Contract negotiation for mid-career game developers (part 2)

by Darius Kazemi on October 10, 2011

in contract negotiation

Welcome to part 2 of my series on contract negotiation for mid-career game developers. Please also check out part 1, which provides a general overview.

A story

You’ve been interviewing with this game studio for two weeks now. Two months if you count time from your initial resume submission. They flew you out, paid for a great hotel and meals, and interrogated the hell out of you. It was a grueling, day-long process. You had to tell your current employer you had a family emergency to take care of. You couldn’t post to Twitter about the fact that you were out of town. You felt like a secret agent.

Turns out you passed muster. They like you. They offer you a job. You’ll be working on a new game that you’re super excited about, with an amazing team of people, some of whom you’ve respected for years. You’ll have a position that gives you more responsibilities, and more chance to make an impact on the final product. You’ve been looking for an opportunity like this forever.

Then you get the employment contract. It’s got some heavy language in it — some of it scary, some of it boring, some of it inscrutable. Stuff about “IP assignment” and non-competition and non-solicitation. You read through it and as best you can make out, you’re not going to be able to work on any side projects while employed there (at least not without the company owning your projects). You’re not going to be able to THINK UP any side projects while employed there — any ideas you come up with while employed belong to the company. And if you leave the company you won’t be able to work for another game studio for a year.

Well, that sucks! But it’s probably not as bad as it looks, right? They seemed like such nice people over there, even the executives. It’s the whole reason you want to work there! I mean, that clause about leaving the company — they wouldn’t REALLY just halt your career for a year after you leave, right? And you asked your hiring manager about the personal projects stuff. They assured you that nobody’s ever been busted for having side projects, as long as they’re not made on company time or resources.

It’s such a great job, and such a cool company, and they’re even offering you $25,000 more than you’re making now! It would be ungrateful to complain! I mean, you probably only barely passed that interview. If you asked them to remove stuff from the contract — stuff that probably a REALLY SMART and well-paid lawyer came up with — they might take their offer back!

You know what, this job is a once-in-a-lifetime opportunity. Best to just sign the contract; it probably won’t matter.

Fast-forward three years. You’ve shipped that awesome game. It was a hit. You’re mid way through working on the sequel now and frankly you’re fucking tired of it. You love your coworkers but if you have to have one more serious discussion about a space marine in power armor you’re going to kill someone.

You’ve got ideas for games of your own. You’ve discussed them with some friends at a different studio. You want to start your own studio with those friends and try your hand at a director-level position — this company was a great place to be a team lead, and the experience was invaluable, but there’s no room for a new director. They have all the directors they need and nobody’s going to be leaving those positions any time soon.

But there’s that contract. You haven’t looked at it in ages, but it looms over you every day now. It’s true that your company’s never stopped someone from leaving and immediately starting a new studio, but as far as you know, nobody’s ever TRIED! And who could blame them, given the contract they had to sign? Your company has some pretty high powered lawyers, and if they came after you it’d make your life miserable for a year.

What if you managed to start a studio but your current employers found out you came up with your project while working for them? It wouldn’t be that hard to put two and two together. You’ve spent years here! What if they come after you and claim ownership of your game?

You think back to that day three years ago when you signed that contract and sigh. If only you’d negotiated.

You found out after the fact that your company was absolutely hurting for someone of your skills. You were the sixth person they’d interviewed for that job and it had been a long, costly process for the company. You didn’t know it at the time but you were in a good position to bargain. You could’ve easily had them modify the IP assignment clause so that it only applied to games that directly competed with the company’s space marine stuff. You could’ve had them drop that non-compete altogether.

But you didn’t, and now you’re in a world of stress that could have been avoided with another couple days of emails three years ago.

Don’t be afraid

The moral of the story is: don’t EVER be afraid to negotiate an employment contract. Do not fool yourself into thinking it’s not going to matter. Almost everyone I know does not negotiate these contracts, and almost everyone I know has an incredibly stressful time leaving their job.

Do not believe that the because the people you’ve met during the hiring process are nice, that they’re not going to be bastards when it comes down to the stuff laid out in the contract.

Relatedly, do not fall for the classic move where the person you’re talking to assures you that the company has never sued an ex-employee over the terms of the contract. I hate this move. It’s moronic. Fortunately, like all moronic strategies, there is an ironclad response.

Hiring manager: “Oh, we’ve never sued an employee over the non-compete. People go to new studios all the time; it’s really only there in case an executive leaves with a bunch of company secrets. We would never do that to you.”

You: “I believe that you would never do that to me — you seem super great and that’s why I want to work with you. But what happens if the company gets bought by someone else? My contract passes to them, and all of a sudden it’s a brand new board of directors and legal team that is in charge of enforcing the terms of my employment contract. For all I know, they’ll be extremely litigious. [Bonus counter move up next...] Since I’m not an executive, and as you say the clause is there for executives, then I guess it doesn’t apply to me. I would really feel more comfortable working for you without that clause in my contract.”

That usually shuts them up.

Above all, do not be afraid that trying to negotiate is going to make them retract their job offer. Let’s say you ask someone to modify something in your contract, and you give a perfectly reasonable explanation. For example: “This non-compete clause means that I won’t have a career for 365 days after leaving your company, and that is unacceptable.” Well 99% of the time, if they really want that clause in there, they will simply come back and say “No, that’s non-negotiable.” Which is totally fine — it means you understand what you’re getting yourself into and what kind of people you’re dealing with.

In maybe 1% of cases, they will retract their job offer because you had the audacity to look out for your own interests. Oh no! Worst case scenario, right? Actually it’s a great thing. That job retraction is the equivalent of them saying, “We are gigantic litigious assholes and we don’t want you working with us.” Well congratulations my friend, you just dodged a fucking bullet!

No matter who you are (except maybe a student fresh out of school), you should never feel like you’re too inexperienced or replaceable to negotiate an employment contract. The fact that they made you an offer means they really, really want you — and at this point you hold a TON of power in the relationship. You know how it’s draining to go through the interview process? It’s even more draining for a company. They’ve spent a ton of time and money making absolutely sure you’re right for them. They want you, and saying “no” might even mess up their project schedules — which at this point they’re probably already shifting around to make room for you.

When you receieve that contract, the ball is in your court. You have the power. Use it wisely and use it well, but above all, use it.

The rest of this employment contract negotiation series is going to cover how and when to use that power. But no matter what else I cover, this article will always be the most important one. It’s my sincere hope that you internalize what I’ve said here.

(DISCLAIMER: I am not a lawyer. The stuff I’m going to talk about is not to be construed as specific legal advice. I’m mostly sticking to the general principles of contract negotiation, and what to look out for in an employment contract. What I say here applies specifically to the United States, as I know nothing about the law or contract negotiation etiquette in other countries. What I say here may screw you over. This advice is for mid-career game developers: if it’s your first job out of school, I dunno, maybe you should just sign what you’re given to get that foot in the door! (But maybe not.) And finally: if you have any specific questions about the legality of something, CONSULT A LAWYER.)


Scott Macmillan October 10, 2011 at 1:31 pm


One thing you can do, if getting smacked with a “you don’t work for broadly-defined competitors for X months” is to say that if they really want to leave that in, they should feel free to compensate you up front with a lump-sum payment for the time you won’t be able to work in your chosen field. Given that this is a totally fair thing to ask for, you are still being reasonable while at the same time protecting your prerogatives.

Jeff Ward October 10, 2011 at 8:08 pm

Although I agree with negotiating out non-competes (or at least making them so specific that they might as well be removed) IP assignment is actually one that I finally understand thanks to this:

Basically, IP assignment clauses are there to protect the company, and a good lawyer won’t take them out. Generally, it’s a shield clause, not a sword clause, because it’s hard to prove what you did or didn’t do in your spare time, while you were at / away from the company.

Scott Macmillan October 11, 2011 at 8:50 am

Granted, I can see that being intended as a shield, but it’s a sword to the employee none the less – right?

My past experience read a lot like that Onstartups answer – I asked the company to further clarify the “business of the company”, which we narrowed down to a large subsection of video games. I was then free to work on things I wanted outside of that definition. We also put in a review process in case I wanted to work on something in that area, and they weren’t interested in it.

All of which sums up to – you can definitely negotiate. Don’t be scared to.

Darius Kazemi October 11, 2011 at 9:07 am

I was going to write something about narrowing definitions in response to Jeff’s comment, but looks like Scott did the hard work for me here. Thanks Scott!

Colm October 12, 2011 at 6:38 am

Hear hear!

You can only negotiate contract wording BEFORE you sign it.

Ebyan Alvarez-Buylla October 14, 2011 at 4:07 pm

You can negotiate contract wording at any time, provided both parties are willing. You have much more leverage before it’s signed, of course ;)

Brian 'Psychochild' Green October 16, 2011 at 8:33 pm

Standard disclaimer applies: I’m not a lawyer, this isn’t legal advice.

Also, understand your local/state laws. Sometimes an employer will ask for something that goes against state laws but is part of their boilerplate contracts for studios in multiple states. For example, this type of IP assignment is unenforceable in California. But, it is still best to get it removed from the contract to avoid any future complications, such as if you transfer to another company studio in another state.

Ultimately, the best option is still to get a lawyer to look things over. It’ll cost a bit of cash, but better safe than sorry in the long run. You never know where life will take you in the future, as Darius points out.

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