A reader of this blog sent a link to a minnow-related news story, a little piece in the New York Times that didn't merit much space.
The article might have been more suited to the business section, since it's all about a remarkably common business practice, one that Barry O'Callaghan's school of fish has found useful. It's made Mr. O'Callaghan the epitome of the gombeen man.
Ever wonder why you can't find a contractor to take on a small job?
Because that contractor has gotten stiffed more times than he cares for on the small jobs.
Lawyers cost money, so if the bottom line on the unpaid bill is less than the potential legal fee, you write off the loss and take it as a lesson learned. No more small jobs that aren't collectible.
Houghton Mifflin Harcourt subbed out some components of their textbook production to Inkwell Publishing Solutions, which in turn hired freelance writers to compose the paragraphs and chapters of textbooks that HMH then prints to order for state school boards which require custom wording and topics.
Unfortunately for the whale-swallowing minnow, cash flow has been quite an issue and HMH couldn't pay Inkwell for the contracted work. Work which the freelancers did, and which Inkwell subsequently turned over to HMH.
So there's Inkwell, out of pocket, and when the freelancers turned to their employer for payment, the pockets were empty. Inkwell was skint.
Unlike the contractor who will make good with his material suppliers to maintain their favor and future credit privileges, the owners of Inkwell told the freelancers to go scratch when they came looking for their paychecks. No money from Houghton Mifflin Harcourt, no money to the people who wrote the textbooks that HMH will be selling.
And the freelancers who are owed three or four thousand dollars won't sue HMH because a lawyer would be more expensive than what they're owed.
As a business model, it works, as long as there are thousands of freelance writers looking for work. That means there's a nearly endless supply of labor, willing to grab the bait and end up on the hook.
20 comments:
From an email distributed to all HMH employees today:
The information presented in yesterday’s New York Times article is incorrect. Houghton Mifflin Harcourt does not owe Inkwell Publishing Solutions any money. To help clarify the information, we have contacted the New York Times and requested that a correction be issued. We are not in a position to comment on why Inkwell has failed to pay its freelancers—but it is not due to non-payment of money owed, as the article inaccurately asserted.
Could it be a case of Inkwell management siphoning off cash and leaving their sub-contractors high and dry?
Pity that HMH didn't have the statement ready when the NYT asked for one. Maybe the reporter would have pressed Inkwell for more info.
Sounds like a very good story is brewing.
Not paying their freelancers has been an ongoing issue for Inkwell. The owners of the company are thieves. Israel and Patty are two people without any morals. They only seem to care about fattening their own bankrolls. People-myself included-worked for them several years ago and we had the same issue with payment. We were never paid. One freelancer threatened to chain herself to her desk unless she was given a check from Israel so she could pay her long overdue rent. He said he was waiting for payment from Houghton Mifflin-an obvious lie. She said in the interim why don't you sell your diamonds and your private jet so you can pay us. Houghton Mifflin Harcourt has continued to give Inkwell work and I assume paid them. My conclusion is that Patty and Israel just kept the money for themselves. Someone should report them to the Manhattan District Attorney's Office.
You'd think that someone at HMH would make such a request. They've gotten some bad publicity due to Inkwell's actions and finger-pointing.
Same story, different company:
http://www.madison.com/archives/read.php?ref=/wsj/2004/10/24/0410250081.php
I was one of the freelancers stiffed in this gig. Funny follow-up: Kasdorf, who owned Impressions (the company for which the freelancers did all that work) ended up a vice-president for Apex (the company that conducted the assets-only sale and left freelancers high and dry). "Lost his entire investment" yet went back to work for them.
Stinks. So does this HMH/Inkwell thing.
There are those who look after the well-being of their employees, and put their salaries first.
Then there are those who go into business to make money and if that means the employee loses out, it's too bad for them.
Is there any on-line forum (like AbsoluteWrite for authors) that could compile warnings and red flags on companies that hire freelancers?
Don't let legal fees stop you from collecting. Go to small claims court, where you don't need an attorney. Or form a class-action group to share the fees. Or join a writer's group with a freelance grievance committee (the National Association of Science Writers is one example).
A lawyer would NOT be too expensive. As a freelancer, I have used a lawyer to draft a letter for me and send it to the offending company along with a copy of my contract. One letter and I have always been overnighted payment in full. The cost of the letter -- $50. Now, the last time I had to do that was about 6 years ago, and was in the Midwest where costs are low. So it could be around $100 today. Not much investment to get your money back. No company wants to take the time to go to small claims court.
Freelancers who create content can go directly to the publisher. If you are not paid for content, the publisher doesn't own the copyright -- you do. So they cannot legally print and sell the book until you are paid.
There are ways for freelancers to make sure they are paid for their work. You just have to be willing to stand up on your own behalf and expect what you were promised. It may mean that you never work for a company again, and that can be scary, but I don't think that is as scary as losing thousands of dollars.
If HMH does not owe Inkwell money, then why didn't the company respond to requests for interviews last week? Let's see some proof. Maybe that internal memo was just designed to keep staffers from worrying about their own paychecks.
Can anyone comment on the copyright issue? Do freelances retain copyright if they haven't been paid, or does that depend on the contract terms?
How about the Freelancers Union (based in NYC)? Could they be of help to these workers?
My reply to a comment on my blog about this same issue:
"As I said in my post, we still don’t have all the facts. It would greatly surprise me if a major textbook publisher stopped paying suppliers. To do so would be interpreted by many — freelancers, textbook writers, sales and editorial staff, instructors, school boards — that the company would soon be out of business. It would be hard to retain freelancers and employees, and instructors and agencies that adopt textbooks would likely look to other options.
That said, we need to wait for more information. A reply to a blog post from an anonymous contributor is not sufficient."
With small claims court, if you win and the client still won't pay, the way to collect is you find out where the company's assets are located (in the case, it's apparently and offshore division of HMH) and then hire a marshall to go after them. You find their bank through a division of American Express, the court tells you the name of it. You're entitled to about 10% interest per year for up to 20 years so some people don't try to collect for a while. Also if the company does not show up in court you win by default. You can get the ball rolling easily by doing it online, just do a search for "file small claims court" or some such. If they are officially bankrupt I'm not sure you can ever collect.
I'm reading so much about HMH and how they are somehow responsible for Inkwell's poor management. First, this is the NY Times we're talking about. A struggling newspaper looking for sensationalism wherever they can find it. Second, MobyLives made a single phone call to HMH and they fully explained what was going on.
http://mhpbooks.com/mobylives/?p=7501
Finally, John Soares disclaims the validity of "anonymous" postings on this blog. Unfortunately, John, many like myself, who work at HMH, need to remain anonymous. But be assured, that many of us happily watch and follow this blog.
It is not just writers who have been screwed. Many design/production workers, me included, have been stiffed for thousands of dollars. If HMH really has paid then they should do something to help expose the pondscum owners like providing check numbers, amounts, dates, cancelled checks showing the money was received.
Anonymous, I certainly understand your need to be anonymous.
I wish HMH would issue a press release or make a public statement about this issue. The longer the NYT piece remains unchallenged -- outside the blogosphere -- the more damage to HMH's reputation, and potentially its bottom line.
Please read the NYT article. It quoted freelancers and one of Inkwell's owners. It didn't state that HMH didn't pay Inkwell.
A postscript is now at the bottom of the New York Times story:
“The About New York column on Sunday, about the closing of Inkwell Publishing Solutions, a book development company in Manhattan, reported that about 50 of its freelancers were still owed hundreds of thousands of dollars for their work on textbooks commissioned by the publisher Houghton Mifflin Harcourt. In an e-mail message to the freelancers, Inkwell’s president blamed slow payments by Houghton, which did not respond to three requests for comment before the column was published. On Monday, a spokesman for Houghton said it had made the “vast majority” of its payments on time to Inkwell, with the final two checks it owed issued on May 8 and June 1. Inkwell ceased operations in mid-May.”
Katherine O'Moore-Klopf of http://editor-mom.blogspot.com/ brought it to my attention.
I know of two other companies that have been saying they're owed money from HMH for over a month. So really wouldn't know who to believe at this point, but I wouldn't lean towards believing Harcourt if any of these companies owed me money.
It's not unlikely that HMH is paying invoices 90-120 days past due, or more, because of their financial struggles.
To not pay at all would be corporate suicide; to pay very late is common practice among the industrial giants dealing with their little suppliers.
I worked for another development house in the early 'aughts, and we did work for a publisher who bounced checks when we billed.
We fought and fought to get paid, and once we finally received what we owed, we vowed to never do business with that company again.
Who was it? Riverdeep.
Some months later, they bought Houghton Mifflin, and I knew it was time to start looking for another industry.
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