Petition — HA Artists & Associates, Inc. v. Actors' Equity Assn.

Supreme Court brief1981

Ask Donna

What actually matters in this document.

Text

No. 8 0- 3 4 & i e% Court, UL §.

LED

IN THE | AUG2 1 1989

Supreme Court of the United RODAK, JR., CLERK

Ocroser TERM, 1979

H.A. Artists & Associates, Inc., S.T.E. ReprEsENTATION

Lrp., J. Micnari, Buoom, Lrp., Don Bucnwatp & As-

sociaTes, Inc., Manse Fieups, Inc., Henperson/Hocan

Acency Inc., Oppenneim-Curistige Associates Lt,

Jorn Prrr Lrp., Tatenr Representatives Inc., D.M.L

Tarenr Associates, Lrp., JEAN THomas Acency, Ino.,

Bos Warers Acenoy, Inc., Jacosson-Witper, Inc.,

Wuium D. Cunnincuam & Associates, Ino., TRanum

Rosertson & Hucues, Inc., Monty Smpver Acency Lp.,

Bret Apams, Limrrep, Micnarn Tuomas Agency, Inc.,

Lester Lewis Associates, Inc., LEAVERTON ASSOCIATES

Lrp., Joz Jorpan Tatent Acency Inc., Ractyn-SHam-

sky, Lrp., ANN WricHT REPRESENTATIVES INC.,

Petitioners,

—against—

Actors’ Equity Association, an unincorporated association,

and DonaLp Gropy,

Respondents,

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

CuarLes DoneLaNn, Esq.

311 Main Street

Worcester, Mass. 01608

(617) 791-3511

Howarp Breinveu, Esq.

530 Fifth Avenue

New York, New York 10036

(212) 221-3760

Of Counsel:

BownpritcH & Dewry

Souin & BREINDEL, P.C.

Questions Presented

The questions presented must be considered in light of

major factual differences between American Federation of

Musicians v. Carroll, 391 U.S. 99 (1967) (“Carroll”), the

authority followed by the Courts below and this case. In

Carroll, supra, the defendant union did not have a collective

bargaining agreement with the employers of the union’s

members and the booking agents, who obtained jobs for

the union members, were not licensed as employment agen-

cies under New York State law. In the present case, Actors’

Equity Association (“Equity” or the “Union”), the defen-

dant union, has collective bargaining agreements with the

employers of its members which set forth the minimum

wages the employers must pay union members and the

theatrical agents are licensed as employment agents.

The questions presented for review in this petition, under

these circumstances, are:

1. Should the holding in Carroll that booking agents are

members of a “labor group” and thus can be regulated with

antitrust immunity by the union whose members they repre-

sent be confined to fact situations where the union does not

have a collective bargaining agreement with the employers

of its members?

2. Should Carroll, which primarily dealt with a union’s

regulation of orchestra leaders (who are themselves union

members) who compete with union members and wko em-

ploy union members, be overruled to the extent that it holds

that agents who are employed by union members are part

of the union’s “labor group”?

3. Should the holding in Carroll permit Equity to uni-

laterally forbid franchised theatrical agents from charging

commissions on scale or minimum jobs obtained for Equity

members?

4, Should the holding in Carroll be extended to permit

the Union, which prohibits its members from employing

theatrical agents who are not franchised by the Union, to

extract franchise fees from theatrical agents as payment

for the right to be regulated and dominated by the Union?

lil

TABLE OF CONTENTS

PAGE

Questions Proememted — <......:....n.00ccccsssconseseseerserenseiatnsscenseseosi i

aaa TOE gia accnssincscttcsscninasinesnceipnindanacttaneniantenansiea 1

TN Si dal acndbeclniasta dae ihanmapbanghntamotainenaennilia 2

I TN ica ihatacictiLicaciccteonsnckudenenndiasiimaipisisiaticestion 2

NE TE SIG oisciissscskenntseisedecocainipedyieanbeaeistpanien 3

Bh FI iirc cctceccctitncnceaiancdenatncieancbitinncinneaiein 3

i I ee enrich eeirntircieintsiceeinne 4

FT ON 7

Reasons For Granting the Wit -2.0........0.cececcceeceeeeseeees %&7

I. The Courts Below Improperly Interpreted and

Extended This Court’s Decision in Carroll ........ 11

II. Carroll, as Applied to Agents, Should Be Over-

MEET TOR ge Ne EROS Sie sR IN are NA der 15

III. The Courts Below Improperly Extended Car-

roll to Permit Unions to Require Agents to

ee NN a scetnaincinnie alice denen cae 16

IV. The Courts Below Improperly Extended Carroll

to Permit Unions to Extract Franchise Fees

From Compulsorily Franchised Agents For the

Privilege of Being Regulated and Dominated

Oe Gat CE ii a a ce ees 17

fF AS AE I SRE Te POR YPC R SE REIT Oy IMTS ES 19

APPENDICES PAGE

Appendix A:

Second Circuit Affirmance of District Court’s

Opinion Dismissing the Complaint, dated May 23,

1980. 1980-2 Trade Reg. Rep. 63,376 ......00.000.000...... A-1

Appendix B:

District Court Opinion Dismissing the Complaint,

dated October 24, 1979, 478 F. Supp. 496 (1979

RSMUAMTAIN GD chs sehen sceictaicchsasecildestidtatenasntsaroinsassstanbiewasiuzatetoeduens B-1

Appendix C:

Second Circuit Affirmance of District Court’s De-

nial of a Motion for Preliminary Injunction, dated

NIN OR I ie iceica lions petstb aes cdetternachacatintacccsasuclcs C-1

Appendix D:

District Court’s Denial of A Motion for Prelimi-

nary Injunction, dated June 29, 1978 .....0000. D-1

Appendix E:

Clayton Act §20 (15 U.S.C. §52) oon ccccceeeee E-1

Appendix F:

Norris-LaGuardia Act §$5-15 (29 U.S.C. §§105-

BEE, Maidan hanisneapleos weeks deni iaicaicleblees ike ak el F-1

Appendix G:

§§180, 183, and 185 (“Employment Agencies”) of

the General Business Law of the State of New

SOEM. (RCMNND BOOP) co G-1

TaBLE oF AUTHORITIES

Cases: : PAGE

Albrecht v. The Herald Co., 390 U.S. 145 (1968) .......... 9

Adams, Ray & Rosenberg v. William Morris Agency,

411 F.Supp. 403 (C.D. Ca. 1976) ...22.2.......2....c.scec-seeee 12n

American Federation of Musicians of The United

States and Canada v. Carroll, 391 U.S. 99 (1968) ..passim

Connell Construction Co., Inc. v. Plumbers & Steam-

fitters Local Union No, 100, 421 U.S. 616 (1975) ........ 9

Dr. Miles Medical Company v. John D. Park & Sons

Company, 220 U.S. 373 (1911) ...........-....c.cccceeceseeeseses 9

Duplam Corp. v. Deering Milliken Inc., 444 F.Supp.

I SIs. BORD ‘ccicchaselabicaccilhdeicssancinahnaplanbeiccbabemsaaiiead 9-10

Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975),

rehearing denied, 423 U.S. 886 (1975)... eee 9

H.A. Artists, et al. v. Actors’ Equity Ass’n and Donald

Grody, 478 F.Supp. 496 (S.D.N.Y. 1979) ~............... passim

H.A. Artists, et al. v. Actors’ Equity Ass’n and Donald

Grody, 1980-2 Trade Reg. Rep. 62,376 (2d Cir.

1980) .. iksbidsiiralesitg ida eedeiadapabanaisateusbicdasaaaildl passim

Home Box Office, Inc. v. Director's Guild of America

Inc., 88 F.B.D. 423 (S.D.N.Y. 1979) ...........ccccsccecsecensee 11

Interstate Circuit v. U.S., 306 U.S. 208 (1939) ................ 9

Jou-Jou Designs v. ILGWU, 1980-2 Trade Reg. Rep.

Gh DRY. WH 8

Klor’s Inc. v. Broadway Hale Stores, Inc., 359 U.S.

OE CR antesiasicsninsctrinenictniicte pital aaa 9

PAGE

Local Union No, 189, Amalgamated Meat Cutters &

Butcher Workmen of North America, AFL-CIO vy.

Jewel Tea Co., Inc., 381 U.S. 676 (1965)... 9

Packaged Programs Inc. v. Westinghouse Broadcast

Co. Inc., 255 F.2d 708 (3d Cir. 1958) 2... eee 10

Radiant Burners, Inc. v. Peoples Gas Light & Coke Co.,

FG aR Wha none SON Rn aa 9

Redfield v. AFM, 603 F.2d 214 (2d Cir. 1979) 2.0... 13n

United States v. General Dyestuff Corporation, 57 F.

RMR My UID ps cscicccsnsnsssncorceneasanonee 9

Other Authorities:

Bartosic, The Supreme Court, 1974 Term, 62 Va. L.

EST RAE SIN AS eae Oe Oe lin

Case Notes, Labor Law-Antitrust Liability of Labor

Unions, 15 B.C. Ind. Comm. L. Rev. 595 (1974) ........ 11n

Consolidated Express; Antitrust Liability for Illegal

Labor Activities, 80 Columbia Law Review 644

CRIIUEE BOO i ceccsticiiesinnccocce slidiiDiaidlasniiiaianbiandica dea Stan dill i 10

DiCola, Labor Antitrust: Pennington, Jewel Tea and

Subsequent Meandering, 33 U. Pitt. L. Rev. 705, 747

(1972). .......... sosessueesnesensceteesnseeonee en Ae Rr dae ee 12n

Statutes and Rules:

Clayton Act (15 U.S.C. §§12-27)

I 2

a 3

§20 (29 U.S.C. §52)

Vii

PAGE

New York General Business Law Article II

§§180, 183, 185 (McKinney 1968) .......0.0...0. eee 2,4

Norris-LaGuardia Act §§5-15 (29 U.S.C. §§105-115) .... 2

Sherman Act §1 (15 U.S.C. §$1 et seq.)

ECU Rie ED cacndasbacsedasiconeniebin: sepiihilgiiiadiebcaiiA Lubes 2,3

Rey En NE sishicsscinhioseniteanmoninstioecihisiensnsauiidipaliodene: 2,3

No.

IN THE

Supreme Court of the United States

Octroser Term, 1979

H.A. Artists & Associates, Inc., S.T.E. Representation

Lrp., J. MicuarL Buoom, Lrv., Don Bucnuwaup & As-

sociaTEes, Inc., Marse Fretps, Inc., Henperson/Hocan

Acency Inc., Oppennerm-Curistire Associates Ltp.,

JoeL Pirr Lrp., Tatent Representatives Inc., D.M.I.

Tatent Associates, Lrp., JEAN Tuomas Acency, Inc.,

Bos Waters Agency, Inc., Jacosson-Witper, INc.,

WiuiaMm D, Cunnincuam & Associates, Ino., Tranum

Rosertson & Hueues, Inc., Monty Stuver Acency Lrp.,

Bret Apams, Limirep, Micnart THomas Acency, Inc.,

Lester Lewis Associates, Inc., LEAvERTON ASSOCIATES

Lrp., Joz Jorpan Tatent Acency Inc., Ractyn-SHam-

sky, Lrv., ANN Wricut Representatives INC.,

Petitioners,

—against—

Actors’ Equity Assocr1ation, an unincorporated association,

and Donaup Gropy,

Respondents,

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Petitioners respectfully pray that a writ of certiorari

issue to review the judgment and opinion of the United

States Court of Appeals for the Second Circuit entered in

this proceeding on May 23, 1980.

Opinions Below

The opinicn of the Court of Appeals [reported at 1980-2

CCH Trade Reg. Rep., {| 63,376 (2d Cir, 1980)] is attached

as Appendix A to the petition. The opinion of the District

Court is reported at 478 F.Supp. 496 (S.D.N.Y. 1979) (Mot-

ley, J.). A copy of that opinion is attached as Appendix B

to this petition. An earlier decision of the Court of Appeals,

a copy of which is attached to this petition as Appendix O,

affirmed the District Court’s denial of a motion for a pre-

liminary injunction, a copy of which is attached to this

petition as Appendix D.

Jurisdiction

The judgment of the Court of Appeals was entered on

May 23, 1980. This Court’s jurisdiction is invoked under

28 U.S.C. $1254.

Statutes Involved

1. Section 1 of the Sherman Act (15 U.S.C. §1) provides,

in pertinent part:

“Every contract, combination in the form of trust or

otherwise, or conspiracy, in restraint of trade or com-

merce among the several states, or with foreign nations,

is declared illegal...”

2. Section 2 of the Sherman Act (15 U.S.C. §2) provides,

in pertinent part:

“Every person who shall monopolize, or attempt to mo-

nopolize, or combine or conspire with any other person

or persons, to monopolize any part of the trade or com-

merce among the several] states, or with foreign nations,

shall be deemed guilty of a misdemeanor...”

3. Secticn 6 of the Clayton Act (15 U.S.C: §17) provides,

in pertinent part:

“The labor of a human being is not a commodity or

article of commerce. Nothing contained in the antitrust

laws shall be construed to forbid the existence and

operation of labor, agricultural, or horticultural ofgan-

‘izations, instituted for the purposes of mutual help,

and not having capital stock or conducted for profit, or

to forbid or restrain individual members of such organ-

izations from lawfuliy carrying out the legitimate ob-

jects thereof; nor shall such organizations, or the

members thereof, be held or construed to be illegal

combinations or conspiracies in restraint of trade,

under the antitrust laws.”

4. Section 20 of the Clayton Act (15 U.S.C. §52) is at-

tached to this petition as Appendix E.

5. Sections 5-15 of the Norris-LaGuardia Act (29 U.S.C.

§§105-115) are attached to this petition as Appendix F.

6. Sections 180, 183 and 185 of Article 11 (“Employment

Agencies”) of the General Business Law of the State of

New York (McKinney 1968) are attached to this petition

as Appendix G.

Statement of the Case

A. Introduction

Petitioners are theatrical agents (sometimes hereinafter

referred to as “Agents”). Equity is a union whose members

include virtually all actors appearing in legitimate thea-

trical productions in the United States. Respondent, Donald

Grody, is Executive Secretary of the Union.

This is an action for injunctive relief (only) under §16

of the Clayton Act (15 U.S.C. §26) alleging that the Union’s

conduct is violative of Sections 1 and 2 of the Sherman Act

(15 U.S.C, §§1 and 2). The Agents claim that the Union’s

compulsory franchising system for theatrical agents which

. prohibits Union members from dealing with nonfranchised

agents such as petitioners, constitutes a price fix, an agree-

ment not to compete, a group boycott of nonfranchised

agents and monopolization, in violation of the Sherman Act.

B. Statement of Facts

“Actors’ Equity has collective bargaining agreements

with most major theatrical producers in New York and

elsewhere, with most off-Broadway producers, and with

many other theatrical producers throughout the United

States. The terms negotiated with various producers

groups are the minimum terms and conditions of em-

ployment. An actor is free to negotiate salary or terms

more favorable than those prescribed in the collective

bargaining agreement, but neither the actor nor the

producer [nor the agent] is permitted to diminish the

wages set forth in the relevant collective bargaining

agreement.

Theatrical agents are independent contractors in the

business of placing their actor clients in jobs with pro-

ducers. Theatrical agents receive commissions, based

on a percentage of earnings of the client, only if they

succeed in obtaining employment for their clients.

Theatrical agents who operate in New York City

[including all petitioners] are required to be licensed

as employment agencies and are regulated by the De-

partment of Consumer Affairs of New York City pur-

suant to Article 11 of the General Business Law of the

State of New York, which sets the maximum commis-

sions [10%] employment agencies may charge and has

specific ‘provisions! dealing with theatrical agents.”

(478 F.Supp. at 497, B2)

* See §§180, 183 and 185 (Appendix G).

“At issue in this case is Equity’s system of ‘fran-

chising’ theatrical agents. Agents pay a fee and agree

to abide by certain restrictions in return for certifica-

tion as ‘franchised’ agents. Equity encourages agents

to become franchised by *. bidding its members to

deal with unfranchised agents. Equity members who

negotiate contracts using the services of unfranchised

agents are subject to union discipline, including fines.”

(1980-2 CCH Trade Reg. Rep. at page 75,905, A1)

“In order to enforce its rule that members deal only

through franchised agents, Actors’ Equity has advised

members that they could be disciplined for dealing with

nonfranchised agents. It was Actors’ Equity’s prac-

tice to send a letter to an actor dealing with a non-

franchised agent, warning the actor that he could be

disciplined—a copy of the letter was also sent to the

nonfranchised agent. In 1979, Actors’ Equity began

disciplinary proceedings against members who were

dealing with nonfranchised agents [such as _peti-

tioners]|—members who would not agree to cease deal-

ing with nonfranchised agents were fined after hear-

ings.” (478 F.Supp. at 499, B4)

“The most important of the restrictions placed upon

franchised agents is the requirement that they re-

nounce any right to take commissions on contracts

under which an actor receives scale wages. Scale wages

are set by a collective bargaining agreement between

Equity and theatrical producers, to which the agents

are not parties. To the extent that a contract includes

provisions under which an actor will sometimes receive

scale pay (as for rehearsal periods and ‘chorus’ em-

ployment) and sometimes more, the franchise regula-

tions deny the agent any commission on the scale

portions of the contract. Franchised agents are also

precluded from taking commissions on certain expense

money paid to union members; commissions are limited

on wages within 10% of scale pay; and agents must

allow actors to terminate a representation contract if

the agent is unsuccessful in procuring employment for

the actor within a specified period of time.” (1980-2

Trade Reg. Rep. at pages 75,905-6, A1-2)

Prior to October, 1977, Equity’s franchising rules pro-

hibited agents from charging commissions on most “scale”

jobs. Thus, agents would receive no compensation if they

obtained a job for an actor which paid the minimum or

scale salary provided for in the collective bargaining agree-

ments between Equity and the producers. In addition,

Equity prohibited commissions on rehearsal pay, on pay

for out of town expenses, and un “chorus” jobs. Moreover,

the Union could unilaterally reclassify non-chorus jobs as

chorus jobs.

In addition, agents are required to pay franchise fees to

Equity. These fees are deposited by Equity in its general

treasury and Equity makes no attempt to cost justify the

amounts it charges as franchise fees. The franchise fees:

“|. are not segregated from other union funds. While

the union argues that they are necessary to pay the

union’s expenses in administering the franchise system,

no evidence was presented at trial to show that the

union’s costs justified the franchise fees.” (1980-2

Trade Reg. Rep. at page 75,908, A4)

In October, 1977, Equity promulgated new Equity

Agency Regulations. The new Equity Agency Regulations,

inter alia, prohibit commissions on: all scale jobs, on chorus

jobs, on rehearsal pay, and on out-of-town expense money.

In fact, the new regulations eliminated those limited areas

im which commissions on scale were previously allowed and,

further, doubled the franchise fees. Due to their dissatis-

faction with the then proposed new Equity Agency Regula-

tions, the Agents advised the Union that they “cannot in

good conscience accept” the preposed new regulations. As

a result, most of the Agents have remained unfranchised.

Because of continuing pressure brought by the Union upon

the Agents and their actor-clients (Union members who

employ petitioners), the petitioners commenced this action

in May, 1978 for injunctive relief only.

C. Proceedings Below

The complaint and the Agents’ motion for a preliminary

injunction prohibiting the Union and its members from

boycotting the Agents during the pendency of this action

were filed on May 26, 1978. The court below denied the

motion for a preliminary injunction [Appendix D]. The

Court of Appeals, in a memorandum opinion, affirmed

[Appendix C]. The bench trial of the action commenced

on June 21, 1979. On October 24, 1979, Judge Motley

rendered her decision [Appendix B] dismissing the com-

plaint. On May 23, 1980, in an opinion written by Judge

Lumbard [Appendix A], the Court of Appeals affirmed.

Reasons For Granting the Writ

The decisions below should be reversed not merely be-

cause they are wrong—but because in this day and age they

permit unions under the guise of compulsory franchising

and licensing systems to absolutely and arbitrarily domi-

nate, regulate and monopolize the business lives and careers

of independent contractors who, as employment agencies,

have their commissions and other facets of their business

regulated by a state agency. These independent contractors

are agents who are employed by and render services to

union members, but are not union members and do not

receive any union benefits.

In addition to Equity, many other talent unions such as

American Federation of Musicians, Screen Actors Guild

(“SAG”), American Federation of Television and Radio

Artists (‘AFTRA”), and the Writers Guild of America

have compulsory franchising systems. As noted at page 9

of Equity’s brief to the Court of Appeals, “Equity is only

one of many talent unions which regulates talent agents.”

The importance to unions of this issue is underscored by the

amicus curiae participation below of SAG and AFTRA

who, with Equity, are affiliates of the AFL-CIO.

If the decisions below are allowed to stand, the delicate

balance between conflicting federal labor and antitrust pol-

icles wi'l be upset to the detriment of sound antitrust policy

with no countervailing benefit to labor. In Jou-Jou Designs

Inc, v. ILGWU, 1980-2 Trade Reg. Rep. 63,402 (S.D.N.Y.)

at page 76,047, the court noted:

“We are thus confronted, as many courts have been,

with the interaction of antitrust policy and labor policy,

expressed in statutes and Supreme Court decision.

The accommodation between these policies, character-

ized by one commentator as ‘intrinsically incompatible’,

presents ‘a troublesome and unruly issue.’ Commerce

Tankers v. National Maritime Union of America, 553

F.2d 793, 801 (2d Cir. 1977), quoting Meltzer, Labor

Unions, Collective Bargaining and the Antitrust Laws,

32 U. Chi. L. Rev. 659 (1965).”

In “Consolidated Express: Antitrust Liability for Illegal

Labor Activities,” 80 Columbia L. Rev. 644 (April 1980),

the author stated at page 644:

“Courts have struggled for decades to resolve the clash

between the procompetitive purposes of the antitrust

laws and the anticompetitive impact of the labor laws.”

In this regard, it should be noted that in most cases involv-

ing conflicts between federal labor and antitrust policies,

the courts are concerned with the “congressional policy

favoring collective bargaining” [see, e.g., Connell Construc-

tion Co., Inc. v. Plumbers & Steamfitters Local Union No.

100, 421 U.S. 616, 622 (1975) ; Local Union No, 189, Amalga-

mated Meat Cutters & Butchers Workmen of North America

AFL-CIO v. Jewel Tea Inc., 381 U.S. 676 (1965)], a con-

cern which is not present here. If Equity is precluded from

franchising agents, its collective bargaining agreements

with producers will not be affected and the policies of econ-

omic freedom which support the antitrust laws will be

furthered.

Stripped of the immunity provided by the holding below

that agents are part of the labor group, the Union’s fran-

chising system violates the Sherman Act because:

A. it constitutes a group boycott which totally pre-

vents the Agents from serving as agents for actors and

forecloses them from competing with Union-franchised

agents. Radiant Burners, Inc. v. Peoples Gas Light &

Coke Co., 364 U.S. 656 (1961) ; Klor’s, Inc. v. Broadway

Hale Stores, Inc., 359 U.S. 207 (1959) ;

B. its regulation of agents’ commissions constitutes

both horizontal and vertical price fixing. Albrecht v.

The Herald Co., 390 U.S. 145 (1968) ; Dr. Miles Medical

Co. v. John D. Park & Sons Co., 220 U.S. 373 (1911) ;

Goldfarb v. Virginia State Bar, 421 U.S, 773 (1975),

rehearing denied, 423 U.S. 886 (1975) ;

C. it constitutes an agreement not to compete by

horizontal competitors. Interstate Circuit, Inc. v. U.S.,

306 U.S. 208 (1939) ; United States v. General Dyestuff

Corporation, 57 F.Supp. 642 (S.D.N.Y. 1944) ; Duplan

Corp. v. Deering Milliken, Inc., 444 F.Supp. 648, 683-

684 (D.S.C. 1977); and

D. it permits the Union to use its legal monopoly

over the services of actors to illegally monopolize the

business of rendering agency services to actors. See

Packaged Programs Inc. v. Westinghouse Broadcast

Co., Inc., 255 F.2d 708, 710 (8rd Cir. 1958), and cases

cited therein.

The Courts Below Improperly Interpreted and Ex-

tended This Court’s Decision in Carroll.

In holding that Agents were part of the Union’s labor

group, the courts below relied primarily on this Court’s

decision in Carroll. That reliance was error and improperly

extended the Carroll holding which applied only to booking

agents in the unique club date field to theatrical agents who

operate under vastly different conditions.

The most unusual circumstance in Carroll, which makes

it so different from the subject case, is the fact that the

union in Carroll, the American Federation of Musicians

(“AFM”), did not have a collective bargaining agreement

with the employers of its members in the peculiar club date

field. There were no collective bargaining agreements be-

cause of the unique nature of the diverse employers who

employed club date musicians sporadically, sometimes only

once in a lifetime and generally for non-business purposes,

€.g., the father of the bride. This is a rare situation since

the primary purpose of unions is to negotiate collective

vargaining agreements with the employers of its members,

setting forth the minimum wage scales and working condi-

tions of the Union’s members. This should be contrasted

with the case at bar where the employers (theatrical pro-

ducers) have formed associations for the sole purpose of

negotiating collective bargaining agreements with Equity.

Thus, unlike AFM, Equity has collective bargaining agree-

ments with all producers who employ its members.

The uniqueness and peculiar facts of Carroll have not

escaped the attention of commentators’ or the courts. In

Home Box Office, Inc. v. Director’s Guild of America, Inc.,

83 F.R.D. 423, 425 (S.D.N.Y. 1979), the court, commenting

upon defendants’ reliance upon Carroll, noted:

“But American Federation of Musicians v. Carroll, 391

U.S. 99 (1968), cannot confidently be read so broadly,

given its special circumstances, especially the fact

that the orchestra leaders there actually played as

musicians with their dance bands, Furthermore, this

Court, at least, lacks the confidence to apply a decision

as unique and difficult as Carroll without the benefit

of a full record, as Judge Levet insisted on having in

Carroll itself.”

In his dissent in Carroll, Justice White referred to “the

peculiar role of bandleaders and the peculiar economics of

the club-date music industry.” 391 U.S. at 114.

At best, Carroll dealt only tangentially with the issue of

union regulation of agents. In Carroll, the four plaintiffs

were orchestra leaders and musicians who were members

of AFM while competing with and hiring union member-

musicians. Two of the four Carroll plaintiffs were also

2 F.g., Bartosic, The Supreme Court, 1974, Term, 62 Va. L. Rev.

533, 593 n. 270 (1976) ; Case Notes, Labor Law-Antitrust [aability

of Labor Unions, 15 B.C. Ind. Comm, L. Rev. 595, 606 (1974) (“it

has been suggested that the holding in Carroll may be limited to

the special employment conditions of the musie industry’); and

DiCola, Labor Antitrust: Pennington, Jewel Tea and Subsequent

Meandering, 33 U. Pitt. L. Rev. 705, 747 (1972).

agents, but only to the limited extent that they booked jobs

for their own orchestras. Accordingly, the primary issue

and the focus in Carroll was plaintiffs’ activities as or-

chestra leaders and not as booking agents. This is demon-

strated by the Supreme Court’s delineation of the issue in

Carroll:

“The question is whether union practices of the peti-

tioners affecting orchestra leaders violate the Sherman

Act as activities in combination with a ‘non-labor’

group, or are exempted by the Norris-LaGuardia Act

as activities affecting a ‘labor’ group which is a party

to a ‘labor dispute’ ”. 391 U.S. at 101 (italics supplied).

In its opinion below, the Court of Appeals recognized that

“the central holding” in Carroll “was that the fact that

bandleaders sometimes performed as musicians meant that

such [union] restrictions were valid... .” (1980-2 Trade

Reg. Rep. at page 75,907, A3)

Despite the peripheral involvement of unlicensed part-

time agents in Carroll, that decision has been indiscrimi-

nately extended to cases* which involved full time profes-

sional independent agents, a factual situation never con-

sidered in Carroll.

In Carroll, the Supreme Court approved the District

Court’s holding that the orchestra leader plaintiffs were

parties to a “labor dispute” and were a “labor group” be-

cause of the “presence of a job or wage competition or some

other economic interrelationship affecting legitimate union

interests between the union members and the independent

contractors.” 391 U.S. at 106. The holding that there

was an “economic interrelationship” between the members

of AFM and its booking agents and the reasonable relation-

* See e.g., Adams Ray & Rosenberg v. William Morris Agency,

411 F. Supp. 403 (C.D. Ca. 1976) ; and Redfield v. AFM, 603 F.2d

214 (2d Cir. 1979),

13 —

ship between the licensing of agents and AF'M’s “interest

in maintaining observance of union scale wages and work-

ing conditions” was predicated upon the following findings

of facts, none of which are present in the instant case:

1. In Carroll, the AFM did not have a collective bargain-

ing agreement with the employers (e.g., the father of the

bride) who hired its members. Accordingly, if AFM were

to enforce its unilaterally imposed minimum wage scales,

it had to do so through its members and through direct

vertical regulation of the booking agents. Here, where the

Union has entered into collective bargaining agreements

with the employers (producers) who directly pay Union

members, there is no such need or justification.

2. In Carroll, where there was no collective bargaining

agreement between the Union and the employers, this Court

held that AF'M’s fixing the minimum prices which orchestra

leaders could charge was justified by a specific “finding that

the requirement is necessary to assure that scale wages will

be paid to the sidemen and the leader.” 391 U.S. at 112.

“There was evidence that when the leader does not col-

lect from the purchaser of the music [employer] an

amount sufficient to make up the total of his out-of-

pocket expenses, including the sum of his wage-scale

wages and the scale wages of the sidemen, he will, in

fact, not pay the sidemen the prescribed scale.” Id.

at 111.

In stark contrast, the courts below could not, and indeed

did not, find that Union members were not paid scale wages

or were in danger of not being paid scale wages. There was

undisputed evidence that:

A. producers must pay scale wages to Union mem-

bers pursuant to collective bargaining agreements be-

tween the Union and producers ;

B. producers must post a* bond guaranteeing the

payment of scale wages to Union members; and

C. unlike Carroll, where the employers paid the

booking agents who in turn paid the union members,

here the producers pay the actors directly. Despite

Union allegations that actors needed protection from

their agents, there is no evidence that any Union mem-

ber who used an agent was ever paid less than scale

or mimimum.

In view of the above, the District Court’s holding that the

“franchising of agents . . . operate[s] to protect wage

scales” (478 F.Supp. at 504, B9) is without substantiation

and is clearly erroneous.

3. In Carroll, there was a specific finding:

“that the booking agent regulations were adopted be-

cause of experience that [A] many booking agents

charged exorbitant fees to members and [B] booked

engagements for musicians at wages which were below

union scale.’” Jd. at 113.

Again for the reasons noted in “2”, supra, the court below

did not find that the petitioners or other agents “booked

engagements for” Union members “at wages which were

below union scale”. Similarly, the court below did not find

that “many” theatrical “agents (or even one) charged

exorbitant fees to” Union members, because there is no

evidence that:

A. any petitioner or any other agent charged an

exorbitant commission‘ to any Union member or any-

one else; or

‘Since the booking agents were allowed to charge 15% com-

missions in Carroll (241 F. Supp. at 881), by using the term “ex-

orbitant” the Court was obviously referring to commissions in

excess of 15%,

B. any Agent charged a Union member a commis-

sion in excess of the 10% commission permitted by

Article 11 of the General Business Law.

Because of the above, the Court of Appeals holding that

the regulation of theatrical agents is justified by the “pos-

sibility that job-hungry actors will work through agents

who take excessive commissions” (1980-2 Trade Reg. Rep.

at page 75,908, A4) (emphasis supplied), can only be char-

acterized as speculative and therefore is clearly erroneous.

4. In Carroll, the booking agents were not licensed nor

were their commissions or any other facet of their business

regulated by any government agency. Therefore, the ver-

tical licensing of unregulated agents upheld in Carroll re-

flected a proper balance between the conflicting interests of

federal labor and antitrust policies. Here, where theatrical

agents are already regulated, a franchising system such as

Equity’s does not protect or further any legitimate union

interest and contravenes established antitrust policy.

Il.

Carroll, as Applied to Agents, Should Be Overruled.

If this Court finds that the courts below have properly

extended the Carroll holding in the unique club date field to

theatrical agents, thereby seriously upsetting the judicial

balance between conflicting antitrust and labor policies,

then Carroll should be overruled as it applies to agents to

restore this balance. The following quotations from Justice

White’s dissent in Carroll are particularly appropriate to-

day in view of the decisions below:

“In my view the Court is misled by the peculiar role of

bandleaders and the peculiar economies of the club date

music industry, and fashions a rule which, if compre-

hensible at all, has unfortunate consequences for the

delicate and difficult area of conflict between antitrust

and labor policy.” (391 U.S. at 114).

“It may be that the Court views this industry as having

special problems of-supply and demand requiring spe-

cial treatment under the antitrust laws. If this is the

case, the Court should frankly say so and seek to con-

fine the misguided rules of law it announces.” (391 U.S.

at 121).

ill.

The Courts Below Improperly Extended Carroll to

Permit Unions to Require Agents to Work For Nothing.

If this Court were to affirm that portion of the opinions

below which justify the “regulation of the fees of agents”

on the ground that “the union cannot eliminate wage com-

petition among its members without” such regulation

(1980-2 Trade Reg. Rep. at page 75,907, A3), it should

nevertheless grant certiorari for the purpose of holding

that the regulation of maximum fees does not permit unions

to require agents to render their services to union members

for nothing on scale or minimum or any other jobs.5 No

citation is required for the proposition that the power to

tax is the power to destroy. Agents are forced to work for

nothing when they obtain a scale job for a client even

though they sought a higher wage for the client in negotia-

tions with the producer. In view of agents’ self-interest in

obtaining the highest possible wages for actor-clients, there

can be no justification for the Union’s prohibition of com-

®In some circumstances scale or minimum wage may be as high

as $600 per week.

missions on scale jobs. Moreover, agents’ commissions are

regulated by Article 11 of the General Business Law and

there is no evidence that agents collect commissions which

violate Article 11. Accordingly, no justification has been

shown to substitute the Union’s desire to impose onerous

and self-serving restrictions on agents’ commissions for

the wisdom of the New York State Legislature in permit-

ting theatrical agents to charge a ten percent commission

under Article 11 of the General, Business Law.

If the courts below are upheld, the Union might, and

could lawfully the day after this Court’s decision, require

agents to work for no commission on jobs which pay $1000

a week or more. Where, as here, agents are forced to work

for nothing, the Union is not protecting its members from

agents but instead is requiring agents to subsidize Union

members.

IV.

The Courts Below Improperly Extended Carroll to

Permit Unions to Extract Franchise Fees From Com-

pulsorily Franchised Agents For the Privilege of Being

Regulated and Dominated by the Union.

Not content with regulating the commissions that agents

charge Union members and with regulating the manner in

which agents may operate their business, the Union re-

quires agents to pay franchise fees for the privilege of

being regulated, dominated and required to work for

nothing. No court, not even Carroll, prior to the decisions

of the court below, has ever held that a union may extract

franchise fees from independent agents who represent

union members. In Carroll, the union did not extract fran-

chise fees from the agents it regulated. 241 F.Supp. at 881.

The Court of Appeals, while recognizing that franchise

fees is a “troublesome” area, appears to have assumed with-

out explanation that the Union may impose upon agents

the “union’s expenses in administering the franchising sys-

(1980-2 Trade Reg. Rep. at page 75,907, A3), it should

tem” it forces upon unwilling agents. 1980-2 Trade Reg.

Rep. at 75,908, A4.

The Union’s requirement that agents must pay a fran-

chise fee in order to represent actor-members of the Union

on the Union’s terms and conditions does not constitute

protection of wage scales—but again amounts to the agents’

forced subsidization of Union members. The more fran-

chise fees extracted from agents, the less dues Union

members must pay to Equity. If Equity (like the AFM

in Carroll) did not charge any franchise fees, the wage

scales Equity negotiates with producers for the benefits

of Equity’s members would remain unchanged. Accord-

ingly, there is no basis for Judge Motley’s “opinion that

the franchise fees are reasonably related to the operation

of the franchise system and the system’s protection of

wage scales and working conditions.” 478 F.Supp. at 504,

BY.

CONCLUSION

If the decisions below are allowed to stand, agents will be

permanent members of unions’ “labor group” and thus

subject to union domination and regulation without the

protection of the antitrust laws or the benefits of union

membership and will be compelled to pay a franchise fee

to remain in this unfortunate condition.

Dated: New York, New York

August 19, 1980

Respectfully submitted,

Cartes DoneLan, Ese.

311 Main Street

Worcester, ss. 01608

(617) 791-35) |

Howarp Brern.21, Ese.

530 Fifth Avenue

New York, New York 10036

(212) 221-3760

Of Counscl:

Bowpitcx & Dewey

Souin & Bresvet, P.C.

APPENDIX

APPENDIX A

DECISION OF SECOND CIRCUIT AFFIRMING DISRICT COURT'S

DECISION TO DISMISS THE COMPLAINT.

Cited 1980-2 Trade Cases

H. A. Artists & Associates, Inc. v. Actors Equity Assn.

[163,376] H. A. Artists & Associates, Inc., et al. v. Actors Equity Association and

Donald Grody.

73,905

U. S. Court of Appeals, Second Circuit. Docket No. 79-7821. No. 875, September

Term, 1979. Decided May 23, 1980. Appeal from dismissal of a complaint by theatrical

agents against actors’ union, alleging antitrust violations. 478 F. Supp. 496 (S. D. N. Y.

1979) (Motley, J.), affirmed.

Sherman Act

Labor Unions—Antitrust Immunity—System of Franchising Theatrical A

bination with Non-Labor An actors union’s system of franchising theatrical

agents whereby agents paid a fee and agreed to abide by restrictions in return for cer-

tification as franchised agents was immune from antitrust scrutiny under the statutory

labor law exemption. Collective bargaining agreements did pot reveal any combination

between the union and theatrical producers, a “non-labor group”, that would divest the

union’s franchise system of the protection of the statutory exemption. Unilateral state-

ments made by the union that only franchised agents may negotiate employment for

performers were not proof of an agreement because they only meant that union members

were forbidden from dealing with unfranchised agents; there was no indication that

producers agreed to cooperate or that they accepted the union's view. Any combination

between the union and agents who agreed to hecome franchised did not have any effect

as to the exemption because those agents were a “labor group”. Moreover, the goal

pursued by the franchising system through agent restrictions—mainly a non-charge of

commission on scale wage contracts—was the protection of a minimum wage in the

industry which was within the area of the union's legitimate self-interest. See {| $415, 5435.

For plaintiffs-appellants: Howard Breindel, Worcester, Mass. (Bowditch & Dewey,

Worcester, Mass. Solin & Breindel, New York, N. Y., of counsel). For defendants-

appellees: Nan Bases, New York, N. Y. (Cohn, Glickstein, Lurie, Ostrin, Lubell &

Lubell, New York, N. Y., of counsel). For amicus curiae:’ Shea & Gould, New York,

N. Y., for Sereen Actors Guild, Inc.; Mortimer Becker, New York, N. Y. (Van Arkel,

Kaiser, Gressman, Rosenberg and Driesen, Washington, D. C., of counsel), for American

Federation of Television and Radio Artists.

Before: Lumaaap, MAnsrigto, Circuit Judges and BAgrets, District Judge.*

[Opinion]

Lumsaro, Cir. J.: Appellants, theatrical

agents who act as intermediaries between

actors and producers, appeal from a judg-

ment of the District Court for the Southern

District of New York, 478 F. Supp. 496

(1979) (Motley, J.), holding certain prac-

tiees of defendant union Actors Equity

(“Equity”) immune from challenge under

the antitrust laws because protected by the

“statutory labor exemption.” We affirm.

[System of Franchising Theatrical Agents)

At issue in this case is Equity’s system

of “franchising” theatrical agents. Agents

pay a fee and agree to abide by certain

restrictions in return for certification as

“franchised” agents. Equity encourages

agents to become franchised by forbidding

its members to deal with unfranchised

agents. Equity members who negotiate con-

tracts using the services of unfranchised

agents are subject to union discipline, in-

cluding fines..

[Agent Restrigtions}

The most important of the restrictions

placed upon franchised agents is the re-

quirement that they renounce any right to

take commissions on contracts under which

an actor receives scale wages. Scale wages

are set by a collective bargaining agreement

between Equity and theatrical producers,

to which the agents are not parties. To

the extent that a contract includes pro-

visions under which an actor will some-

times receive scale pay (as for rehearsal

periods and “chorus” employment) and

sometimes more, the franchise regulations

deny the agent any commission on the

scale portions of the contract. Franchised

agents are also precluded from taking com-

missions on certain expense money paid

to union members; commissions are limited

ou wages within 10% of scale pay; and

* Hon. John R. Bartels, United States District

Judge for the Eastern District of New York,

1 63,376

75,906

Court Decisions

442 616-60

H. A. Artists & Associates, Inc. v. Actors Equity Assn.

agents must allow actors to terminate a

representation contract if the agent is un-

successful in procuring employment for the

actor within a specified period of time.

Some theatrical agents find this system

acceptable, and this group—which has

formed a trade association called TARA—

is not a party in this litigation.

The district court did not reach the ques-

tion of whether or not the franchise system

is an unreasonable restraint of trade, or

constitutes per se illegal price-fixing, be-

cause it found that the union’s actions in

creating and maintaining the franchise sys-

tem were fully protected by the “statutory”

labor exemption from the antitrust laws,

which removes from antitrust scrutiny uni-

lateral action by: a labor union pursuing

the interests of its member. The “statu-

tory” exemption has its source in judicial

readings of sections 6 and 20 of the Clay-

ton Act, 15 U. S. C. §§ 17, 29, and of the

Norris-LaGuardia Act, 29 U. S. C. §§ 105-

115. Under the leading “statutory” labor

exemption case of United States v. Huiche-

som [1940-1943 Trave Cases 956,091], 312

U. S. 219 (1941), the threshold issue is

whether or not Equity’s franchising of

agents has involved any combination be-

tween Equity and any “non-labor groups”

or persons who are not “parties to a labor

dispute.” /d. at 232. If it has, the protection

of the exemption does not apply.'

[Combination with Non-Labor Group]

Most employers qualify as a “non-labor

group,”* and the court below considered

whether or not there was any agreement,

either explicit or tacit, between Equity and

the producers to establish or police the

franchise system. We do not believe the

district court was clearly erroneous in find-

ing that the collective bargaining agreement

does al any combination between

Equity and the producers with respect to

agents, Fed. R. Civ. P. 52(a), Meat Cutters

v. Jewel Tea Co. (1965 Trave Cases

171,463), 381 U. S. 676, 694 (1965). .

space for the actor's agent’s name, and

another provision of the agreement that

requires this line to be filled in, is evidence

that the producers agree with Equity to

help the union police its franchise system.

We disagree. As the district court found,

there was evidence that contracts were

often executed leaving blank the line left

for the agent’s nares, and that, even so,

Equity honored such contracts and did not

take any action against members who

worked under such contracts. The provision

requiring that every line be filled in far

antedated the appearance of the line for

“name of agent.” The district court was

not clearly erroneous in concluding that

Equity did not in fact require that this

line be filled in,

The collective bargaining agreement aside,

appellants argue that various statements

made by Equity officials to union members

and to producers are evidence of a com-

bination between Equity and the producers

with regard to agent franchising. We have

examined each of the statements in the

record adduced to support this point and

we conclude that the district court's finding

that they do not demonstrate any such

combination cannot be labeled clearly er-

roneous. Unilateral pronouncements by

Equity such as that “only franchised agents

may negotiate employment deals for Equity

performers” are not proof of an agreement

because they may mean no more than that

Equity members are forbidden from dealing

with unfranchised agents. Such a prohibi-

tion, of course, since it serves the union's

self-interest in a matter of proper union

concern and does not involve a non-labor

group, is safe from antitrust scrutiny under

the statutory exemption, United States v.

Hutcheson, supra.

There is some evidence in the record that

Equity sought the producers’ cooperation

in enforcing the franchise system during

the 1975 negotiations between Equity,

TARA and the producers. And Equity offi-

cials did tell their membership that pro-

ducers had an “obligation” to avoid using

unfranchised agents. But such unilateral

expressions, in the absence of any indication

from the producers that they had agreed

to cooperate or that they had accepted

Equity's view of their “obligations,” is not

‘If a court finds that there has been an agree-

ment between a union and a ‘“‘non-labor group’,

the agreement may still be entitied to antitrust

immunity under the ‘‘non-statutory” exemption.

Connell Construction Co. v. Plumbers Local 10¢

jews TRADE CASES 1 60,341), 421 U. S. 616,

(1975). Since both the ‘statutory’ and

; are based on ju-

Clayton and

Cited 1980-2 Trade Cases

75,907

H. A. Artists & Associates, Inc. v. Actors Equity Assn.

evidence from which the court was required

to find that a “combination” had been

formed. Our conclusion is also based on

the fact that there was no eviclence at trial

that any producer had considered himself

bound by the union's statements; nor did

any producer testify that he had been pres-

sured not to deal with unfranchised agents,

or that he had reported unfranchised agents

to the union.

[Franchised Agents as Labor Group}

But on the record in this case we discern

a combination between the union and indi-

viduals who appear as if they might be

members of a “non-labor” group.

individuals are those agents who have

agreed with the union to become franchised,

and these agreements must be scrutinized

to determine if they are agreements that

would divest Equity's franchise system of

the protection of the “statutory” exemption.

In our view, they do not because the agents

involved are a “labor group.”

In American Federation of Musicians v.

Carroll [1968 Trace Cases $72,456], 391

U. S. 99 (1967), the Supreme Court identi-

fied the test for distinguishing a labor

group from a non-labor group as “.. . the

presence of job or wage competition or

some other economic inter-relationship af-

fecting legitimate union interests between

the union members and the independent

contractors. If such a relationship existed,

the independent contractors were a ‘labor

a 4 ..." LU. S. at 106, quoting (1965

rave Cases 71,546], 241 F. Supp. at

887. The above language is taken from the

Carroll court’s discussion of whether or not

bandleaders in the “club date” field could

be subjected to certain forms of union re-

strictions. Since the central holding in the

case was that the fact that hatdleaders

sometimes performed as musicians meant

that such restrictions were valid, most of

the opinion deals with the “job or wage

competition” branch of the disjunctive test

quoted above. But the Carroll court also

approved the musicians’ union's restrictions

on booking agents’ commissions, which

were enforced through a “licensing” system

analogous to the “franchising” system at

issue in the case at bar. 391 U. S. at 116-17.

Unlike the bandleaders, the agents in

Carroll were not in any kind of “job or

wage competition” with union members.

The court’s sub silentio application of the

statutory exemption therefore supports the

view that the musicians and the booking

agents were in a sufficient “economic in-

Trade Regulation Reports

terrelationship” to justify union regulation.

Because of the vagueness of this term,

however, we believe the matter calls jor

further explanation.

Most unions are in an “economic inter-

relationship” with the employers of their

membership. When the union gains a wage

increase, the employers give up corres-

ponding amounts of money (though not

necessarily corresponding profits, because

labor costs can often be passed along to

consumers). But such an “economic in-

terrelationship” does not suffice to make

an employer a “labor group”, or even a

“party to aclabor dispute”; otherwise there

would be no need for the “non-statutory”

exemption, which was developed largely to

provide an exemption for union agreements

with employers. Connell Construction Co.

tv. Plumbers Local 100 [1975-1 Traore Cases

760,341], 421 U. S 616, 622 (1975). To

choose a different example, there is an

“economic interrelationship” between a labor

union and the buyers of goods produced by

the union members’ employer. If, for ex-

ample, steclworkers were to win a wage

raise of enormous size, various users of

steel products, such as automobile manu-

facturers, would be adversely affected. Yet

a combination between the steelworkers

and an automobile manufacturer would not

be entitled to the benefit of the statutory

exemption because of this “economic in-

terrelationship.”

For purposes of this case, it is enough

to note that the “economic interrelation-

ship” test has never been used to im-

munize from antitrust challenge anything

more than a union's effort to regulate

partics, who, because of industry structure,

stand athwWart the current of wages paid

by employers to union members; and that

these efforts have been associated with

attempts to defend the integrity of minin: um

wages. See, ¢.g., Adams, Ray & Rosenberg

tv. William Morris Agency, 411 F. Supp. 403

(c. D. Cal. 1976). In industries where

it is necessary or customary for union

members io secure employment through

agents, and agents’ fees are calculated as

a percentage of wages set by a collective

bargaining agreement, such agents must

be considered a “labor group” because the

union cannot eliminate wage competition

among its members without regulation of

the fees of the agents.

: [Legitimate Labor Goal]

Once it is determined that the union's

actions have involved no combination with

q 63,376

75,908

Court Decisions

“42 616-40

Ventura v. Ford Motor Corp.

a mon-labor sroup, it remains, under United

States v. Hutcheson, supra, only to decide

if the goal being pursued in within the

area of the union's legitimate self-interest.

In the case at bar, Equity, through its

franchising system, seeks primarily to pro-

tect from encroachment a minimum wage

in an industry where the maintenance of

a minimum wage poses problems of par-

ticular intractability. The possibility that

job-hungry actors will work through agents

who take excessive commissions is a matter

of legitimate union concern. The goal of

the agent restrictions is the elimination of

wage competition, traditionally one of the

most sacrosanct goals of national labor

policy. ;

To this point, we have been concerned

with the core of Equity's franchising system

—the securing by the union of an agree-

ment from the agents not to charge com-

missions on certain types of work obtained.

A second aspect of the franchising system,

under which the union charges a fee to

agents who become franchised, is more

troublesome. These fees ($200 for the initial

franchise; $60 per year thereafter for each

agent, and $40 for any sub-agent working

in the office of another), are not segregated

from other union funds. While the union

argues that they are necessary to pay the

union’s expenses in administering the fran-

chise system, no evidence was presented at

trial to show that the union’s costs justified

the franchise fees.

Clearly the union could not, legally, exact

more from the agents than it needs to

offset the costs of:the franchising system.

Such exactions would be unconnected with

any of the goals of national labor policy

which justify the antitrust exemption for

labor. Nevertheless, this case in its present

posture can best be disposed of by ap-

proving the fees as they stand today. There

was testimony that at Jeast one full-time

Equity employee was engaged in updating

lists of franchised agents and correlating

contracts with these lists. There was also

testimony that approximately 200 theatrical

agents or agencies are affected by the union

practices under challenge. Assuming an

average yearly charge of $60, Equity’s fran-

chising revenues would amount to approxi-

mately $12,000. Such a sum, plus initial

franchise fees collected during the year,

cannot be incommensurate with Equity’s

expenses in maintaining a full-time em-

ployee to administer the system. In such

circumstances, a remand to the district

court would not serve any useful purpose.

Affirmed.

APPENDIX B

DISTRICT COURT OPINION DISMISSING THE COMPLAINT

HL A. ARTISTS & ASSOCIATES, INC, 3.

T. E. Representation, Ltd, Don Buch-

wald & Associates, Inc. Marje Fields,

Inc.. Henderson/Hogan Agency, Inc.

Joel Pitt, Ltd, Talent Representatives,

Inc. D. M. L Talent Associates, Ltd,

Jean Thomas Agency, Inc. Bob Waters,

Inc., William D. Cunningham & Associ-

ates, Inc., Tatrum, Robertson & Hughes,

"Inc, Monty Silver Agency, Inc., Lester

Lewis Associates, Inc., Leaverton Asso-

ciates, Ltd., Joe Jordan Talent Agency,

Inc., Raglyn-Shamsky, Ltd., Ann Wright

Representatives, Inc., Plaintiffs,

ACTORS’ EQUITY ASSOCIATION, an’

unincorporated association and

Donald Grody, Defendants.

No. 78 Civ. 2452.

United States District Court,

S. D. New York.

Oct. 24, 1979.

Employment agencies operating as the-

atrical agents brought suit against a labor

organization representing actors working in

the legitimate theater, conténding that the

2. This is not the situation which the Supreme

Court addressed in Owen Equipment & Erec-

tion Co. v. Kroger, 437 U.S. 365, 98 S.Ct. 2396,

57 L.Ed2d 274 (1978), and that case is there

fore inapposite.

H. A. ARTISTS, ETC. v. ACTORS’ EQUITY ASS'N

497

Cite as 478 F Sapp. 406 (1979)

labor organization's franchising system and’

collective bargaining agreements violated

the Sherman Anti-Trust Act. The District

Court, Motley, J., held that the conduct in

question was protected under a statutory

exemption to the antitrust laws applying to

union activities.

Complaint dismissed.

Monopolies @= 12(8)

Where, in adopting franchising system

and collective bargaining agreements, labor

‘organization representing actors working in

‘egitimate theater acted in its own self-in-

terest concerning matters intimately bound

‘with wage scales and working conditions,

and acted without conspiring or combining

with any nonlabor group, such activities

were protected by statutory exemption

antitrust laws for union activities.

Sherman Anti-Trust Act; §§ 1, 2, 15 U.S.

GA. §§ 1, 2; Clayton Act, § 6, 15 U.S.C.A.

$17; § 2, 29 USCA. § 52; Norris-La-

‘Guardia Act, §§ 1-15, 29 U.S.C.A. §§ 101-

115; General Business Law N.Y. § 170 et

seq.

- Solin & Breindel* by Howard Breindel,

Frederick Gold, New York City and Bow-

ditch & Dewey by Charles Donelan, Worces-

ter, Mass., for plaintiffs.

Cohn, Glickstein, Lurie, Ostrin & Lubell

by Nan C. Bases, Mary K. O'Melveny, New

York City, for defendants.

FINDINGS OF FACT

MOTLEY, District Judge.

. Defendant Actors’: Equity Association

('Actors’ Equity”) is a labor organization

‘fepresenting actors working in the legiti-

jMate theatre. Defendant Donald Grody

‘(Grody”), as Executive Secretary, is the

‘ehief executive officer of Actors’ Equity.

The plaintiffs are employment agencies lo-

‘ated in New York City who operate as

theatrical agents. ~

‘hActors’ Equity has collective bargain

‘agreements with most major theatrical pro-

@ecers in New York and elsewhere, with

most off-Broadway producers, and with

many other theatrical producers throughout

the United States. The terms negotiated

with various producer groups are the mini-

mum terms and conditions of employment.

An actor is free to negotiate salary or terms

more favorable than those prescribed in the

collective bargaining agreement, but nei-

ther the actor nor the producer is permitted

to diminish the wages set forth in the rele-

vant collective bargaining agreement.

Theatrical agents are independent. con-

tractors ‘in the business of placing their

actor clients in jobs with producers. Theat-

rical agents receive commissions, based on a

percentage of earnings of the client, only-if

they succeed in obtaining employment for

their clients.

Theatrical agents who operate in New

York City are required to be ‘licensed as

employment agencies and are regulaved by

the Department of Consumer Affairs of

New York City pursuant to drcicle 11 of the

General Business Law of the State of New

York, which sets the maximum commissions

employment agencies may charge and has

specific provisions dealing with theatrical

agents.

As a matter of general industry practice,

producers seek actors and actresses for

their productions through agents. Testimo-

ny in this case convincingly established that

an actor without an agent does not have the

same access to producers or the same oppor-

tunity to be seriously considered for a part

as does an‘actor who has an agent. Even

principal interviews, in which producers are

required to interview all actors who want to

be considered for principal roles, do not

eliminate che need for an agent, who may

have a greater chance of gaining an audi-

tion for his client.

Under Actors’ Equity agency regulation

system, agents are reqyifed to secure licens-

es, also known as permits or franchises,

from Actors’ Equity in order to represent

Actors’ Equity members. Licensed agents

must abide by a schedule of maximum com-

missions established by Actors’ Equity and

eel,

498

tect Actors’ Equity members. Actors’ Eq-

uity members are forbidden from dealing

through agents who are not licensed by

Actors’ Equity, and members are subject to

discipline for dealing with nonfranchised

agents. ,

Theatrical Artists Representatives Asso-

ciation (“TARA”) is a trade association of

agents working in the legitimate theatre

field. Discussions between Actors’ Equity

‘and TARA have resulted in several reyi-

sions in Actors’ Equity regulations over the

years. While holding an Actors’ Equity

franchise is a condition of membership in

TARA, membership in TARA is not a condi-

tion to obtaining an Actors’ Equity fran-

chise.

Discussions between Actors’ Equity and

TARA in the 1950’s resulted in the promul-

gation by Actors’ Equity of “Rule A,”

which governed relations between Actors’

Equity members and theatrical agents be-

tween 1958 and 1977. Rule A prescribed

the minimum terms of contracts between

‘actors and agents, including the maximum

commissions which could be charged, the

maximum duration for exclusive contracts,

and the conditions warranting release from

an exclusive contract. Rule A also estab-

lished procedures for the granting of fran-

chises, the disgipline of agents, and the arbi-

tration of disputes under the agency regula-

tions.

The current Actors’ Equity agency regu-

lations also resulted from discussions be-

tween Actors’ Equity and TARA. The

course of these discussions and related

events follows.

Discussions between Actors’ Equity and

representatives of TARA commenced in or

about 1975. In the course of the discus-

sions, TARA gave six months notice to “ter-

minate” Rule A; this termination date was

extended several times by mutual consent.

A major subject of the discussions ‘was,

Rule A's provision prohibiting agents from

charging commissions on jobs paying the

minimum scale salary provided for in- the

collective bargaining agreements between

Actors’ Equity and the producers. In addi-

tion, Rule A prohibited commissions on re-

478 FEDERAL SUPPLEMENT :

hearsal pay, on pay for out of town ex-

penses, and on “chorus” jobs. TARA de-

manded “10% from the first dollar,” that is,

a 10% commission on all monies received by

the actor, regardless of whether the actor’s

salary exceeded the minimum scale. When

Actors’ Equity submitted to TARA a pro-

posal that, while increasing commissions,

did not meet this demand, TARA rejected

the proposal and officially terminated Rule

A on January 6, 1977. Agents who “re-

signed” their franchises pursuant, to

TARA’s termination ‘of Rule A were not

permitted to represent Actors’ Equity mem-

bers except under pre-existing agency con-

tracts. Rule A-remained in effect for those

agents who agreed to abide by it—these

agents were permitted to represent Actors’

Equity members for all purposes.

As negotiations contihued, Actors’ Equity

drafted a revised commission schedule and

“new agency regulations, known as the “Eq-

uity Agency Regulations.” These regula-

tions provided that an agent could charge a

10% commission, so long as that commission

did not invade the negotiated minimum,

that an agent could charge a commissjon on

off-Broadway contracts, and that expense

money negotiated by Actors’ Equity was

not commissionable.

In May, 1977, seven agents, including five

who are plaintiffs herein, filed a lawsuit in

the United States District Court for the

Southern District of New York, challenging

Actors’ Equity’s franchising system under

the antitrust laws (Hidden v. Actors’ Equity

Absociation, T7 Civ. 2624 (JMC)). The law:

suit was initiated and financed by TARA.

The lawsuit was withdrawn without prej-

udice in August, 1977, and in or about Octo-

ber, 1977, TARA and Actors’ Equity,

reached agreement on the new Equity

Agency Regulations. Most agents then re:

sumed their franchises and began comply:

ing with the current Equity Agency Regu-

lations. The new Equity Agency Regula-

tions prohibit commissions on minimum

scale jobs, chorus jobs, rehearsal pay, and

out-of-town expense money. B3

H. A. ARTISTS, ETC. v. ACTORS’ EQUITY ASS'N

499

Cite as 478 F.Supp. 496 (1979)

On or about August 31, 1977, a group of

agents, incyiding the plaintiffs, informed

Actors’ Fauity that they had resigned from

TARA and that they wished to be repre-

sented by the Nutional Association of Tal-

ent Representatives, Inc. (NATR), a trade

association whose members were: talent

agents representing actors. Most of the

plaintiffs have not been franchised by Ac-

tors’ Equity since January, 1977. Actors’

Equity has invited plaintiffs to become re-

franchised, but plaintiffs have decided to

remain unfranchised.

In order to enforce its rule that members

deal only through franchised agents, Ac-

tors’ Equity has advised members that they

could be disciplined for dealing with non-

franchised agents. It was Actors’ Equity’s

practice to send a letter to an actor dealing

with a nonfranchised agent, warning the

actor that he could be disciplined—a copy of

the letter was also sent to the nonfran-

chised agent. In 1979, Actors’ Equity be-

gan disciplinary proceedings against mem-

bers who were dealing with nonfranchised

agents—members who would not agree to

‘cease dealing with nonfranchised agents

were fined after hearings.

The court finds, however, that Actors’

Equity has not required producers to re-

frain from dealing with nonfranchised

agents. While Actors’ Equity requested

producers not to deal with nonfranchised

agen's and notified producers that Actors’

Equity members could be disciplined for

dealing with nonfranchised agents, Actors’

Equity never imposed or threatened to im-

pose any sanctions on producers for dealing

with nonfranchised agents. In June, 1978,

Actors’ Equity amended the language of

‘Rule 2(A) in collective bargaining agree-

ments between Actors’ Equity and produc-

ers; the amendment clarified that actora

were the only persons subject to any sanc-

tons for dealing with nonfranchised agents.

Actors’ Equity provides standard form

individual employment contracts, which the

actor and producer must sign when the

actor becomes employed by a producer.

These individual employment contracts pro-

wide blanks for identifying the parties to

the contract (including the agent), the pro-

duction, and essential terms such as the

salary, the starting date, and the role to be

played. In particular, in 1975 TARA re-

quested Actors’ Equity to add a line for

identification of the agent into the standard

form employment contract used under the

“Production Contract” and used in Broad-

way shows. In 1977, Actors’ Equity did

print new standard form employment con-

tracts containing a line for identification of

the agent.

This court, finds that producers were not,

in fact, required to fill in the agent identifi-

cation line on any of the stgndard form

contracts. Producers could leave the

agent’s line blank, incurring no penalties or

further inquiry from Actors’ Equity. Even

where Actors’ Equity has had knowledge

that a producer has failed to identify an

agent on the standard form employment

contract, the evidence does not show that

Actors’ Equity has taken action against the

producer. In fact, producers ‘have fre-

quently not identified nonfranchised agents

on the contract, at the. request of the

agents. ,

In short, this court finds no evidence to

suggest the existence of any conspiracy or

illegal combination between Actors’ Equity

and TARA or between Actors’ Equity and

producers. The Actors’ Equity franchising

system was employed by Actors’ Equity for

the purpose of protecting the wages and

working conditions of its members.

CONCLUSIONS OF LAW

Plaintiffs in this case allege that defend-

ant Actors’ Equity Association’s (“Actors’

Equity”) franchising system and collective

bargaining agreements violate Sections 1

and 2 of the Sherman Act, 15 U.S.C. §§ 1 et

seq. Defendants have raised the affirma-

tive defense that defendants’ conduct is

protected under the statutory and nonstatu-

tory exemptions to the antitrust laws. For

the reasons stated below, this court con-

cludes that defendants’ conduct is protected

under the statutory exemption to the anti-

trust laws, and accordingly, finds for de-

fendants in this case. B4

500

Under Sections 6 and 20 of the Clayton

Act, 15 U.S.C. § 17, 29 U.S.C. § 52, and

under the Norris-LaGuardia Act, 29 U.S.C.

§§ 101-115, labor unions are not combina-

tions or conspiracies in restraint of trade;

these statutes exempt specific union activi-

ties, including secondary picketing and boy-

cotts, from operation of the antitrust laws.

Connell Construction Co. v. Plumbers &

Steamfitters Local Union No. 100, 421 U.S.

616, 621-22, 95 S.Ct. 1830, 44 L.Ed.2d 418

(1975). Under this statutory exemption

from antitrust laws, the Supreme Court

held in United States v. Hutcheson, 312

U.S. 219, 232, 61 S.Ct. 463, 466, 85 L.Ed. 788

(1941) [footnote omitted], that the activities

of a labor organization come within the

exemption “(s]o long as a union acts in its

self-interest and does not combine with

non-labor groups.”

In addition, the Supreme Court has fash-

ioned a nonstatutory labor exemption from

antitrust laws:

The Court has recognized that

&@ proper accommodation between the

congressional policy favoring collective

bargaining under The NLRA and the con-

gressioral policy favoring free competi-

tion in business markets requires that

some union-employer agreements be ac-

corded a limited nonstatutory exemption

from antitrust sanctions.

The nonstatutory exemption hes its

source in the strong labor policy favoring

the association of employees to eliminate

competition over wages and working con-

ditions. Union success in organizing

workers and standardizing wages ulti-

mately will affect price competition

among employers, but the goals of feder-

al labor law never could be achieved if

this effect on business competition were

held a violation of the antitrust laws.

The Court therefore has acknowledged

that labor policy requires tolerance for

‘the lessening of business competition

based on differences in wages and work-

ing conditions.

Connell Construction Co. v. Plumbers &

Steamfitters, supra, 421 U.S. at 622, 95.

S.Ct. at 1835 [citation omitted]. B5

478 FEDERAL SUPPLEMENT

In distinguishing between the statutory

and nonstatutory exemptions, the Supreme

Court has noted that “while the statutory

exemption allows unions to accomplish some

restraints by acting unilaterally, . .

the nonstatutory exemption offers no simi-

lar protection when a union and a nonlabor

party agree to restrain competition in a

business market.” Id. at 622-23, 95 S.Ct. at

1835 [citation omitted).

This court need not decide whether the

nonstatutory exemption is applicable in the

case ut hand, as this court concludes ‘that

rr statutory exemption is directly applica-

ble. In particular, this court concludes that

under the Supreme Court’s decision in

American Federation of Musicians v. Car-

roll, 391 U.S. 99, 88 S.Ct. 1562, 20 L.Ed.2d

460 (1968), the activities of the defehdants

are protected under the statutory exemp-

tion to antitrust laws.

' As noted aboye, the Court in United

States v. Hutchesxn established..a two

pronged test for determining whether a la-

bor organization's activity falls within the

statutory exemption: 1) whether a union

has combined with nonlabor groups, and 2)

whether a union has acted in its self-inter-

est. See United States. v. Hutcheson, supra,

312 U.S. at 232, 61 S.Ct. 463. As interpret-

ed by the Second Circuit, “{t]he test of

whether labor union action is or is not with-

* jn the prohibitions of the Sherman Act ie (1)

whether the action is in the union's self-in-

terest in an area which is a proper subject

of union concern and (2) whether the union

is acting in combination with a group of

employers.” Intercontinental Container

Transport Corp. v. New York Shipping As-

soc., 426 F.2d 884, 887 (2d Cir. 1970); ac

cord, Robertson v. National Basketball As-

soc., 389 F.Supp. 867, 889 (S.D.N.Y.1975),

* In American Federation of Musicians v.

Carroll, supra, the Supreme Court intro-

duced an ‘“€conomic interrelationship” crite-

rion in determining whether a union has

‘combined with nonlabor groups—the first

prong of the Hutcheson test:

The criterion applied by the District

Court in determining that the orchestra

leaders were a “labor” group and. parties

H. A. ARTISTS, ETC. v. ACTORS’ EQUITY ASS'N

501

Cite as 478 F.Supp. 496 (1979)

to a “labor dispute” was the “presence of

a job or wage competition or some other

econumic interreiationship affecting le-

gitimate union interests between the un-

ion members and the independent con-

tractors. If such a relationship existed

the independent contractors were a ‘labor

group’ and party to a labor dispute under

the Norris-LaGuardia Act.” . |.

The Court of Appeals held, and we agree,

that this is a correct statement of the

applicable principles.

391 U.S. at 105-06, 88 S.Ct. at 1567 (citation

omitted). The Supreme Court in Carroll

found that the economic interrelationship

criterion had been satisfied, in light of the

district court’s finding that “the orchestra

leaders performed work and functions

which actually or potentially affected the

hours, wages, job security, and working

conditions of [the union’s}] members.” Id.

at 106, 88 S.Ct. at 1567 [footnote omitted].

The Court in Carroll specifically ad-

dressed the applicability of the “economic

interrelationship” criterion to the union's

regulation of booking agents:

We think also that the caterer and

booking agent.restrictions “are at least as

intimately bound up with the subject of

wages” as the price floors.

The District Court found that the book-

ag agent regulations were adopted be-

cause of experience that “many booking

agents charged exorbitant fees to mem-

‘bers and booked engagements for musi-

cians at wages which were below union

". . Om the basis of these

findings, the District Court concluded:

“Because the activities of the booking

agents here have and had a direct and

substantial effect on the wages of the

members of [the unions], I find that they

are in an economic interrelationship with

the members * * * such that the [un-

ons} are justified in regulating their ac-

livities * * *. Furthermore, I find

the regulations to be reasonably related

to their interest in maintaining observ-

ance of union scale and working condi-

tions.”

Id, at 113, 88 S.Ct. at 1571 [bracketed mate-

Gal in original].

In applying the second prong of the

Hutcheson test, the Court did not specifical-

ly inquire whether the union's activity was

in its own “self-interest.” Instead, the Car-

roll Court appeared to use several inter-

changeable tests to determine whether the

union’s activity actually protected the

wages, hours, or working conditions of un-

ion members. See Adams, Ray & Rosen-

berg v. William Morris Agency, 411 F.Supp.

403, 409-10 (C.D.Cal.1976). Thus, the Court

seemingly applied the following ‘tests:

1) whether “the union has a legitimate

interest” (391 U.S. at"107, 88 S.Ct. at 1568);

2) whether the activities “in actuality op-

erate to protect the wages” (/d. at 108, 88

S.Ct. at 1088);

3) whether the activities “were expressly

designed to and did function as a protection

of * * * wage scales” (Jd. at 108, 88

S.Ct. at 1568);

4) whether the activities “are simply a

means for coping. with the job and wage

competition . . to protect the wage

scales” (Id. at 109, 88 S.Ct. at 1569);

5) whether the activities bear “a close

relation to labor's efforts to improve work-

ing conditions” (Jd.);

6) whether the activities are. “a direct

arid frontal attack upon a problem thought

to threaten the maintenance of the basic

Wage structure” (/d. at 110, 88 S.Ct at

1569);

7) whether the activities are “intimately

bound up with the subject wages” (Jd. at

113, 88 S.Ct. at 1571); and

8) whether the activities are “reasonably

related to their interest in maintaining ob-

servance of union scale wages and working

conditions” (/d.).

Thus, the Couft in Carroll apparently was

satisfied that the union's activities in that

case Were in the union's self-interest. The

Court's analysis in Carrol] was perhaps best

characterized by the district court in Ad-

ams, Ray & Rosenberg v. William Morris

Agency, supra, at 410: BE \

502

It thus appears that the test to deter-

mine if a union's actions are in its “self-

interest” has not been precisely formulat-

ed. But the principle that emerges from

the relevant cases is that a union’s acts

are in its “self-interest,” as that term is

used in Hutcheson, if they bear a reascn-

able relationship to a legitimate union

interest.

This court concludes that, under the stan-

dards set forth in Hutcheson and Carroll,

defendants’ activities clearly fall within the

statutory labor exemption to antitrust laws.

First, it is clear that the defendant Actors’

Equity has not combined with nonlabor

groups, as there is an economic interrela-

tionship between Actors’ Equity and the

agents alleged by plaintiffs to be a “nonla-

bor group.” In light of this economic in-

terrelationship affecting the legitimate un-

ion interests of Actors’ Equity, the agents

"were a “labor group” and party to a “labor

dispute,” thus falling within the statutory

labor exemption ‘to antitrust laws.

. The record in this case leaves little doubt

as to the economic interrelationship be- -

tween the members of Actors’ Equity and

the agents. Testimony confirmed that

agents play an integral role in the industry;

without an agent, an actor would have sig-

nificantly lesser chances of gaining employ-

ment. The evidence clearly supports the

conclusion that agents perform work and

functions which actually or potentially af-

fect the wages, job security, and working

conditions of Actors’ Equity members. As

in Carroil, the agents in this case have a

direct and substantial effect on the wages

of union members. In short, defendants

have convincingly demonstrated an econom-

ic interrelationship between agents and Ac-

tors’ Equity members, and accordingly, the

first prong of the Hutcheson test is satis-

fied.

Defendants have satisfied the second

prong of the Hutcheson test as well. the

regulations imposed by Actors’ Equity upon

its members are without doubt designed to

protect union wage scales. Both franchis-

ing of agents and the restrictions on agents’

commissions operate to protect wage scales;

478 FEDERAL SUPPLEMENT |

as in Carroll, these union activities are “a

direct and frontal attack upon a problem

thought to threaten the maintenance of the

basic wage structure.” In short, this cour:

finds that the activities of Actors’ Equity

bear a reasonable relationship to legitimate

union interests—union scale wages and

working conditions.

Plaintiffs have offered a number of theo-

ries in their attempt to distinguish the case

at hand from Carroll. First, plaintiffs ar

gue that in Carro/l the union members did _

not have a collective bargaining agreement

with employers, such as the “father of the

bride,” while in the case at hand Actors’

Equity has collective bargaining agree-

ments with most of the employers of its

members. This argument is of no avail,

however, as Actors’ Equity has a legitimate

union interest in protecting its members’

wages and working conditions, even beyond

whatever protection is already afforded by

collective bargaining” agreements. More-

over, the Court’s Kélding in Carroll was in

no way limited to those instances where

union members were not employed under

collective bargaining agreements.

Second, plaintiffs argue that in Carroll

the orchestra leaders were in -competition

with union members for jobs, while in the

case at hand agents are not in competition

with members of Actors’ Equity. Plain-

tiffs’ argument seriously misconstrues Car-

roll, unjustifiably limiting its holding to

cases involving competition between union

members and the alleged “nonlabor” group.

In fact, Carroll explicitly applies where

there is the “presence of a job or wage

competition or some other economic inter-

relationship affecting legitimate union in-

terests between the union members and the

independent contractors.” 391 U.S. at 105-

06, 88 S.Ct. at 1567 [emphasis added].

Plaintiffs’ assertion that the term “econom-

ic interrelationship” is to be narrowly con-

strued to cover situations involving actual

competition is without support; the plain‘

meaning of the Court's language in Carroll

is that an economic interrelationship affect .’

ing legitimate union interests between ‘Ac-

tors’ Equity members and their agents will’

.B7

H. A. ARTISTS, ETC. v. ACTORS’ EQUITY ASS'N

503

Cite as 478 F.Supp. 496 (1979)

suffice. This court recently stated in Rob-

ert Redfield, d/b/a The Redfield Agency v.

American Rederation of Musicians of the

United States an! Canada, AFL-CIO, 71

Civ. 3091 (S.D.N.Y. Sept. 18, 1978):

Plaintiff argues that Carroi! does not

apply to professional] booking agents such

as plaintiff, but only to booking agents

who also work as orchestra leaders, as did

the plaintiffs in Carroll. Neither the lan-

guage nor the rationale of Carroil limits

its holding to cases where. the booking

agent is also an orchestra leader.

In short, this court concludes that Carroll's

economic interrelationship criterion is not

limited to cases involving actual competi-

tion.

Third, plaintiffs argue,that in Carroll

booking agents apparently were not li-

censed or regulated by any government

agency, while in the case at hand agents are

licensed by the Department of Consumer

Affairs of New York City and are compre-

hensively regulated pursuant to article 11

of the General Business Law of the State of

New York. Plaintiffs’ argument would

perhaps carry some force, if in fact the New

York licensing and regulation afforded

members of Actors’ Equity the same protec-

tion as the union activities in question.

However, it is clear that Actors’ Equity is

attempting to afford protection beyond that

of New York law, both by protecting mem-

bers who work outside of New York and by

affording protection much more compre-

hensive than that of New York law. The

existence of protection under New York

law should not preclude union attempts to

protect further the interests of union mem-

bers. car

Fourth, plaintiffs argue that in Carroll

the licensing provisions in question were

enacted unilaterally by the union, while in

the case at hand the franchising provisions

were “part of a sweetheart deal to benefit

TARA to the exclusion of other agents” and

“part of a larger. combination and conspir-

acy in violation of the antitrust laws.” As

this court’s findings of fact indicate, plain-

tiff has not successfully demonstrated the

existence of any such sweetheart deal or

conspiracy. Plaintiffs have not demon-

strated that Actors’ Equity’s regulation of

agents was either applied in a discriminato-

ry fashion favoring TARA agents or was

designed to operate to the advantage of

TARA agents. While TARA did request

Actors’ Equity to enforce the rule that Ac-

\ors’ Equity members may not deal with

nonfranchised agents, this could hardly be a

conspiracy against the plaintiffs, as the

plaintiffs were TARA members at the time.

Nor is TARA's agreement to Actors’ Equi-

ty’s increase of franchise fees sufficient evi-

dence of conspiracy.

In cases where a plaintiff alleges a con-

spiracy in violation of the Sherman Act

against a union, the plaintiff must meet the

“clear proof” standard of proof. Ramsey v.

United Mine Workers of America, 416 F.2d

655, 661-63 (6th Cir. 1969). In the case at

hand, plaintiff has met neither the “clear

proof” standard nor the more usually appli-

cable “preponderance of the evidence” stan-

dard in its attempt to demonstrae a con-

spiracy between TARA and Actors’ Equity.

Fifth, plaintiffs argue that in the case at

hand producers conspired with Actors’ Eq-

uity to not deal with nonfranchised agents.

In support of this contention plaintiffs of-

fered hearsay evidence cohsisting of testi-

mony by plaintiffs’ witnesses as to state-

-ments made by producers allegedly in fur-

therance of the conspiracy. This court took,

the testimony subject to proof by plaintiffs

with independent evidence of the existence

of such a conspiracy. The court reserved

decision on defendants’ subsequent motions

to strike the hearsay testimony. Upon

careful consideration of the record, this

court now grants defendants’ motion to

strike, as plaintiffs have failed to prove

with independent evidence the existence of

any conspiracy. While this court’s findings

of fact discuss in detail the independent

evidence allegedly establishing the exist-

ence of a conspiracy, a bgidf recapitulation

is in order.

While Actors’ Equity did request produc-

ers to refrain from dealing with nonfran-

chised agents, plaintiffs have not demon-

strated that Actors’ Equity required pro-

ducers to refrain from dealing with non-

franchised agents. Such requests certainly

do not suffice to demonstrate the existence

of a conspiracy. Nor do Actors’ Equity’s

restrictions upon its own members consti-

tute a conspiracy. Finally, plaintiffs have

not successfully demonstrated a conspiracy

resulting from the alleged requirement of

Actor’s Equity that producers identify the

agent of record on the standard form indi-

vidual employment contracts. In summary,

as the plaintiff has failed to demonstrate

with independent evidence the existence of

a conspiracy between Actors’ Equity and

producers, the hearsay evidence as to state-

ments of producers must be struck from the

record.

. Finally, plaintiffs argue that the restric-

tions imposed by Actors’ Equity’s franchis-

ing system do not further any legitimate.

labor objective. In particular, plaintiffs fo-

cus their challenge upon several features of

the franchising system. Plaintiffs object to

the prohibition of “commissions on scale

wage jobs, chorus jobs, out-of-town expense

money, and rehearsal wages. Plaintiffs’ as-

sertion that commissions affect an actor's

disposable income but do not affect wages

‘js unpersuasive. This court concludes that,

under the facts of this case, commissions on

these items are intimately bound with the

subject of wage scales. Unlike theatre tick-

et prices, photographers’ fees, commuting

costs, or grocery prices, commissions are

directly and proportionately related to

wages.

Plaintiffs also object to the requirement

that agents pay fees in order to be fran-

chised. This court is of the opinion that the

franchise fees are reasonably related to the

operation of the franchise system and the

system's protection of wage scales and

working conditions. While conceivably Ac-

tors’ Equity might someday decide to

charge a fee so high as to not be reasonably

related to the operation of the franchise

system and its goals, the facts before this

court do not present that situation. In

summary, this court finds that the franchis-

ing system of Actors’ Equity is reasonably

related to legitimate labor objectives.

478 FEDERAL SUPPLEMENT

Since this court concludes that defend-

ants’ activities are protected under the stat-

utory labor exemption to antitrust laws, it

is unnecessary to address several issues

presented by defendants: whether Actors’

Equity’s regulations are unreasonable re-

straints of trade, whether plaintiffs are

barred by their conduct from obtaining eq-

uitable relief, and whether an action can be

maintained against defendant Grody in his

individual capacity.

This court concludes that defendant Ac-

tors’ Equity acted in its own self-interest

are protected by the statutory exemption

from antitrust laws. This court finds that

the complaint in this action should be dis-

missed and judgment entered for defend-

ants.

So ordered.

EEE ae

APPENDIX C

SECOND CIRCUIT AFFIMANCE OF DISTRICT COURTS DENIAL

OF A MOTION FOR PRELIMINARY INJUNCTION,

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

At a stated Term of the United States Court of Appeals for

the Second Circuit, held at the United States Courthouse in the

City of New York, on the ninth day of November

» one thousand nine hundrod and seventy-eight.

Present:

Hon. Irving R.

Fasten.

Hon, Walter ae SOR

Hon, Thomas J, Meskill,

Circuit

H. A. ARTISTS & ASSOCIATES, INC., S.T.E.

REPRESENTATION LTD., J. MICHAEL BLOOM,

DON BUCHWALD & ASSOCIATES, INC.;

7827343

AGENCY, INC., JACOBSON-WILDER, INC.,

WILLIAM D. CUNNINGHAM & ASSOCIATES, INC.,

TRANUM ROBERTSON & HUGHES, INC., MONTY

SILVER AGENCY LTD., BRET ADAMS, LIMITED

MICHAEL THOMAS AGENCY, INC,, LESTER Lewis

ASSOCIATES, INC., LEAVERTOW ASSOCIATES LTD.

JOE JORDAN TALENT AGCNCY INC,, RAGLYN-SHAMSKY,

LTD., ANN WRIGHT REPRESENTATIVES, INC.,

ACTORS EQUITY ASSOCIATION, an unincorporated

association, and DONALD GRODY,

Defendants-Appellees.

Appeal from the United States District Court for the Southern

District of New York.

This cause came on to be heard on the transcript of record

from the United States District Court for the Southern District of

New York, and was argued by counsel.

Appellants allege that Equity has unlawfully conspired with

pesseeees to provers them from PN te par Lt ta an epapo: appellants

To merit a preliminary injunction, "the plaintiffs aust prove

chat are likely to succeed on the merits and they are suffering

irreparable injury, or = must prove that they have shown

queeseere going to the ts and a balance of hardships tipping

idedly towards gee t Vv.

o . . .

Equity has offered to re-franchise appellants pendente .

Trial has been set for February, 1979. By temporarily s ting,

albeit under protest, to yy % longstanding regulations until a

disposition on the merits can reached, appellants can avoid the

economic and professional injury they might otherwise suffer as a

result of the olleaedly illegal franchising and "blacklisting"

procedures enforced by Equity.

irreparable’ ury or balance of hardships, "“[A] district court's

denial of prel relief is usually subject to reversal = in

the case of a clear abuse of Sioaresion, |i "2

Vv. . r. H

re's Federal Practice, { BSbal}. No such-abuge of discretion

has been demonstrated.

Thus njory or have failed to demonstrate the requisite

OM CONSIDERATION WHEREOF, it is now hereby ordered, adjudged,

and gered that the order of said District Court be and it hereby

Circuit Judges.

CH he

DISTRICT COURTS DENIAL OF MOTION FOR PRELIMINARY

INJUNCTION.

H.A. ARTISTS & ASSOCIATES, INC. oct al.,

Plaintifce,

- against- : 78 Civ. 2482

ACTORS EQUITY ASSOCIATION, etc., et al.,

Defendants,

APPEARANCES

SOLIN & BREINDEL

By: Howard Breindel

Daniel’ R. Solin

Charles Donelan

530 Fifth Avenue

»New York, New York 10036

Attorneys for Plaintiffs

COHN, GLICKSTFEIN, LURIE, OSTRIN &

LUBFLL

By: Nan C. 3ases

Mary K. O'Melveny

1370 Avenue of the Americas

New York, New York 10019

Attorneys for Defendants

CONE PCT PARER AOTLEY, Devs

Plaintiffs are theatrical acents who are sinc

Actor's Ecuity Association (Mauity) under the federal anti-

trust statutes. Plaintiffs have moved for a preliminary

injunction. This recuest is denied. See order signed this

date.

Plaintiffs seek to enjoin Fauity's enforcement

of its rule that Equity members may not deal with acents who

do not comply with Equity reculations for agents. These

regulations, known as Rule A, limit the fee that acents

can charge an actor. Fouity also recuires that acents be

franchised by Equity and pay Equity a small ‘franchise fee.

Equity has entered into a collective barcaining agreerent

with the producers who hire the actors. As part of that

collective tarcaining agreement, a producer is recuired to

send Equity a cory of any contract it rakes with an actor.

That contract must snecify the actcr'’s acent. In the event

that Equity finds that an actor as using a nonfranchised

acert, such as one of the plairtiffs here, Equity ray

Giscirline the actor. Fauity also notifies the croducers

ci the nares of the agents who are not franchised by Fcuity.

Tcuity bas had this system in effect for some fifty vears,

as *ave other serforrerse' unicns.

In order to obtain a prelirinary int::netion

Che Si alAtos se Hust prove Cal hay nee ati ey Oey eee

on the merits and they are suffering irreparable injury,

or they must prove that they haveeshown serious questions

going to the merits and a balance of hardships tipping

decidedly towards them. Sonesta Int'l Hotels Corp. v.

Wellington Associates,483 F. 2d 247, 250( 2d Cir. 1973).

In order to show a liklihood of success on the

merits here the plaintiffs must show a liklihood that Faquity's

actions are not immune from the antitrust laws under the

labor exemption. Title 15, U.S.C. §17 states:

Antitrust laws not oppiicadie to labor

organizations

The labor of a human being is not a commodity

or article of commerce. Nothing contained in

the antitrust laws shall be construed to forbid

the existance and operation of laber, agricultural,

or horticultural orcanizations, instituted for

the purposes of mutual help, and not having

capital stock or conducted for profit, or to

forbid or restrain individual members of such

organizations from lawfully carrying out the

legitimate objects thereof; nor shall such

organizations, or the members thereof, be held...

to be illeaal combinations or conspiracies in

restraint of trade, under the antitrust laws.

See also 29,0.8.¢. $S201<1i5, 35 U.83¢. g5z.

A union is not exempt from the antitrust laws if

it combines with a non-labor group or if its actions are not

“aher in its own self-interest. Connell Consrruction Co. v.

rlumbers Loca) 100, 421 U.S. 635 (1975). The

-?-

eouct finte that paint’) 6's have not Sheva. a

that Equity's actions falls into either of these two

areas which are outside the labor exemption.

In American Federation of Musicians v. Carroll,

391 U.S. 99 (1968), the Supreme Court held that a musicians’

union's regulation of booking agents and of food caterers

was exempt from the federal antitrust laws because the

agents and caterers were in an "economic interrelationship"

with the members of the musicians' union such that the

agents and caterers were part of a labor group and were

involved in a labor dispute with the union. The Court

also found that the regulations were reasonably related

to the union's interest in maintaining wages and condi-

tions for its members. See also Garrett v. American

Federation of Musicians, 98 L.R.R.M. 2078 (D.S.C. 1978)

(upheld musicians' union's regulation of booking agents

and circulation of "unfair" list of agents who did not

comply with union rules); Adams, Ray & PRosenbera v.

William Morris Acency, 411 F. Supp. 403 (C.D. Ca. 1976)

‘fenial of a preliminary injunction against writers'

union's reaulation of ascents on the ground that Carroll

was likely to control).

In Carrell, supra, the court also uphele the

union's practice, similar to Fauvity's practice, of gather-

ing information about agents by requirina that all contracts,

which included the name of the agent, he filed with the

union.

Plaintiffs contend that Equity has “blacklisted”

the non-franchised agents by notifying the producers that

actors will be subject to discipline if they violate Equity's

rules with respect to employment of non-franchised agents.

The letter cited by plaintiffs does not support their con-

tention that the producers were solicited to blacklist

the plaintiffs. Plaintiffs have not shown that Equity

was doing anything more than disseminating information to

the producers.

While the question whether the agents and

actors are in an economic relationship such that they are

in a labor dispute, and the «uestion whether the recula-

tions are in Fquity's rcasonable self-interest are questions

for trial, plaintiffs have not made a sufficient showing

to overcome the liklihood that’ Fquity's actions will be

@#xempt from the federal antitrust laws under the labor

eyemption.

Therefore, plaintiffs' request for a preliminary

.anerion enjoining the operation of Fquity's reculation

ef 2:28 is denied.

APPENDIX E

CLAYTON ACT §20, 29 U.S.C. §52

Sec. 20. That no restraining order or injunction shall be granted

by any court of the United States, or a judge or the judges

thereof, in any case between an employer and employees, or between

persons employed and persons seeking employment involving, or

growing out of, a dispute concerning terms or conditions of em-

ployment, unless necessary to prevent irreparable injury to

property, or to a property right, of the party making the applic-

ation, for which injury there is no adequate remedy at law, and

such property or property right must be described with particularity

in the application, which must be in writing and sworn to by the

applicant or by his agent or attorney.

And no such restraining order or injunction shall prohibit any person

or persons, whether singly or in concert, from terminating any

relation of employment, or from ceasing to perform any work or labor,

or from recommending, advising or persuading others by peaceful

means so to do; or from attending at any place where any such

person or persons may lawfully be, for the purpose of peacefully

obtaining or communicating information, or from peacefully

persuading any person to work or to abstain from working; or from

ceasing to patronize or to employ any party to such dispute, or

from recommending, advising, or persuading others by peaceful and

lawful means so to do; or from paying or giving to, or withholding

from, any person engaged in such dispute, any strike benefits or

other monies or things of value; or from peaceably assembling in

a lawful manner, and for lawful purpose; or from doing any actor thing

E-1

which might lawfully be done in the absence of such dispute by any

party thereto; nor shall any of the acts specified in this para-

graph be considered or held to be violations of any law of the

United States.

APPENDIX F

SECTIONS 5 - 15 OF THE NORRIS - LA GUARDIA ACT

(29. U.S.C. §105 - 115.)

§ 105. Doing in concert of certain acts as constituting un-

lawful combination or conspiracy subjecting per-

son to injunctive remedies

No court of the United States shall have jurisdiction to issue a

restraining order or temporary or permanent injunction upon the

ground that any of the. persons participating or interested in a labor

dispute constitute or are engaged in an unlawful combination or

conspiracy because of the doing in concert of the acts enumerated

in section 104 of this title.

Mar. 23, 1932, c. 90, § 5, 47 Stat. 71.

§ 106. Responsibility of officers and members of associa-

tions or their organizations for unlawful acts of

individual officers, members, and agents

No officer or member of any association or organization, and no

association or organization participating or interested in a labor

dispute, shall be held responsible or liable in any court of the Unit-

ed States for the unlawful acts of individual officers, members, or

agents, except upon clear proof of actual participation in, or actual

authorization of, such acts, or of ratification of such acts after ac-

tual knowledge thereof.

Mar. 23, 1932, c. 90, § 6, 47 Stat. 71.

§ 107. Issuance of injunctions in labor disputes; hearing;

findings of court; notice to affected persons; tem-

porary restraining order; undertakings

No court of the United States shall have jurisdiction to issue a

temporary or permanent injunction in any case involving or growing

out of a labor dispute, as defined in this chapter, except after hear-

ing the testimony of witnesses in open court (with opportunity for

cross-examination) in support of the allegations of a complaint

made under oath, and testimony in opposition thereto, if offered,

and except after findings of fact by the court, to the effect—

(a) That unlawful acts have been threatened and will be commit-

ted unless restrained or have been committed and will be continued

unless restrained, but no injunction or temporary restraining order

shall be issued on account of any threat or unlawful act excepting

against the person or persons, association, or organization making

the threat or committing (he unlawful act or actually authorizing or

ratifying the same after actual knowledge thereof;

(b) That substantial and irreparable injury to complainant's

property will follow;

inflicted upon complainant by the denial of relief than will be in-

flicted upon defendants by the wranting of relief:

(d) That complainant has no adequate remedy at law; and

(e) That the public officers charged with the duty to protect com-

plainant’s property are unable or unwilling to furnish adequate pro-

tection.

Such hearing shall be held after due and personal notice thereof

has been given, in such manner as the court shall direct, to all

known persons against whom relief is sought, and also to the chief

of those public officials of the county and city within which the un-

lawful acts have been threatened or committed charged with the

duty to protect complainant's property: Provided, however, That if

a complainant shall also allege that, unless a temporary restraining

order shall be issued without notice, a substantial and irreparable

injury to complainant's property will be unavoidable, such a tempo-

rary restraining order may be issued upon testimony under oath,

sufficient, if sustained, to justify the court in issuing a temporary

injunction upon a hearing after notice. Such a temporary restrain-

ing order shall be effective for no longer than five days and shal!

become void at the expiration of said five days. No temporary re-

straining order or temporary injunction shall be issued except on

condition that complainant shall first file an undertaking with ade-

quate security in an amount to be fixed by the court sufficient to

recompense those enjoined for any loss, expense, or damage caused

by the improvident or erroneous issuance of such order or injunc-

tion, including all reasonable costs (together with a reasonable at-

torney’s fee) and expense of defense against the order or against

the granting of any injunctive relief sought in the same proceeding

and subsequently denied by the court.

The undertaking mentioned in this section shall be understood to

signify an agreement entered into by the complainant and the surety

upon which a decree may be rendered in the same suit or proceeding

against said complainant and surety, upon a hearing to assess dam-

ages of which hearing complainant and surety shall have reasonable

notice, the said complainant and surety submitting themselves to

the jurisdiction of the court for that purpose. But nothing in this

section contained shall deprive any party having a claim or cause of

action under or upon such undertaking from electing to pursue his

ordinary remedy by suit at law or in equity.

Mar. 23, 1932, c. 90, § 7, 47 Stat. 71.

§ 108. Noncompliance with obligations involved in labor dis-

putes or failure to settle by negotiation or arbitra-

tion as preventing injunctive relief

No restraining order or injunctive relief shall be granted to any

complainaat who has failed to comply with any obligation imposed

by law which is involved in the labor dispute in question, or who

has failed to maké every reasonable effort to settle such dispute ei-

ther by negotiation or with the aid of any available governmental

machinery of mediation or voluntary arbitration.

Mar. 23, 1932, c. 90, § 8, 47 Stat. 72.

§ 109. Granting of restraining order or injunction as de-

pendent on previous findings of fact; limitation on

prohibitions included in restraining orders and in-

junctions

No restraining order or temporary or permanent injunction shall

be granted in a case involving or growing out of a labor dispute, ex-

cept on the basis of findings of fact made and filed by the court in

the record of the case prior to the issuance of such restraining or-

der or injunction; and every restraining order or injunction grant-

ed in a case involving or growing out of a labor dispute shall in-

clude only a prohibition of such specific act or acts as may be ex-

pressly complained of in the bill of complaint or petition filed in

such case and as shal! be expressly included in said findings of fact

made and filed by the court as provided in this chapter.

Mar. 23, 1932, c. 90, § 9, 47 Stat. 72.

§ 110. Review by Court of Appeals of issuance or denial of

temporary injunctions; record; precedence

Whenever any court of the United States shall issue or deny any

temporary injunction in a case involving or growing out of a labor

dispute, the court shall, upon the request of any party to the pro-

ceedings and on his filing the usual bond for costs, forthwith certi-

fy as in ordinary cases the record of the case to the court of appeals

for its review. Upon the filing of such record in the court of ap-

peals, the appeal shall be heard and the temporary injunctive order

affirmed, modified, or set aside with the greatest possible expedi-

tion, giving the proceedings precedence over all other matters ex-

cept older matters of the same character.

Mar. 23, 1932, c. 90, § 10, 47 Stat. 72; June 25, 1948, c. 646, § 32(a),

62 Stat. 991; May 24, 1949, c. 139, § 127, 63 Stat. 107.

§§ 111,112. Repeuled. June 25, 1948, c. 645, § 21, 62

Stat. 862, eff. Sept. 1, 1948

§ 113. Definitions of terms and words used in chapter

When used in this chapter, and for the purposes of this chapter—

(a) A case shall be held to involve or to grow out of a labor dis-

pute when the case involves persons who are engaged in the same

industry, trade, craft, or occupation; or have direct or indirect in-

terests therein; or who are employees of the sume emonlover: or

who are members of the same or an affiliated organization of em-

ployers or employees; whether such dispute is (1) between one or

more employers or associations of employers and one or more em-

ployees or associations of employees; (2) between one or more em-

ployers or associations of employers and one or more employers or

associations of employers; or (3) between one or more employees or

associations of employees and one or more employees or associations

of employees; or when the case involves any conflicting or compet-

ing interests in a “labor dispute” (as defined in this section) of

“persons participating or interested” therein (as defined in this sec-

tion).

(b) A person or association shall be held to be a person partici-

pating or interested in a labor dispute if relief is sought against

him or it, and if he or it is engaged in the same industry, trade,

craft, or occupation in which such dispute occurs, or has a direct or

indirect interest therein, or is a member, officer, or agent of any as-

sociation composed in whole or in part of employers or employees

engaged in such industry, trade, craft, or occupation.

terms or conditions of employment, or concerning the association or

representation of persons in negotiating, fixing, maintaining, chang-

ing, or seeking to arrange terms or conditions of employment, re-

gardiess of whether or not the disputants stand in the proximate re-

lation of employer and employee.

(d) The term “court of the United States” means any court of the

United States whose jurisdiction has been or may be conferred or

defined or limited by Act of Congress, including the courts of the

District of Columbia.

Mar. 23, 1932, c. 90, § 13, 47 Stat. 73.

§ 114. Separability of provisions

If any provision of this chapter or the application thereof to any

person or circumstance is held unconstitutional or otherwise invalid,

the remaining provisions of this chapter and the application of such

provisions to other persons or circumstances shall not be affected

thereby.

Mar. 23, 1932, c. 90, § 14, 47 Stat. 73.

§ 115. Repeal of conflicting acts

All acts and parts of acts in conflict with the provisions of this

chapter are repealed.

Mar. 23, 1932, c. 90, § 15, 47 Stat. 73.

53 F4

APPENDIX G

GENERAL BUSINESS LAW OF THE STATE OF NEW YORK, ARTICLE 11

§180. Theatrical employment; financial investigations and security

A theatrical employment agent shall investigate whether

or not any employer (person, firm or corporation) who is offering

employment to an applicant for employment has defaulted in the

payment of salaries, fees or other compensation to any performer

or sroup of performers or has left stranded any performing companies

or individuals or groups, during the five years preceding the

date of the application. An agent shall not procure or undertake

to procure employment or engagements on the part of any performer

or groups of performers for an employer who has failed to pay

salaries, fees or other compensation, or who has left stranded any

performer or groups of performers or any performing companies or

individuals during the five years preceding the date of the ap-

plication, unless such employer (person, firm or corporation) shall

provide sufficient security for the direct benefit of the performer

or performers and in an amount ample to pay the performer or

performers their full compensation for the special employment or

engagement designated in the employment or engagement contract.

The provisions of this section shall not apply to employment or

engagements in modeling.

$183. Theatrical employment; contracts

Every licensed person who shall procure for or offer to

an applicant a theatrical engagement shall have executed in

duplicate a contract or deliver to the parties as herein set forth

a statement containing the name and address of the applicant; the

name and address of the employer of the applicant and of the person

acting for such employer in employing such applicant; the time

and duration of such engagement; the amount to be paid to such

applicant; the character of entertainment to be given or service

to be rendered; the number of performances per day or per week

that are to be given by said applicant; if a vaudeville engagement,

the name of the person by whom the transportation is to be paid,

and if by the applicant, either the cost of transportation between

the places where said entertainment or services are to be given

or rendered, or the average cost of transportation between the

places where such services are to be given or rendered; and if a

dramatic engagement the cost of transportation to the place where

the service begin if paid by the applicant; and the gross com-

mission or fees to be paid by said ajplicant and to whom. Such

contracts or statements shall contain no other conditions and

provisions except such as are equitable between the parties thereto

and do not constitute an unreasonable restriction of business.

Forms of such contract and statement in blank shall be first

approved by the commissioner and his determination shall be

reviewable by certiorari. One of such dunlicate contracts or of

such statements shall be delivered to the person engaging the

applicant and the other shall be retained by the applicant. The

licensed person procuring such engagement for such applicant shall

keep on file or enter in a book provided for that purpose a copy

of such contract or statement.

§185. Fees

l. Circumstances permitting fee. An employment agency

shall not charge or accept a fee or other consideration unless in

accordance with the terms of a written contract with a job ap-

plicant, except for class "A: and "Al" employment, and except after

such agency has been responsitle for referring such job applicant

to an employer or such employer to a job applicant and where as a

result thereof such job applicant has been employed by such

employer. The maximum fees provided for herein for all types of

placements or employment may be charged to the job applicant and

a similar fee may be charged to the employer. By agreement with

an employment agency, the employee may voluntarily assume payment

of the job applicant's fee. The fees charged to employers by any

licensed person conducting an employment agency for rendering

services in connection with, or for providing employment in classes

"A", "Al", and "B", as hereinafter defined in subdivision four of

this section where the applicant is not charged a fee shall be de-

termined by agreement between the employer and the employment

agency. No fee shall be charged or accepted for the registration

of applicants for employees or employment.

2. Size of fee; payment schedule. The gross fee charged

to the job applicant and the gross fee charged to the employer

each shall not exceed the amounts enumerated in the schedule set

forth in this section, for any single employment or engagement,

except as hereinabove provided; and such fees shall be subject to

the provisions of section one hundred eighty-six of this article.

Except as otherwise provided herein, an employment agency shall

G- 3

not require an applicant, while employed in the continental United

States, and paid weekly, to pay any fee at a rate greater than in

six equal weekly installments each of which shall be payable at

the end of each of the six weeks of employment or, if paid less

frequently, in three equal installments, each of which shall be

payable at the end of the first three pay periods following his

employment, or within a period of six weeks, whichever period is

shorter. An employer's fee shall be due and payable at the time

the applicant begins employment, unless otherwise determined by

agreement between the employer and the agency.

3e Deposits, advance fees. Nothwithstanding any other

provisions of this section, an eam loynent agency may not require

a deposit or advance fee from any applicant except an applicant

for class "A" or class "Al" employment, and only to the extent of

the maximum fees hereinafter provided. Such deposit or advance

fee shall be offset against any fee charged or accepted when such

employment is obtained. Any excess above the lawful fee shall be

returned without demand therefor, immediately after the employ-

ment agency has been notified that such employment has been ob-

tained; and all of such deposit or advance fee shall be returned

immediately upon demand therefor, if at the time of the demand

such employment has not been obtained.

4. Types of employment. For the purpose of placing

a ceiling over the fees charged by persons conducting employment

agencies, types of employment shall be classfied as follows:

Class "A" - domestics, household employees, unskilled

or untrained manual workers and laborers, including

agricultural workers;

Class "Al" - nonprofessional trained or skilled indus-

trial workers or mechanics;

Class "B" - commercial, clerical, executive, administrative

and professional employment, all employment outside the

continental United States, and all other employment not

included in classes "A", "Al", "C" and "D";

Class "C" - theatrical engagements;

Class "D" - nursing engagements as defined in article

one hundred thirty-nine of the education law.

5. Fee ceiling. For a placement in class "A" employ-

ment the gross fee, including the deposit if any, shall not exceed,

in percentage of the furst full month's salary or wages, the

following:

where no meals or lodging are provided............10%

where ane meal per working day is provided........12%

where two meals per working day are provided......14%

where three meals and lodging per working day

MP WEE cece cece ccccccnccccccccccccccc cc bee

Where all parties to the employment agreement understand or agree

at the time the employment is entered into that it shall be for

a period dmocter than one month, the gross fee shall not exceed

ten per cent, twelve per cent, fourteen per cent or eighteen per

cent respectively of the salary or wages actually paid.

6. Fee ceiling. For a placement in Class "Al" employ-

ment the gross fee shall not exceed one week's wages where all

parties to the employment agreement understand or agree at the time

G=-5

the employment is entered into that it shall be for a period for

ten weeks or more. Where all parties to the employment contract

agree and understand at the time the employment contract is

entered into that it shall be for a period shorter than ten weeks,

the gross fee shall not exceed ten per cent of the wages or salary

actually received.

7. Fee ceiling. For a placement in Class "B" employment

the gross fee shall not exceed, in percentage of the first full

month's salary or wages, the following:

where such first full month's salary or wages is

less than $225...cccccccccccccccccccccscscscve soe

at least $225 but less than $270......eeeeeeeeeee e358

at least $270 but less than $300......seeeeeeee ee 40%

at least $300 but less than $330......eceeeeee eee o 45%

at least $330 but less than $365......eeeeeeeeeee 50%

at least $365 but less than $400......ceceeeeeeeee SDB

at least $400 OF MOTE... cere ecesceesecvcreeseee sO0%

Provided however, that where the placement is for employment in

which the applicant will be paid on a straight commission basis

Or on the basis of a drawing account plus commissions, the gross

fee shall be based on percentages in the above schedule applied to

an amount equivalent to one-twelfth of the estimated first year's

earnings, as estimated by the employer.

Where all parties to the employment contract agree and

understand at the time the employment contract is entered into that

it shall be for a period shorter than four months the gross fee

shall not exceed fifty per cent of the fee prescribed in the

schedule in this subdivision or ten per cent of the wages or salary

actually received, whichever is less.

G-6

8. Fee ceiling. For a placement in class "C" employment

the gross fee shall not exceed, for a single engagement, ten per

cent of the compensation payable to the applicant, except that

for employment or engagements for orchestras and for employment or

engagements in the opera and concert fields such fees shall not

exceed twenty per cent of the compensation.

9. Fee ceiling. For a placement in class "D" employment

the gross fee shall not exceed, for a single engagement, the

following:

(1) for private nursing duty, five per cent of the salary

or wages received each week through the first ten weeks

of that engagement only, and such fee shall be due and pay-

able at the end of each such week;

(2) for any other nursing duty, the amount of the first

week's salary or wages unless the first year's computed

Salary or wages to be derived for at least one year's

employment is twenty-five hundred dollars or more, in

which event the gross fee shall not exceed, in percentage

of such salary or wages, the following:

where such first year's salary or wages is:

at least $2500 but less than $3000.........000005-2-1/2%

at least $3000 but less than $3500.......0005000253%

at least $3500 but less than $4000.........000062-3-l1/2%

at least $4000 but less than $4500..........256545.4%

at least $4500 but less than $5000. ..ecceecceeecee4=l/2%

$5000 or 6 666A CEPR REEEE OES RMRE SUH RECC CRED VM OCRREE

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.