc.gov/system/files/ftc_gov/pdf/Non-Compete-Fact-Sheet.pdf

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It truly is. Non-compete clauses are utter bullshit that serve only the interests of the employer in that the employee is more likely to put up with abuse, and I’m glad they’re goooooonneeeee.

But, like other people have pointed out, what HG has isn’t a non-compete clause. A non-compete clause would be something along the lines of preventing authors to self-publish other works in Twine or whatnot.

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It is, but the most recent Supreme Court decision that guts the Chevron doctrine also threatens other federal efforts to protect workers. Here is an article that goes more in-depth on these issues:

Axios article on the threat to Biden era worker protections

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A non-compete clause and a license agreement with certain restrictions are very different things.

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And he’s a lawyer, so especially listen to him. :slight_smile:

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