UPDATE: Harlequin publisher Donna Hayes responded: “Our authors have been recompensed fairly and properly for their work, and we will be defending ourselves vigorously.” The company added that “this is the first it has heard of the proceedings and that a complaint has not yet been served.”

The suit alleges that the publisher owes some authors eBook royalties from contracts signed between 1990 and 2004. During those years, these authors “entered agreements” with a Swiss corporation created by the romance publisher.

The lawsuit outlined the problem: “However, Harlequin, before and after the signing of these agreements, performed all the publishing functions related to the agreements, including exercising, selling, licensing, or sublicensing the e-book rights granted by the authors. Instead of paying the authors a royalty of 50% of its net receipts as required by the agreements, an intercompany license was created by Harlequin with its Swiss entity resulting in authors receiving 3% to 4% of the e-books’ cover price as their 50% share instead of 50% of Harlequin Enterprises’ receipts.”

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In the interview, Raab (pictured, via) defended her imprint’s standard practice of giving authors a 25% royalty rate for eBooks: “We have an infrastructure to support.” She outlined the values of what traditional publishers have to offer whether they are new in their writing career or established New York Times bestselling authors.

When asked on whether or not she fears big-name writers will take a less traditional publishing route, she replied: “I think about that a lot because I know it’s on authors’ minds. And I think it’s incumbent on every publisher to do a better job than they’ve ever done before — more creative on marketing and eBooks, working in partnership more closely with their authors, keeping them in the loop, publishing more strategically.”

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