# Appendix — HA Artists & Associates, Inc. v. Actors' Equity Assn. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_0367%3A03 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1981 - **Citation:** 451 U.S. 704 ## Text IN THE . 266 3. 1980 Supreme Court of the United States October Term, 1980 No. 80-348 H.A. ARTISTS & ASSOCIATES, INC.; S.T.E. REPRESENTA- TION LTD.; J. MICHAEL BLOOM, LTD.; DON BUCHWALD & ASSOCIATES, INC.; MARJE FIELDS, INC.; HENDERSON/ HOGAN AGENCY _INC., OPPENHEIM-CHRISTIE ASSO- CIATES LTD.; JOEL PITT LTD.; TALENT REPRESENTA- TIVES INC.; D.M.I. TALENT ASSOCIATES, LTD.; JEAN THOMAS AGENCY, INC.; BOB WATERS 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.; LEAVERTON ASSOCIATES LTD.; JOE JORDAN TALENT AGENCY INC.; RAGLYN- SHAMSKY, LTD.; ANN WRIGHT REPRESENTATIVES INC., Petitioners, Vv . ACTORS’ EQUITY ASSOCIATION, an unincorporated association, and DONALD GRODY, Respondents. ON WRIT OF CERTIORARI TO THE UNITED STATES CouRT OF APPEALS For THE SECOND CIRCUIT JOINT APPENDIX CHARLES DONELAN, Esq. JEROME B. Lurie, Esq. Bowditch & Dewey Cohn, Glickstein, Lurie, Ostrin, 311 Main Street Lubell & Lubell Worcester, Mass. 01608 1370 Avenue of the Americas (617) 791-3511 ee eee 10019 12) 757 HowarD BREINDEL, Esq. Solin & Breindel P.C. Counsel for Respondents 530 Fifth Avenue New York, New York 10036 (212) 221-3760 Counsel for Petitioners Petition for Certiorari Filed August 21, 1980 Certiorari Granted November 17, 1980 Chronological List of Relevant Docket Entries. Petitioners' Complaint. Respondents' Amended Answer. Stipulated Facts Portion Of The Joint Pretrial Order Filed In The District Court. Transcript Of Trial Proceedings: Trial Testimony Of Thelma Raider. Trial Testimony Of Howard Hausman. Trial Testimony Of Donald Grody. Trial Testimony Of Robert Fishko. Trial Testimony Of Mary Louise Britton. Trial Testimony Of Barbara Lea. . Trial Testimony Of Theodore Bikel. Trial Testimony Of Guy Pace. -i- 30 47 76 123 127 143 147 152 164 av Trial Stipulations Of ees « + «ee * «6 eu i178 Transcripts Of Oral Depositions: Deposition Testimony Of meaner Petiiio®. + « + « » 2 183 Deposition Testimony Of ponnieg GEGGy. « » 1» » © 6 8 191 Trial Exhibits: Petitioners' Exhibit No. 3 - Letter Dated March 25, 1975. 7 . o 2 . ° * o 7 _ . 195 Petitioners' Exhibit No. 5 - Minutes Of Meeting Of . November 25, 1975. . ... -« 206 Petitioners' Exhibit No. 67 - Letter Dated meee 2h Beete -@ @ » 6 @°% 207 Petitioners' Exhibit No. 71 - Letter Dated GSSeRer 2h. BE le «03 «& 6 e 209 Petitioners' Exhibit No. 72 - Letter Dated GOCGROE. Ase BET c sw © oe 245 Respondents' Exhibit K-1l - Exclusive Management COMTEGEGs ¢ © +. -+ 2 ess © 248 Respondents’ Exhibit K-2 - Agency Authorization. .. 265 Respondents’ Exhibit Q - Licensing Contract. .. 279 oiia Respondents' Exhibit AA - Excerpts From "The Revolt Of The Actors". Opinion Of The District Court Denying Petitioners' Motion For A Preliminary Injunction Dated June 29, Opinion Of The Court Of Appeals Affirming The Denial Of Petitioners' Motion For A Preliminary Injunction Dated November 9, Opinion Of The District Court Dismissing Petitioners' Complaint Dated October 12, Opinion Of The Court Of Appeals Affirming The Dismissal Of Petitioners' Complaint. Page 291 Pet.App.Dl Pet .App.Cl Pet .App.Bl 332 CHRONOLOGICAL LIST OF RELEVANT DOCKET ENTRIES May 26, 1978 - Petitioners' complaint filed in the United States District Court For The Southern District Of New York. May 31, 1978 - Petitioners' motion for a preliinary injunction filed in the District Court. 22, 1978 - Hearing in the District Court with respect to petitioners' motion for a preliminary injunction. 27, 1978 - Respondents' answer filed in the District Court. 29, 1978 - Order and Opinion of the District Court denying petit- ioners' motion for a preliminary in- junction. 12, 1978 - Petitioners' notice of appeal to the United States Court Of Appeals For The Second Circuit from the Order and Opinion of the Dis- trict Court denying petitioners' motion for a preliminary injunction filed. November 22, 1978 - Respondents' amended answer filed. November 9, 1978 - Order and Opinion of the Court Of Appeals affirming the Order and Opinion of the Dis- trict Court denying petitioners' motion for a preliminary injunction. ole May 24, 1979 - Joint Pre-trial Order filed in the District Court. June 21, 25, 26, 28 and August 7 and September 28, 1979 = Trial of the action in the District Court. October 24, 1979 - Opinion of the District Court dismissing petit- ioners' complaint. October 29, 1979 - Judgment dismissing petitioners' complaint. November 21, 1979 - Petitioners' notice of appeal from the October 24, 1979 Opinion of the District Court filed. November 29, 1979 - Petitioners' amended notice of appeal from the October 29, 1979 Judgment of the District Court filed. May 23, 1980 - Opinion of the Court of Appeals affirming the Opinion of the District Court dismissing pet- itioners' complaint. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK COMPLAINT (78 CIV. 2452 (CBM) ) Plaintiffs, for their complaint, al- lege as follows: le This action for injunctive re- lief arises out of defendants' violations of Sections 1 and 2 of the Sherman Act (15 U.S.C. §§1 and 2). This Court's juris- diction over the subject matter of this action rests on Section 16 of the Clayton Act (15 U.S.C. §26). Re Each defendant inhabits, main- tains an office, transacts business, or may be found within the Southern District of New York. The interstate trade and commerce involved and affected by the hereinafter-mentioned violations of the antitrust laws has been and still is Carried on in part within the Southern District of New York. = 3- DEFINITIONS 3. As used herein the term: A. "Equity" shall refer to defend- ant Actors Equity Association; B. "Member" shall refer to a mem- ber of Equity; C. "Actor" shall include actors, actresses, performers, entertainers, and anyone else who performs in live legit- imate theatrical productions “such as plays and revues; D. "Theatrical agent" includes any person or entity engaged in the business of obtaining employment for actors in live legitimate theatrical productions and rendering related services to actors; E. "Franchised agent" shall mean a theatrical agent who is franchised by Equity to perform services for members; o4- F. "Nonfranchised agent" shall mean a theatrical agent who is not fran- chised by Equity; G. "Producer" shall include any person or entity engaged in the business of producing live legitimate theatrical productions on Broadway, off Broadway, at dinner theatres, in summer stock, at in- dustrial shows and elsewhere. PARTIES 4. Each plaintiff is a theatrical agent having a place of business and doing business in the city, county and state of New York. 5. At all relevant times, defend- ant Equity has been an unincorporated as- sociation, functioning in part as a labor union on behalf of those of its members who perform in legitimate theatrical pro- ductions, with its principal place of = Sa business at 1500 Broadway, New York, New York. Since at least 1940, virtually all persons who have regularly performed in legitimate theatrical productions in the United States have been or become members of Equity and virtually all producers have been parties to collective bargain- ing agreements with Equity. Each plain- tiff has a substantial number of clients who are members of Equity and who have performed in legitimate theatrical pro- ductions. At present, Equit, ‘has approx- imately 11,000 members. 6. Defendant Donald Grody has been and is the Executive Director of Equity. Upon information and belief, Mr. Grody resides in the city, state and county of New York. CO-CONSPIRATORS Fe Persons not made defendants herein have participated as co-conspir- ~~ = ators with Equity in the offenses alleged in this complaint and performed acts and made statements in furtherance of said offenses. Such co-conspirators include, but are not limited to: A. Theatrical Artists Repre- sentatives Association, Inc. ("TARA"). TARA is, and at all per- tinent times has been, an assoc- iation of theatrical agents; B. All franchised agents; Sa All favored nonfranchised agents whom Equity allows to perform theatrical agency services without interference; D. All producers whom Equity has coerced, threatened or attempted to coerce or threaten, to refuse to deal with nonfranchised agents or who have supplied Equity with the = Fa identity of an agent representing a member: TRADE AND COMMERCE 8. In the United States, there is and has been for many years a separate national market and various regional sub- markets for legitimate theatrical pro- ductions. Such productions are performed in numerous cities throughout the coun- try. The largest submarket exists in New York City, where such performances are presented on and off Broadway. Live thea- trical performances have also been pre- sented by summer stock groups, dinner theatres and have been sponsored by in- dustrial corporations. Numerous persons travel over state lines to attend the foregoing legitimate theatrical pro- ductions and actors and companies of actors travel in interstate commerce to at. perform in said productions. Plaintiffs and other theatrical agents obtain em- ployment for their actor-clients through- out the United States. 9. From at least 1940 to the pre- sent, Equity has been a party to collec- tive bargaining agreements with virtually all producers in the United States. Since at least 1960, Equity has entered into collective bargaining agreements with the following associations, which represent producers in the following fields: Association Field League of New York Theatres Broadway productions League of Off- Broadway Theatres Off-Broadway productions Council of Stock Non-resident stock dramati Theatres productions Council of Resident Resident stock dramatic Stock Theatres productions League of Resident Resident repertory Theatres theatre productions ~_ American Dinner Dinner theatre Theatre Institute productions Musical Theatre Indoor musical Association productions Association of Outdocr musical Civic Musical stock productions Theatres 10. Equity's collective bargaining agreements with the above-described asso- ciations of producers contain provisions, among others, to the following effect: A. producers, with limited exceptions, agree only to employ actors who are or become members of Equity; B. producers agree not to deal with agents who are not fran- chised by Equity in these precise or substantially similar terms: "The producer has notice that if the negotiation for, or the obtaining of, a contract by the Actor is through any employment agent or personal repre- sentative not holding a permit from Equity, or one whose permit is not in ~10= good standing, he is not only breaching the rules of Equity in employing the Actor under such con- dition, but is doing so with the knowledge that the Actor himself is lia- ble for suspension or other disciplinary action by Equity and that he may thus be deprived of the Actor's services in this company"; The combination of these provisions and Equity's rules relating to agents and members endows Equity with the power to prevent and threaten prevention of, the performance of a legitimate theatrical production by a producer. ll. Theatrical agents have _ func- tioned and still do function as independ- ent business entities. They bear sub- stantial overhead for office space, em- ployees, telephone services and other services and the economic risk of loss arising from the business of providing agency services to actors. Virtually all -ll-e of their revenues are derived from com- missions in connection with employment they have obtained from their actor- clients. No commissions or other re- muneration are received by the agents for their many unsuccessful attempts to ob- tain employment or for their consulting and related services rendered to actors. 12. The parties through their aforesaid national and interstate activ- ities relating to the employment of actors in legitimate theatrical pro- ductions are engaged in interstate com- merce. As such, they are responsible for a regular, continuous and substantial flow of invoices, bills, contracts, monies and people in interstate commerce. THE ILLEGAL CONDUCT 13. Equity's membership consists of virtually all persons regularly employed -12— in legitimate theatre productions throughout the United States. Equity thus has virtually total control over the labor market for actors in legitimate theatre productions throughout the United States. 14. Equity has promulgated internal rules governing the conduct and dis- cipline of its members. By virtue of its control over the labor market for actors in legitimate theatre productions, Equity has been able to enforce these rules by internal disciplinary procedures, which have in some cases resulted in fines, sus- pension, censure and expulsion of members from Equity. 15. Equity's internal rules pro- hibit members from employing, being ser- viced by, or paying commissions to non- franchised agents. Equity's franchise agreements with agents require the fran- =13= chised agents to adhere to Equity's rules. These rules comprehensively govern virtually all the terms and con- ditions pursuant to which a franchised agent can represent a member, including the maximum commission chargeable by, and payable to franchised agents. 16. In 1958, following meetings with TARA, Equity and TARA entered into a "sweetheart" agreement which purported to formulate the terms of a standard form franchise agreement binding all thea- trical agents, as well as comprehensive rules regarding relations between thea- trical agents and members known = as "Equity Rules Governing Rule A" or as "Rule A". By the terems of Equity's standard form franchise agreement for theatrical agents, all of the terms of Rule A were incorporated by reference in- to the franchise agreement and were made binding upon the agents. -14- 17. Rule A contains the following provisions, among others: A. only franchised agents may represent members; B. members may not be repre- sented by nonfranchised agents; Cc. the applications of TARA members and prior franchised agents as of June 4, 1958, for Equity fran- cises will be automatically granted. Other theatrical agents must pass Equity's formal application proced- ures; D. Equity may waive com- pliance with its franchising re- quirements for theatrical agents it desires to favor and such a waiver unless otherwise stated is irrevoc- able; E. the maximum commission rates franchised agents may charge ~15- members, the duties of the agents to members, and the terms and con- ditions of contracts between agents and Equity members; F. a contract between a fran- chised agent and a member is valid only so long as the agent is fran- chised (thus, if Equity disenfran- chises an agent, for whatever reason, or the agent resigns his franchise, that agent's contracts with members atuomatically termin- ate) ; G. all disputes between: any franchised agent and Equity; TARA and Equity; any franchised agent and an Equity member; must first be sub- mitted to a joint Equity-TARA com- mittee for settlement unless’ the agent objects in writing. In the event of an objection or if no set- -16- telment can be reached there is to be an arbitration in which Equity as an ex-offico party represents all actors and TARA as an ex-officio party represents all agents. If an agent objects to representation by TARA, TARA may nevertheless be re- presented at the arbitration pro- ceedings; H. Equity may invoke discip- linary proceedings against fran- chised agents which may result in franchise revocation or suspension, fines of up to $5000; and forfeiture of commissions owed to the agents; I. franchised agents must pay initial and annual franchise fees to Equity; J. franchised agents may not deal with producers who are on Equity's blacklist of producers (eu- ai F< phemistically termed "the defaulting managers list of Equity"); K. franchised agents may not represent actors who are not or do not become members. The provisions of Rule A are supplemented by: (1) the by-laws of Equity which sub- ject a member who deals with a nonfran- chised agent to expulsion from Equity; (2) the provisions in all collective bargaining agreements between Equity and the various producers groups or leagues referred to above in paragraph 10B. 18. Rule A as enforcecé and main- tained by Equity has no legitimate labor objective or purpose and exists primarily to allow Equity: A. to discriminate against plaintiffs and other nonfavored theatrical agents for the benefit of franchised agents and nonfranchised agents favored by Equity; -18- B. to totally, absolutely and arbitrarily regulate and dominate the manner in which’ theatrical agents conduct their business, des- pite the fact that these independant businesses are not employers of mem- bers, but rather obtain employment for them. 19. In 1977, plaintiffs and other agents determined that they wouie no longer continue to have the conduct of their business dominated and regulated by Equity and TARA. Accordingly, plaintiffs resigned their franchises in Equity and those plaintiffs who were members of TARA resigned from TARA because they could not in good conscience accept the terms and proposals for franchising of agents being negotiated by Equity and TARA. 20. Thereafter, in order to force nonfranchised agents, including plain- -19- tiffs, to become franchised, Equity or- ganized and engaged in a group boycott by coercing and threatening producers and actors to refuse to deal with nonfran- chised agents. The group boycott has been perpetrated, in part, by the dissem- ination of a blacklist dated December 27, 1977 to all producers and by agents of Equity threatening producers with de- privation of actors if they deal with a nonfranchised agent. In the cover letter accompanying the blacklist, Equity ad- vised the producers, and sought their participation in the group boycott, as follows: "'The producer has notice if the negotiations for, or the obtaining of this contract, by the Actor is through any enm- ployment agent or personal re- presentative not holding a permit from Equity, or one whose permit is not in good standing, he is not_ only breaching the rules of Equity in employing the Actor under such conditions, but is doing -20- tiffs and others. so with the knowledge that the Actor himself is liable to sus- pension or other disciplinary action to Equity and that he may thus be deprived of the Actor's services in this com- pany.' None of these agents may repre- sent Actors' Equity members ex- cept under certain special cir- cumstances. We urge you, therefore, to contact the Equity office if any of the agents on the attached list are identified as the agent of re- cord of any of your employees. We seek your cooperation in up- holding your obligation to the Collective Bargaining Agreement in this regard." (Emphasis supplied) 21. In furtherance of the boycott, Equity has threatened clients of nonfranchised agents with expulsion from Equity if they deal with a nonfranchised agent and has directed these clients to refuse to pay commissions owed to plain- the producers to advise Equity of the identity of each agent of any member that the producer may employ. =2leo Equity also requires 22. Each of the allegations in the foregoing paragraphs are incorporated by reference in each of the following claims as if set forth fully therein. FIRST CLAIM 23. At all relevant times, = and since prior to January 6, 1977, defend- ants and co-conspirators have unreason- ably restrained trade in the interstate commerce of the rendering of services by theatrical agents to actors, in violation of Section 1 of the Sherman Act, by, among other things, combining, agreeing and/or conspiring: A. to eliminate and destroy the business of plaintiffs and other nonfranchised agents who are not favored by Equity; -22- B. to diminish and eliminate com- petition between (1) plaintiffs and other nonfranchised agents who are not favored by Equity and (2) fran- chised agents and _ nonfranchised agents favored by Equity; Cc. to discriminate against plain- tiffs and other nonfranchised agents who are not favored by Equity; D. to fix, stablize and maintain the maximum commissions theatrical agents may charge members and to control the other terms and con- ditions pursuant to which theatrical agents render services to members; E. to eliminate price and non- price competition between theatrical agents; PF. to deprive members of their free choice of theatrical agents; ~~ G. to deprive producers of their free choice of theatrical agents and members; H. to have Equity threaten to take, and to take disciplinary mea- Sures against members, who have en- tered into contracts or dealt with plaintiffs and other nonfranchised agents who are not’ favored by Equity; I. to have Equity threaten pro- ducers with loss of services of its members if such producers employed members through plaintiffs and other nonfranchised agents who are not favored by Equity. 24. For the purpose of forming and effectuating the foregoing combinations, agreements and conspiracies, defendants co-conspirators have done those things which, as hereinbefore charged, ~24- they combined, agreed and consipired to do. as, Tae foregoing combinations, conspiracies and agreements have had the following effects, among others: A. competition between (1) plain- tiffs and other nonfranchised agents who are not favored by Equity and (2) franchised agents and nonfranchised agents favored by Equity, has been diminished or eliminated; B. Plaintiffs and other nonfran- chised agents who are not favored by Equity have been and are prevented from rendering services to members and face elimination from the bus- iness of rendering services as thea- trical agents to members; C. members have been denied the opportunity to select the theatrical agents of their choice to represent =25- them and have lost employement op- portunities that would have other- wise been available to them; D. producers have been prevented from using theatrical agents’ and members of their choice; E. the maximum commission charged by theatrical agents have been fixed, stabilized and maintained as have the other terms and conditions pursuant to which theatrical agents render services to members; F. producers and members have been threatened, coerced, and pressured to refuse to deal with plaintiffs and other nonfranchised agents who are not favored by Equity. 26. The restraints of trade alleged herein are unreasonable and not reason- ably related to any legitimate labor- oriented objectives of Equity. =36= 27. As a direct and proximate re- sult of the foregoing restraints, plain- tiffs have been and continue to be irre- parably injured in their trade or busin- ess. T 28. Plaintiffs have no adequate remedy at law. SECOND CLAIM 29. All of the aforesaid acts and conduct of defendants and co-conspirators have constituted and continue to con- stitute an illegal monopolization, at- tempt to monopolize and combination and conspiracy to monopolize the trade and commerce of the business of procuring em- ployment for actors in legitimate theatre productions and the rendering of related services in interstate commerce, in vio- lation of Section 2 of the Sherman Act. =o 2Fan 30. As a direct and proximate re- sult of the aforesaid illegal acts and conduct of defendants and co-conspir- ators, plaintiffs have been irreparably injured in their business and property. 31. Plaintiffs have no adequate re- medy at law. WHEREFORE, plaintiffs seek judgment against defendants: A. preliminarily and permanently enjoining defendants from in any way interfering with plaintiffs attempt- ing to or rendering of any services to any member or any producer, in- cluding but not limited to, threat- ening any producer or member with any disciplinary action. B. awarding plaintiffs the reason- able costs and disbursements of this action, including attorneys' fees; and C. granting such other and further relief as this Court may deem just and proper. Dated: New York, New York May 26, 1978 BOWDITCH & DEWEY By /S/CHARLES DONELAN A Member of the Firm 311 Main Street Worcester, Mass. 01608 (617) 791-3511 Attorneys for Plaintiff OF COUNSEL: SOLIN & BREINDEL 530 Fifth Avenue New York, New York 10036 (212) 221-3760 =29< UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK [Caption Omitted In Printing] AMENDED ANSWER Defendants Actors' Equity Asso- ciation ("Equity") and Donald Grody ("Grody"), by their attorneys, Cohn, Glickstein, Lurie, Ostrin & Lubell, for their Amended Answer in this action state as follows: l. Deny each and every allegation contained in paragraph 1 of the Com- plaint, except admit that plaintiffs pur- port to bring this action as an action to remedy alleged violations of Section l and 2 of the Sherman Act (15 U.S.C. §§1 and 2) and that plaintiffs purport to in- voke the jurisdiction of this Court pur- suant to Section 16 of the Clayton Act (15 U.S.C. §26). =30- Be Deny each and every allegation contained in paragraph 2 except to state that defendants lack knowledge or infor- mation sufficient to form a belief as to those allegations which pertain to plain- tiffs' residence or location for the transaction of business within the Sou- thern District of New York or elsewhere. Ze Admit that in paragraph 3 of the Complaint, plaintiffs purport to de- fine what certain terms, as used in the Complaint, shall refer to, mean, or in- clude. ; 4. Deny knowledge or information sufficient to form a belief as to the al- legations in paragraph 4 of the Com- Pplaint, except admit that plaintiffs pur- port to be theatrical agents having a Place of business and doing business in the City, County and State of New York. oZje 5. Deny each and every allegation contained in paragraph 5 of the Com- plaint, and aver that Equity has at all relevant times been an unincorporated as- sociation functioning as a labor union on behalf of its members; that Equity cur- rently has its principal place of bus- iness at 1500 Broadway, New York, New York; that since at least 1940, most per- sons who have regularly performed in leg- itimate theatre productions in the United States have been or become members of Equity; and that most producers have been parties to collective bargaining agree- ments with Equity. Defendants lack know- ledge or information sufficient to form a belief as to the allegation that each plaintiff has a substantial number of clients who are members of Equity and who have performed in legitimate theatre pro- ductions. 6. Deny each and every allegation contained in paragraph 6 of the Com- plaint, except admit that Grody resides in the State of New York, and aver that Grody is Executive Secretary of Equity and resides inthe City of New Rochelle, in the County of Westchester. Ve Deny each and every allegation contained in paragraph 7 of the Com- plaint, except admit that the Theatrical Artists Representatives Association, Inc. ("TARA") is, and at all pertinent times has been, an association of theatrical agents. 8. Deny knowledge or information sufficient to form a belief as to the al- legations contained in paragraph 8 of the Complaint, except admit that legitimate theatrical performances are presented on and off Broadway in New York City, and that live theatrical performances have =33- been presented by summer stock groups and dinner theatres, that some persons travel over State lines to see legitimate thea- trical productions, and that some actors travel over State lines to perform in leg- itimate theatrical productions. 9. Deny each and every allegation contained in paragraph 9 of the Complaint except admit that since at least 1960, Equity has entered into collective bar- gaining agreements with all of the asso- ciations enumerated in paragraph 9. 10. Deny each and every allegation contained in paragraph 10 of the Com- plaint except admit that Equity's col- lective bargaining agreements with the associations of producers listed in para- graph 10 of the Complaint require pro- ducers, with some exceptions, to employ actors who are or become Equity members and have contained the language quoted in =34- paragraph 10B, and aver that said lan- guage has never been interpreted or enforced by Equity to prohibit producers from dealing with non-franchised agents. ll. Deny knowledge or information sufficient to form a belief as to the al- legations contained in paragraph ll of the Complaint. 12. Deny knowledge or information sufficient to form a belief as to the al- legations contained in paragraph 12 of the Complaint. 13. Deny each and every allegation contained in paragraph 13 of the Conm- plaint, except admit many persons re- gularly employed in legitimate theatre productions throughcut the United States are members of Equity. 14. Deny each and every allegation contained in paragraph 14 of the Con- plaint, except aver that Equity, like all = 35- labor unions, has rules governing the conduct of its members, and that Equity enforces these rules by internal discip- linary procedures. 15. Deny each and every allegation contained in paragraph 15 of the Com- plaint, except admit that Equity has rules and franchise agreements governing some of the terms and conditions pursuant to which a franchised agent can represent a member, including the maximum commis- sions chargeable, and that Equity's rules prohibit members from employing non-fran- chised agents, and aver that these rules and franchise agreements were created and operate to protect Equity members from exploitation and to prevent their neg- otiated minimum wages and working con- ditions from being invaded or destroyed, and further aver that rules and franchis- ing agreements pertaining to theatrical -36- agents were first promulgated by Equity in 1928. 16. Deny each and every allegation contained in paragraph 16 of the Com- plaint, except admit that Equity pro- mulgated Rule A in 1958 following dis- cussions with TARA, and admit that the terms of Rule A are incorporated by refer- ence into Equity's standard form fran- chise agreement for theatrical agents. 17. Deny each and every allegation contained in paragraph 17 of the Com- plaint, aver the Rule A contains pro- visions similar to some of the provisions alleged in paragraph 17, and refer to Rule A (attached to Donelan's affidavit in support of plaintiffs' motion for prelim- inary injunction) for the precise terms and provisions thereof. 18. Deny each and every allegation contained in paragraph 18 of the Com- plaint. =37= 19. Deny each and every allegation contained in paragraph 19 of the Com- plaint, except admit that plaintiffs re- signed their Equity franchises in 1977, and deny knowledge or information suffic- ient to form a belief as to the plain- tiffs' motives or intentions for their resignations. 20. Deny each and every allegation contained in paragraph 20 of the Com- plaint except admit that on December 27, 1977, Harriet Slaughter, then Assistant Executive Secretary of Equity, sent a letter containing the language quoted in paragraph 20 of the Complaint to some managers. 21. Deny each and every allegation in paragraph 21 of the Complaint, except admit that Harriet Siaughter sent a let- ter, dated June 20, 1977, containing inter alia, an instruction to Equity mem = 38- bers to withhold commissions from agents unless the agent and actor have executed and filed with Equity an Agency Author- ization or Exclusive Management Contract, and admit that the standard Production Contract which producers are required to file with Equity contains a place for identification of the agent of record. 22. Deny each and every allegation contained in paragraphs 23, 24, 25, 26, 27, 28, 29, 30 and 31 of the Complaint. AS AND FOR A FIRST AFFIRMATIVE DEFENSE 23. The Complaint fails to state a Claim upon which relief may be granted. AS AND FOR A SECOND AFFIMATIVE DEFENSE 24. The activities and operations of theatrical agents, including the com- -39- missions charged by them, have had and continue to have a direct and substantial effect on the minimum wage scales and working conditions negotiated by Equity on behalf of its members. 25. Theatrical agents representing Equity members are in an economic inter- relationship with Equity's members af- fecting Equity's legitimate union inter- est in the wages and working conditions of its members. 26. Equity's agency franchising system was established and is maintained by Equity to regulate the relationship between agent and actor, in order to in- Sure that agents render competent and ethical representation which does not undermine the minimum wages and con- ditions negotiated by Equity. 27. By reason of the foregoing, Equity's conduct in maintaining its -40- agency franchising system is immune from the federal antitrust laws pursuant to the labor exemption of §§6 and 20 of the Clayton Act (15 U.S.C. §17, 29 U.S.C. &52), and the Norris-LaGuardia Act (29 U.S.C. §§101-115). AS AND FOR A THIRD AFFIRMATIVE DEFENSE 28. Repeat and reallege the alleg- ations contained in paragraphs 24 through 26, inclusive, of this Answer as if set forth in full herein. 29. Equity's agency franchising re- gulations and its enforcement thereof are intimately related to the wages and work- ing conditions of Equity's members. 30. Equity's agency franchising re- gulations and its enforcement thereof do not have a potential for restraining com- petition in the market alleged in the Com- o4l- plaint or any other alleged business mar- ket in ways that would not follow natur- ally from elimination of competition over wages and working conditions. 31. Equity's agency franchising re- gulations and its enforcement thereof do not give Equity control over the market alleged in the Complaint or any other al- leged market beyond that necessary to further Equity's legitimate interest in maintaining the wages and protecting the working conditions of its members. 32. By reason of the foregoing, Equity's conduct in maintaining its agency franchising system is immune from the antitrust laws pursuant to the non- statutory labor exemption. AS AND FOR A FOURTH AFFIRMATIVE DEFENSE 33. Repeat and realleges the alleg- ations contained in paragraphs 24 through ~42- 26, and 29 through 31, inclusive, of this Answer. 34. Equity's franchising system is based on reasonable and legitimate bus- iness concerns and, under all the circum- stances, does not impose an unreasonable restraint on competition in violation of the antitrust laws. AS AND FOR A FIFTH AFFIRMATIVE DEFENSE 35. Plaintiffs are formerly fran- chised agents who had notice of and operated within Equity's franchising sys- tem for many years and nevertheless re- frained from commencing this action until May 26, 1978. 36. By reason of the foregoing, plaintiffs are barred by laches from the relief sought in their Complaint. ~-43- AS AND FOR A SIXTH AFFIRMATIVE DEFENSE 37. Repeat and reallege the alleg- ations contained in paragraph 34 of this Amended Answer as if set forth in full herein. 38. Plaintiffs were formerly mem- bers of TARA, which participated fully in the formulation of Rule A and its revis- ions. 39. Upon information and belief, each of the plaintiffs has participated since the commencement of his/her member- ship in TARA in the activities and ‘in- volvement of TARA in connection with the formulation, revisions, and support of Rule A. 40. By reason of the foregoing, plaintiffs are estopped and barred from complaining of the agency franchising system embodied in Rule A. ~~ AS AND FOR A SEVENTH AFFIRMATIVE DEFENSE 41. The conduct complained of in the Complaint is the subject of unfair labor practice charges under the National Labor Relations Act, 29 U.S.C. §§151 et. seq. 42. By reason of the foregoing, the exclusive jurisdication of the National Labor Relations Board pre-empts and bars the granting of the relief sought in the Complaint. AS AND FOR A EIGHTH AFFIRMATIVE DEFENSE 43. Plaintiffs themselves have com- bined and conspired to fix the commis- sions which they charge to Equity mem- bers, in violation of Section 1 of the Sherman Act. 44. By reason of the foregoing, plaintiffs are barred by the doctrine of unclean hands from the relief sought in their complaint. WHEREFORE, defendants demand judg- ment dismissing the Complaint herein and for such other and further relief as this Court deems just and proper, including the costs and disbrusements of this action. Dated: New York, New York October 19, 1978 Yours, etc., COHN, GLICKSTEIN, LURIE, OSTRIN & LUBELL Attorneys for Defendants Office & P.O. Address 1370 Avenue of the Americas New York, New York 10019 212 (757-4000) By: /s/Mary K. O'Melveny A Member of the Firm o46- STIPULATED FACTS PORTION OF THE JOINT PRETRIAL ORDER FILED IN THE DISTRICT COURT The parties Stipulate to the truth and accuracy of the following facts for the purposes of this action only. All ob- jections to admissibility of these facts are reserved for trial. | AEA is a labor organization re- presenting actors in the legitimate theatre field throughout the United States. It has approximately 23,000 mem- bers. Donald Grody is Executive Secre- tary, the chief executive officer of ABA. AEA is governed by a Council, consisting of councillors elected by the membership. 26 AEA is the traditional theatre actors’ union. Virtually all major New York producers, and most other major theatrical producers throughout the United States, have collective bargaining agreement with AEA. | Ze AEA negotiates collective bar- gaining agreements with theatrical pro- ducers, who are the employers of AEA members. No agent participates in these negotiations. 4. These collective bargaining agreements prescribe minimum working con- ditions and salaries for members of the bargaining units represented by AEA. S. Theatrical agents are independ- ent contractors who, inter alia, nego- tiate contracts and solicit employment for their actor-clients. 6. Agents who operate in New York City are required to be licensed as em- ployment agencies and regulated by the Department of Consumer Affairs of New York City pursuant to Article 1l of the General Business Law of the State of New York, which, inter alia, sets the maximum commissions employment agencies may -48- charge and has specific provisions deal- ing with theatrical agents. Te Most or all plaintiffs are em- >loyment agencies licensed by the Depart- ment of Consumer Affairs of New York City pursuant to Article 11 of the General Bus- iness Law. 8. In 1928 AEA unilaterally estab- lished a licensing system for the regu- lation of agents. 9. Licensed agents were required, inter alia, to abide by a schedule of com- missions established by AEA and to abide by other rules. 10. Since 1928, AEA members were required to deal only with agents who were licensed by AEA and were subject to dis- cipline by AEA for dealing with agents who were not licensed. ll. From 1928 to the present, AEA's agency regulation system has contained =~ 490 the same elements referred to in para- graphs 8, 9 and 10. 12. In the 1950's, the majority of agents franchised by AEA were members of TARA, a trade association of agents work- ing in the legitimate theatre field. 13. Holding an AEA franchise was condition of membership in TARA. 14. Membership in TARA was not a condition to obtaining an AEA franchise. 15. Prior to 1958, AEA’ granted three types of franchises: Personal Re- presentatives' Permits; Special Repre- sentatives' Petnite; and Employment Re- presentatives' Permits. An agent could apply for one or more permits, and the minimum terms and conditions of his re- lationship with his actor/clients, in- cluding the maximum commission which could be charged, depended on the per- mit(s) held as well as type and terms of -50- the employment contract negotiated with the producer. 16. In the 1950's discussions were held between AEA and TARA for the purpose of modifying the agency franchising sys- tem. As a result of the discussions, agency regulations known as "Rule A," ef- fective June 4, 1958, were promulgated. 17. AEA required TARA members and other agents seeking to represent AEA members to become franchised by AEA, un- der Rule A. 18. The stated purpose of Rule A was "to regulate the dealings of its [AEA's] members with agents and artists’ managers relating to employment and pro- fessional careers of actors in the leg- itimate theatre industry." Rule A pro- vided, inter alia: A. the maximum commission rates agents could charge members, the =Slx duties of the agents to AEA members, and the terms and conditions of con- tracts between agents and AEA mem- bers. Maximum commission rates, varied in accordance with the type of agency contract, the type of em- ployment contract, and the terms of the employment contract. Some com- missions were permitted on minimum salaries, not exceeding 5% of earn- ings for the first ten weeks; B. Only agents franchised by AEA were permitted to represent its actor-members; Cc. the existing permits of the three types referred to in paragraph 15 were terminated and ae single franchise substituted; D. an actor and agent could enter into one of three types of agency contracts: the Special Management -52- Contract; the Agency Authorization; and the Exclusive Management Con- tract. The Exclusive Management Contract, which had no analogue prior to Rule A, permitted an actor to terminate it if the agent did not obtain for him a specified amount of employment within specified time limits; E. an actor could negotiate with an agent terms which were more, but no less, favorable to the actor than those contained in Rule A; F. all agency contracts were re- quired to be in writing with a copy filed with Equity; G. a contract not in writing or properly executed could be voided at the option of the actor, and the agent had no right to commission un- der such voided contract; =@§ 3= H. an actor had the right to term- inate an agency contract where the persons who were active in the agency when he signed his agency contract ceased to be active; I. limitations on commissions were not to be avoided or evaded by any device or arrangement for payment to the agent of additional compen- sation; J. an agent working on behalf of an employer (e.g., as a casting director) could not collect commis- sions from actors the agent placed while acting on behalf of the em- ployer; K. an agent working with a corres- pondent agent was not permitted to charge more than a single commis- sion; oShe L. AEA agreed to grant new fran- chises to TARA members and other previously franchised agents, under the terms and conditions of Rule A; M. applications for franchises by applicants who were not previously franchised were required to be ac- companied by letters of reference from five AEA members in good stand- ing. AEA's Council considered re- commendations of the Agency Commit- tee and made the final decision with respect to the granting of a fran- chise; N. when AEA refused to grant a franchise, the applicant had re- course to arbitration; O. franchised agents were required to pay initial and annual franchise fees to AEA; -55- P. agents were required to comply with certain provisions relating to ownership and control (e.g., pro- hibiting producers from owning a controlling interest in the agent); Q. franchised agents were pro- hibited from dealiiy with producers on the defaulting managers' list of AEA, i.@. prouccers Or managers whom AEA contends owe money to actors from a prior production; R. AEA could waive compliance of its franchsing requirements’ for agents and such a waiver unless otherwise stated was irrevocable; S. an attorney who performed ser- vices for a member of AEA was not deemed to be an agent unless’ such services included solicitation of employment in the legitimate theatre for the members, or the attorney ~-56= held himself out as an agent or en- gaged generally in the business of an agent; T . disputes under Rule A between actor and agent(s), agent and AEA, Or TARA and AEA were to be resolved by tri-partite arbitration under the auspices of the American Arbitration Association, where settlement at- tempts failed. Commissions subject to conflicting claims by two or more agents were required to be placed in escrow with AEA pending resolution of the dispute; U. Equity could invoke discip- linary proceedings against agents which could result in franchise re- vocation or suspension, assessment of liquidated damages up to $5,000, and forfeiture of commissions; =} V. Rule A was to remain in force at least until June 4, 1963, and there- after until "terminated" by either TARA or AEA following six months prior written notice; Ww. following termination of Rule A, agency contracts between a for- merly franchised agent and an actor were to remain in force and the agent was to be deemed to be franchised with respect to such agency con- tracts only. 19. The relationship between actor and agent was set out in Rule A and in the standard form agency contracts issued by 20. AEA's by-laws subject an AEA member who deals with a non-franchised agent to discipline including fines, sus- pension or expulsion from AEA. 77 21. In about 1974, there was a ser- ies of meetings between TARA, AEA, and The League of New York Theatres, a trade asso- ciation representing major New York City theatrical producers. 22. By letter dated March 25, 1975, from TARA President Robert Lantz to Grody, TARA requested discussions for the purpose of modifying Rule A and specif- ically, increasing maximum commissions. 23. In or about 1975, TARA and AEA commenced discussions with respect to modifications of Rule A. 24. During the discussions’ TARA gave six months' notice to "terminate" Rule A. The termination date was extended several times by mutual consent of TARA and AEA. 25. During the discussions, AEA submitted to TARA proposals which would have increased some commissions collect- -59- able by agents, although it did not meet TARA's demand for 10% "from the first dollar" - i.e. 10% on all monies earned, regardless of whether the actor's salary exceeded minimum. 26. During the discussions, AEA agreed to TARA's request that as part of any new agreement, AEA would enforce the provisions of Rule A prohibiting non- franchised agents from representing AEA members and AEA agreed. 27. The discussions were unsuc- cessful and on January 6, 1977 TARA term- inated Rule A. 28. As a result, most or all TARA agents and some other agents were then un- franchised and were permitted to repre- sent AEA members only under pre-existing agency contracts. 29. Many of the plaintiffs were members of TARA. -60- 30. Rule A remained in effect for those agents who agreed to abide by it, and such agents were permitted to repre- sent AEA members for all purposes. 31. On or about May 2, 1977, seven agents, including five who are plaintiffs herein, filed a lawsuit in the Federal District Court for the Southern District of New York, challenging AEA's agency franchising system under the anti-trust laws (Hidden, et al. v. Actors' Equity Association, et al., 77 Civ. 2624, (J.M.C.)). The complaint in that action requested a permanent injunction pro- hibiting AEA from enforcing the agency franchising system. 32. The lawsuit was initiated and financed by TARA, which solicited contri- butions from agents for this purpose. 33. Discussions between AEA _ and TARA continued while the lawsuit was pending. -6l1- 34. The lawsuit was withdrawn with- out prejudice in or about August, 1977. 35. NATR, is a trade association of agents who represent actors in the leg- itimate theatre and other fields. NATR was in existence prior to August 1977. 36. All plaintiffs herein are NATR members. 37. By letter dated August 31, 1977, plaintiffs (with the exception of STE Representation Ltd. which is still a TARA member) advised AEA that they wished to be represented by NATR and that they "had resigned from TARA because they can- not in good conscience accept the terms and proposals being negotiated by Equity and TARA." 38. In or about October 1977, AEA and TARA agreed to new Equity Agency Re- gulations and many of the agents who were franchised prior to January 6, 1977 be- came refranchised by AEA. -62- 39. The Equity Agency Regulations, inter alia, revised the schedule which regulated the commissions which fran- chised agents could charge and increased the franchise fees payable to AEA by agents. 40. With the exception of H.A. Artists & Associates, Inc., all or most plaintiffs have remained unfranchised since January 6, 1977. 41. Following the January 1977 termination of Rule A by TARA, AEA has communicated to actors, agents and pro- ducers concerning the "dispute" over the agency regulations. 42. In January 1977, AEA notified actors, agents and producers of TARA's termination of Rule A, 43. Since January 1977, AEA has ad- vised its members and producers of dis- Cipline which could result to its members from dealing with non-franchised agents. -63- 44. In letters to producers, AEA has quoted the following paragraph [2(A) ] which has appeared for many years in the printed collective bargaining agreements between AEA and various producer groups: "The producer has notice that if the negotiation for, or the obtaining of, this contract by the Actor is through any employment agent or personal repre- sentat've not holding a permit from Equity, or one whose permit is not in good standing, he is not Only breaching the rules of Equity in employing the Actor under such condition ° but is doing so with the knowledge that the Actor himself is liable for sus- pension or other discip- linary action by Equity and that he may thus be deprived of the Actor's services in this company." 45. By letter of December 27, 1977, AEA advised producers of the identify of non-franchised agents and stated: "None of these agents [on the enclosed list] may re- present Actors' Equity members except under cer- -64- tain special circum- stances. We urge you, therefore, to contact the Equity office if any of the agents on the attached list are identified as the agent of record to any of your employees. We seek your cooperation in up- holding your obligation to the Collective Bargaining Agreement in this regard." 46. AEA advised its members that they were not obligated under Rule A to pay commissions for jobs obtained by agents with whom they did not have signed AEA agency contracts. 47. By letter dated June 20, 1977, AEA advised its members: "Up until this time Equity has advised all unsigned actors they are not ob- ligated to pay commis- sions. As of June 15th you are instructed not to pay commissions." 48. Prior to the fall of 1977, the standard from individual employment con- tracts used under the "Production Con- tract" (the collective bargaining agree- -65- ment covering major Broadway plays) did not provide for the identification of the member's agent, if any, although some of the Union's other standard form employ- ment contracts had long contained a place for identification of the agent of re- cord, if any. 49. In late 1977 AEA issued a re- vised standard form individual employment contract for us2® under the Production Contract. Among other changes, it in- cluded a place for identification of the actor's agent of record, if any. By let- ter dated March 16, 1978, AEA wrote to producers in connection with the new forms: "Dear Producers: Please be advised that the new employment contracts for the Pro- duction contract are now available at the Equity office. We hope you are -66- now using these new con- tract forms. * * * May we call your at- tention to several changes in regard to these new contracts: * * * (d) A new line has been added for the agent of re- cord. In this regard, may we remind you of your ob- ligation under Rule 2(A), Agents, ‘Permit Holding,' under the Agreement Gov- erning Employment’ under the Production Con- tract..." 50. By letter dated June 27, 1978, AEA wrote to producers: ",..none of you is obliged under our contract to in- Clude the agent's name. We believe, however, that the inclusion of the agent's name is a valuable piece of information to appear on the contract, assists us in implementing Our Agency Regulations and forecloses subsequent dis- putes between actors and agents. We therefore earnestly solicit that you will continue to include the name of the agent if @€7= in fact an agent has re- presented our member. Naturally, whether you do or do not is entirely up to you." 51. By letter dated June 30, 1978, AEA wrote to producers: "As you know, we have a provision in our Col- lective Bargaining Agree- ment, Rule 2(A), =which deals with Equity's rules in connection with agents. As written, the Rule con- tains certain ambiguities. I am sure you are aware that it has never been our intention, nor have we ever tried, to impose what appears to be an oblig- ation on- producers’ bo adhere to our Agency Reg- ulations. Therefore we propose that Rule 2(A) be modified to accord with Our practices and to read as follows: The producer has notice that if the negotiations for, or the obtaining of this contract by the Actor is through ‘any employment agent or personal repre- sentative not holding a permit from Equity, or one whose permit is not in good standing, the Actor is liable to suspension or -68- other disciplinary ac- tion." 52. Upon learning that an AEA mem- ber has been represented by an agent with whom the member does not have on file with AEA an agency authorization or management contract, AEA has sent the following form letter to the member, with a copy to the agent: "An employment ' contract has been received by Actors' Equity which names the above agent as_ the agent of record. re is imperative that you ex- ecute and file with Equity an Agency Authorization or Exclusive Management Con- tract in order to be va- lidly represented by a franchised agent. The or- - iginal agreement should be kept by you, a copy should be filed with Equity at once, and the third copy should be filed with the agent. Any agent who seeks to re- present you without sign- ing the proper contract could result in discip- linary action being taken against you, -69- Some agents have refused to abide by Equity's Rules and Regulations Gonverning Agents and are operating outside out agency rules. It is important to protect the principal behind Eguity's agency franchise system. Therefore, a pro- per agency contract must he in effect in order for Equity to properly admin- ister the agency agreement between actors and agents." 53. By letter dated March 6, 1979, AEA advised its members: "It is an unfortunate fact of life that since January 6, 1977, the rules con- cerning the franchising of . Agents and the represent- ation of members by duly- franchised Agents have been muddied. Following Our national referendum in March 1977, the group re- presenting the largest number of Equity fran- chised Agents, Theatrical Artists' Representatives Association (TARA), agreed in October of 1977 to ad- here to the regulations promulgated by Equity. It is understandable that a period of confusion fol- lowed, during which time Equity attempted to oFQa Clarify the new rules to Agents, as well as to our Own members. The sit- uation is further com- plicated by the emergence of a new group purporting to represent agents, the National Association of Talent Representatives (NATR). This group com- menced a civil court ac- tion in the Federal Dis- trict Court in May of 1978 in an effort to enjoin Equity from enforcing its Agency regulations. That suit is pending and we have every reason to be- lieve that we will pre- vail. Unfortunately, our suc- cessful defense will not require the 23 NATR Agents to adhere to our. regu- lations governing Agents. That can be accomplished in only one way, through Equity members themselves. If the Equity Agency Reg- ulations are to be mean- ingful, if the understand- ings we have reached with TARA are to have full force and effect, and if all Equity members are to be bound and protected by the rules, then we cannot permit any Equity member to violate the rules when it is to his own personal advantage. oF de Consequently, THE EQUITY COUNCIL HAS RESOLVED THAT, EFFECTIVE MONDAY, APRIL 2, 1979, EQUITY WILL STRONGLY ENFORCE ITS RULE THAT MEM- BERS CANNOT SEEK OR ACCEPT REPRESENATATION BY NON- FRANCHISED AGENTS. This means that you are pro- hibited from dealing with non-franchised Agents in any of the following ways: 1. You may not sign a contract with a non-franchised Agent’ or enter into an oral under- standing; 2° You may not be submitted for roles by a non-franchised Agent; 36 You may not per- mit a non-franchised Agent to negotiate a salary or any other contractual pro- visions (@.8es billing) for you; 4. You may not pay commissions to a non-fran- chised Agent. Upon consideration of this matter, the Council in- dicated that violators would be subject to very substantial fines as well as possible suspension and expulsion from the Union. The Council discussion ~~) 54. noted that fines in the vicinity $1000 would not be inappropriate. This action has had to be taken because no other course is open to the Union." By Letter dated May 8, 1979 AEA advised Lee Meredith, an AEA member: 55. "We are in receipt of in- formation which indicates that you are in violation of the long-standing Equity Rule prohibiting members from dealing with agents who are not fran- chised by Equity for work in legitimate theatre. As you may be aware, our Agency Franchising system has been in effect since 1929. In order to protect our membership at large, we are compelled to initiate disciplinary procedures against members, like yourself, who choose to disregard this rule." Some franchised agents are bers of TARA. 56. Some plaintiffs compete members of TARA. ko mem- with 57. Plaintiffs have obtained AEA jobs for AEA members in New York, New Jer- sey, Pennsylvania, Connecticut, Cali- fornia and other states. 58. Franchise fees received by AEA are deposited in its general funds. 59. AFTRA and SAG, unions’ repre- senting actors in the radio, television, and screen areas, both regulate talent agents. Most or all of the plaintiffs are franchised by both AFTRA and SAG. Many actors are members of AEA, SAG and AFTRA. 60. AFTRA prohibits commissions on scale. SAG prohibits commission on scale unless the membership votes, in local re- ferendum, to permit it. The New York SAG local, allows agents to charge commis- sions on scale. 61. The agents' licensing agreement which is part of Defendants' Exhibit JX in American Federation of Musicians v. Car- oTFéie roll, 241 F.Supp. 865 (S.D.N.Y.) is ex- hibit Q to defendants' list of exhibits. o7S— TRIAL TESTIMONY OF THELMA RAIDER IN THE DISTRICT COURT * * * {[65]Q Does Talent Representatives have employees? A Yes, it has. We have a secretary and a subagent. Q And yourself? A Myself and my partner. Q How many people who conduct agency services as such? A Three. Q Their names, besides yours? A Steven Kaplan, my partner, Ruth Leh- ner, our subagent. Q Is Talent Representatives -- is your talent agency, Talent Representa- tives, licensed by the State of New York? A It is. “7 [74]A The thread was lost. However, I must say that it is the actors that I re- present and the actresses who have told me that this is the kind of representa- tion they want. As you develop their career, you are doing more than just getting them a job, negotiating a contract. You are trying to develop an ongoing thing with them. You are trying to create a sense of con- fidence in that actor. You are trying to guide him in what is best for him to do to achieve the career he wants. You are going to counsel him and you just cannot break that from one Union jurisdiction to another. It is -- the agent becomes a mother, a father, a [75] confidant, a sister, everything to that actor, if there is a good relationship between that agent and that actor. = | Q In effectuating this representation of actors, what exactly do you do, direc- ting your attention first to the attempt to find employment, what does an agent actually do, what actions does he take? A Well, of course, the first action upon meeting an actor that wants you to represent him or you think you would like to represent, is to try and introduce him to the people in the industry that are going to be helpful in furthering his Career. We do that -- I do that by numerous telephone calls by sending out mailings on that actor, including pictures and resumes, sometimes tapes. By arranging for the actor by ap- pointment to meet casting directors or producers, or people in the area where they can give him employment. I will entertain casting directors -78- Or producers or writers and say, "I would like you to have lunch with me and meet John Doe." I will go to dinner with these peop- le. I will attend for them a lot of off- Broadway shows, a lot of workshop pro- ductions, a lot of productions that are going on in lofts or garages, because if my actors are appearing [76] there I want to see them. If I see them, I want other people to see them. So it is just a constant thing. You do whatever it is you have to do, which is almost take up every area of the industry where this man or this woman is going to want to move ahead and do everything you can to make it easy for them to move ahead. * * x [84] Q What expenses does an agency have, a talent agency? = 7FQe A Well, of course the basic ones, our representation, our telechone, postage, messenger service. Those are very large expenses, and a secretary. If you are a big agency, I guess you have more than one, but we have one secretary. Then you have the expenses of the en- tertainment which is very necessary in this field. You have to entertain your clients because you cannot always have the kind of conversations they want to have with you in the office. The phone is ringing, other clients are walking in, and if they have a problem and they want your attention, is it out to dinner or out to lunch. Another major expense is the enter- tainment of the producers and casting dir- ectors which I have mentioned before. You must pay for that. It is part of getting yourself known, it is part of getting -80- your clients known. Then you must go to the showcase pro- ductions because that is the place you find new talent, and you must go to the off-Broadway productions because that is a place you find new talent. In addition, of course, you are going ts go to [85] Broadway productions be- cause not only may you find a new client there, but also you will have your own client appearing in these productions. And you have the transportation eapenses and you have the entertainment expenses of the tickets to these productions be- cause nobody gives these to you for no- thing. You have to pay for them. And I remember when we first went into business, our first year or I think it was our second year, for some reason, we were lucky enough to get a number of our clients into Broadway productions. a@i< But it was a bad year on Broadway. It seemed anything we got our clients in and they are primarily scale performers, be- Cause we're not a big agency. Elizabeth Taylor and Richard Burton do not need talent representatives. So we would have these performers in these productions, they would go through rehearsal period, the show would open, we would buy tickets, we would send a telegram to an actor, we would send flowers to an actress on opening night, we would meet them after the show, take them out for a drink or a dinner and the show would close the next week or the second week and one day I was very happy because a client I liked a great deal got her first break and was going into a show and I said to my partner, Steve, [86] "Steve, so-and-so is going into the show," and he said to me, "One more a@2e- Broadway show and we're bankrupt." Q All these things that you have told us about that you pay for, what income, how do you get your income as a talent agent? A Commissions. Q Just exactly what is a commission? A A commission is a percentage of the Salary that we negotiate for the actor. And that commission is regulated by New York State law. We can collect up to 10 percent. No more. * * * [88]Q Let's talk about commissions, Ms. Raider. You mentioned that New York State law has a ten percent limit. Are there other restrictions that you operated under when you were franchised by Equity? A Yes. Q What were they? A The major restriction we operated un- -83< der when we were franchised by Equity, was a rule that said we could not collect commission on minimu. Q Stop you right there. What is "mini- mum" ? A "Minimum" is the minimum wage a pro- ducer can pay to an actor ina production. Q Where is this found? A That is found in the collective bar- gaining agreement between the Union and the producers. Q an the case of a Broadway production, who is the producer organization that ne- gotiates the collective bargaining agree- ment with Equity? aA I believe it is the League of New York Theater Owners. Q Does that have a minimum scale wage in it? A Yes it does. Q And hew does that affect what you do? -84- [89J]A I can under no conditions, nor can any client of mine, work, have him work -- I can under no conditions have any client of mine work for less than that minimum wage. It is impossible. Q Why is it impossible? A Because the rule is made between the Union and the producer that the producer cannot pay him any less than that money. Q What do you call this regulation of the commission in Equity? A That is Rule A. Q Is that a written document? A Yes, it is. Q Does it have other provisions which govern what you, as an agent, may charge a member of Equity for your services? A Yes, it does. There are a number of restrictions. Rule A is a book of re- strictions on agents. Q In negotiating for a job for a client =§5< who is seeking a job that Equity produces, what are your objectives? A My objectives are always to get as much money as I possibly can for that actor. I do not negotiate for minimun. I don't want minimum, which is that bas- ic salary that the Union and the produc- ers have evolved. ([90] Number one, the more money I make for an actor, the more money I make and that allows me to keep my doors open. But very often, no matter how hard I try, especially with a beginning actor or one who has not achieved any sense of noto- riety, I cannot get above minimun. One of the reasons I can't get above minimum, is that there are so many actors in New York who are unemployed and who are anxious to work. That is very true. Pro- ducers know this. So my hands are pretty much tied if I =86=« have an actor who has no track record. When I say to the producer, "Well, I mean, you know, you just can't pay him $350. We have to have $450 or $500, and he wonderful and he is this," and the pro- ducer will say to me, "This is a scale job. Your actor doesn't want to do it, there are ten others who will." And I will say to my actor, "Look, no matter what I say or no matter how hard I try, this is a scale job. We can wait and try to get something better. I think you are worth more than scale." And I have put in all the time with the enter- taining and the messengers and going to see and counseling him on how to dress or how to cut his hair and he will say to me, "I don't care if it is scale, I want that job." And I say, "Fine." And I still [91] go in there and I still nego- tiate for the billing and I still try to -87- negotiate the best contract I can for him and when it is all over, I can collect nothing. Q You mentioned "billings." What did you mean by that? A "Billing" is where the actor's name appears on the program and on the house boards, the size of his name, the type, whether it is above -- with my clients it has never been above the title, but how large it is and all the areas where that actor's name is going to be shown that gives him again, standing. It proves he has been in a Broadway or off-Broadway production. It is very important. Q Is above the title better than below the title? A Yes, that is a star. Elizabeth Tay- lor is above the title. Q How many actors do you represent right now who normally are billed above the -88- title? A Normally, none. Q Are there other things which you ne- gotiate for? A Excuse me one second. You said "normally." I do have, I believe it was, two actors, but that is because they have a name and a reputation in television, not the [92] legitimate theater per se, but because they were in legitimate thea- ter productions they were billed above the title. Sixteen years I thought that was good. Q Are there other things that you seek in your negotiations for an actor from a producer? A Oh, well, you seek dressing rooms and you seek for transportation, and if it is a production that is out of town, you know, you question the housing. You seek out clauses, which is a clause in a con- -89- tract that will allow the actor out of a production should perhaps, sonebody from Hollywood see him and think he would be right for a series or a movie. You are also aware fre» the moment you get somebody into any kind of produc- tion that that is not the end of the car- eer. Your work begins when an actor gets into a production because that is the time he is visible. That is the time you can make other producers come and see him, other casting directors witness what he can do. . It is the time to build him up. It is the time to move him ahead. It is the time you do your hardest work. Q What is this "out clause" that you mention? A As I said, it is a clause in the con- tract that [93] allows your client to be released in a certain number of weeks' notice in order to do something else that -90- may further his career, or something else that he very much wants to do, even though it might not further the career. * * * [94]Q What services do you perform when that show is beginning and your client is out of town? A WelJ., hopefully, our services start while they are still in town, when the Client has been hired, and usually there is a rehearsal in New York. And you make sure each day or your cliente will call you each day, to let you know how things are going and to raise any questions that he might have about what his part was in this play, et cetera. [95] You counsel him constantly because it is a nervous time for a client when he is just starting out in a show. Then we have gotten through that time and the cli- ent goes out of town, and you will get a call long-distance, collect. And he will -9l- ws tell you that this has gone wrong or that has gone wrong and what can you do about it? So then you again get in touch with the producer or do all those things you have to do and he says "When are you com- ing out to see me?" And I usually try and say "Well, I very much want to see you. Do you need it this week or can you wait until maybe you come to Chicago?" Simply because maybe this week I have a kid graduating from school or something. And if it can be Chicago, I then fly out to Chicago and I see the production in Chicago, and then I fly back. They may have gone from Chicago to Atlanta and in Atlanta something has hap- pened that I have no control over and well maybe they have replaced another person in the cast and you get a phone call that -92- says, “Honey, I think you should come and see the show down here. I think it is a different show and I want you to really tell me what you think." Or while they are on the road, any number [96] of things happen. But what you are going constantly is you are in touch with your client. Your client calls you, your client writes to you and you must take care of every matt- er, sometimes even including his apart- ment. — I have even been asked to rent an apartment while a client is on the road and you do it because he is your client. Q Who pays for that plane ticket to Chi- cago and back? A I do. Q And who pays for all the phone calls? A I do. Q Do you ever hear from anyone other than the actor when he is on the road? -93- - Oh, yes. Q Who is that? A We sometimes hear from the producer. We sometimes hear from the director. Q Why would you hear from the producer? What is that problem? A Well, that can sometimes be there can be a misunderstanding or something going on on the stage or during the tryout and you get a call that says, "I think [97] you had better talk to your actor because this and this and this has happened and I think it would be a very good idea if you spoke to him. "But you had better do it if you want your actor to keep that job." Very often when you get a call from the actor and you have to call the produc~ er, you are in a very difficult position because that may be the very same produc~ er you are negotiating with on another show or for another client and here you are be- -94- coming the heavy. You are complaining, you are fighting for your client's rights, and this produc- er is just two hours from talking to you a~ bout some money on another one of your clients and if he gets angry enough, you get this feeling, "Well, who needs to deal with her? She is nothing but trouble." Q Again, dealing with Equity, is the rehearsal pay when the show is out of town that the actor receives, do you get any commission on that pay? A No, we do not. Q Do you have or have you on occasion, negotiated out of town expenses for an actor as part of his contract? A Yes. [98] Do you receive commissions on that? A No, we do not. Q Has it ever occurred that one of your actors, one of your clients, is dropped from a show while it is still out of town? -95- A. It has happened. Q How much he paid you in commission when he is dropped? A Nothing. Q Moving along in the cycle, is there a time when a show begins to show out of town when an actor has pay from which you are able to collect a commission? A If it is above scale I am able to collect. Q Would you explain exactly what you just said? A As we went back, if it is a client whose a new client and is only -- and only capable of earning scale as his wage and wants to do that production, even when the show opens and he is collecting full salary which is $500, I believe, $35 out of town now, we are not allowed to collect any money. And I think the thing that is so both- ersome to me, the reason I am here, is -96- that $535 or even $350 or $400, is not a minimum wage. I don't make that money at all. [99] THE COURT: What is not a minimum wage? THE WITNESS: $535 to my mind is not a minimum wage. Yet that is a minimum wage to an actor on the road. THE COURT: He has to get at least that under the Actors Equity contract you are saying? THE WITNESS: Yes. THE COURT: When he is on the road, he has to get $535? THE WITNESS: I believe it is 35. THE COURT: 535 a week? THE WITNESS: Yes. Q And for which under Equity rules, how much commission comes to you? A Nothing. THE COURT: Let me see if I understand this: That minimum has been set as a re~ sult of negotiation by Actors Equity with @97J=- the producers’ group, is that it? MR. DONELAN: Exactly, your Honor. THE COURT: Those minimums. What about the other conditions of em- ployment, have those also been set, mini- mum conditions of employment? MR. DONELAN: Yes, Your Honor. We have the collective bargaining agreements in the entire text here as plaintiffs' ex- hibits, and intend to have these identi- fied [100] so the Court will have them. But I think the Court has already in essence, gotten really all you need out of them, which is yes, all the terms and conditions right there in the collective bargaining agreement, and they have, by "they," the defendants have agreed in the stipulated facts, that no actor, no agent, no producer can diminish the minimums call- ed for in the collective bargaining agree- ment. THE COURT: I am talking about other -98- than the salary. These other minimum conditions have been negotiated by the union? MR. DONELAN: I am not sure which min- imum conditions you are talking about, your Honor. THE COURT: That is what I was getting at. In addition to a minimum salary which must be paid if you work in New York. MR. DONELAN: Yes, your Honor. THE COURT: It is 535 if you are on the road. * * * ([127]Q By "call the rule," does that mean you terminated their relationship with Equity? A I suppose on a general basis we term- inated our relationship with Equity and at that moment technically we were unfran- chised, or disenfranchised. Q Why did you take that decision? A Well, because it seemed -- it seemed =99- the situation was getting worse. I was being -- I felt -- forced out of business. I was being asked to work for nothing, and if I have to work for nothing I really can't keep my agency going. Q What do you mean "work for nothing"? A Well, the rules as they exist say that I cannot collect a commission on scale en- ployment and since I don't represent major stars or that many people that command over scale, no matter how hard I try to get it, the bulk of my clients who are beginners, who are people moving along in their car- eers, can't command more than scale, so basically if I wish to work in the Equity field, and it is important for me to work in the Equity field if I want to represent [128] clients totally, I must work for nothing. I must put in the time and the effort and the energy, the same amount or more than would go into somebody who is recognized, and not get anything in re- -100- turn, even when I get them a job. Q Were there other features of the Rule A which you objected to when you termi- nated your franchise in 1977? A Yes, indeed. Aside from working for . nothing, there is the one-year limit on a contract. If you get a new performer who comes to you for representation, you are only allowed to sign him or her for one year. In that one year you can really start the career going perhaps, at least you might make them known, but at the end of the year they have the right to break that contract with you and go to another agent. It may just be at the point where the career is going to break and you are out. The one year rule isn't fully a year rule either. It isn't a one year guaran- teed, because there is a 90 day clause under Rule A, and if you don't get a cl- ient work in 90 days where he is paid he -101- has the right to break his contract with you, too. Getting him work is literally getting him work. It doesn't matter how many au- ditions you've sent him [129] out on or what promotion you've done or the jobs he's failed to get, he actually must be paid. If he's not he can call the 90 day rule and your client is gone, if he so desires. Q Were there any other features of Rule A to which you objected? A Well, I object generally to having an outsider run my business. The union has a collective bargaining agreement with the producers that take care of their actors. I am employed by the actor. I mean, I don't work for the union and I don't work for the actor -- for the producer. I work for the actor. He comes to me for his services. He comes to me the way -102- he would come to an accountant, the way he would come to a lawyer or a dentist. He wants my services. I think he has that choice. Yet, it is an outside force that is telling me how I can deal with that act- or. It's not a one-to-one decision and I am not free, as any other businesswoman in the country is free, to run my busi- ness as I see fit under the laws of the country or the state. Q Mrs. Raider, did you say this at TARA meeting? A I sure did. ([130]Q Did there come a time when you became dissatisfied with the TARA negot- iators? A Yes. Q When was that? A I would say that was in, what, well, around 1977 going into '78. Q Who were these negotiators -103- you are discussing? A The same group that I mentioned be- fore -- may I go back? I also felt per- sonally that the TARA negotiating group was headed by Howard Hausman, who is a fine man, but Howard Hausman was not speak- ing for the smaller agents. Howard Hausman, I believed, was speak- ing for the large agencies. It's part of his job, I presume. When I say that the negotiating team, after having been told by the mer ership, the general membership, that we cc.ld no longer live under these rules, we had to get commission on scale, we had to make some headway with this union, Howard would go and we would hear there were private meetings and he would always come back and say, "Well, you can't do this and you can't do that, you can't do the third thing.” And I believe that you have to try. -104- So I became terribly pessimistic about my [131] chances of continuing in business and staying in a group where my views were not being expressed. I had to get out. It was a matter of principle. Q Did others get out at that time? A Yes, indeed. Q Who were they? A They were the smaller agents, some of the plaintiffs in this lawsuit, plus others. I really can't tell you how many got out. I know the ones that are members of NATR, but I do not know how many others could not stand it. + de * [133] Q Have you ever heard of a pink contract? Of A pink contract is a chorus contract. Q Was there anything about chorus con- tracts to which you objected when you were negotiating or talking about negotiating with Equity? -105- A It is not the chorus contract that I object to per se. What I object to is in Equity the pink contract, which appl- ies to chorus members, does not ordinari- ly affect me because I don't represent chorus members. Chorus members tradition- ally don't have agents because they do not pay commission and they go from show to show more or less on their own. A white contract is a principal con- tract and a principal contract is one in which you can negotiate for as much as you can get above minimum wage. Very often, if you are lucky, you will get [134] more than minimum wage for an actor. If an actor goes into a production on a white contract as a principal, Equity has the right unilaterally, by its own de- Cision, to say, "Well, now, that person really is not a principal role. It's -106- really a chorus part." And they can uni- laterally convert the white contract to the pink contract. Your actor keeps the negotiated amount of money. He gets the benefit of the dollars that you negotiated. He does not go back to minimum salary but you are not allowed to collect a commission on a pink contract. In one instance -- I'm going to go back about nine years -- I had a client in an industrial show, a show, a musical that was promoting automobiles, and it was tour- ing. As I remember -- I don't remember what the minimum was, but my client was well above the minimum and he was collecting $400 a week, which was very good money in those days. After the second week that the show was running, an Equity deputy saw the show and said my client was not a principal player, -107- he was a chorus player. They converted the contract to the pink contract, and I had [135] to return the money I had col- lected the week he had played as a princi- pal and could not collect any more -- it was an eight-week tour -- could not coll- ect another penny on that contract even though my client continued to receive well over minimum. That is why I object to the conversion of pink to white -- white to pink [136]Q Mrs. Raider, do you recall exactly when you resigned from TARA? A No. Not the exact date. MR. DONELAN: Plaintiff's Exhibit 67. Q Let me ask you if that document re- freshes your recollection, yes or no, as to when you resigned from TARA? (Pause. ) A August 31, 1977. Q August 31, 1977 Talent Representatives, your agency, resigned from TARA for the -108- reasons that you have just stated; is that correct? A That's correct. Q Were there others who resigned at that time? A Yes, many others. There is a list of agents there. Q After you resigned from TARA, what happened to your working every day with Equity members? A Well, after we resigned from TARA we started getting letters from Equity tell- ing us that we were no longer franchised agents, we could not represent their cl- ients, please be aware that our clients would be in violations of the rules, and so on and so forth. What happened was, there was a bar- rage of [137] threats. First, very mild. But they started to get stronger and stronger. We found, after we resigned from TARA, -109- that the most horrible thing that happen- ed was that we were put on a blacklist to producers. And since the most important thing we have going for us in this busi- ness are our reputations and our rapport with producers, this was an extraordinar- ily damaging thing. Your name appearing on a blacklist, be it valid or invalid, leads people to question, why are you there, you know, you must have done some- thing wrong. Our clients, indeed, were also shaken because here they have confidence in their agent and trust, and all of a sudden they are aware that their agent, whom they have liked and respected, again, is on a list. And it is damaging. It is damaging to your relationship with clients. It is damaging in the most insidious way, be- cause there is nothing you can say to a blacklist, except explain it; which takes a lot of time. And it's difficult -110- to explain something in this situation. Q These letters that you got, let's make sure we have the sequence correct on this record. Prior to the publication of this black- list [138] did you receive letters from Equity concerning your status as a non- franchised agent? A As I remember, we did not receive any letters from Equity until we resigned from TARA. Q After you resigned from TARA you re- ceived these letters that you have been talking about; is that right? A Yes. And also copies of letters to our clients. Not only letters directly to us, but letters to our clients. Q Who signed the letters to you, an agent from Equity? A I believe it was Harriet Slaughter. Q Who is Harriet Slaughter? -lll- A I don't know her exact title. I think she was assistant to Don Grody. Q Were these letters on the Equity letterhead? A Yes, they were. Q Did you see a copy of the blacklist letter? A Yes, I did. Q Was that on the Equity letterhead? A Yes, it was, as I remember. * * * [170]Q You stated on your direct exami- nation that there were three persons in your office who act as agents; is that right? A Correct Q How many of them work in the Equity field? A I work in the Equity field primarily; my partner Steve Kaplan has worked in the Equity field; Ruth Lehner does not. -112- Q In 1978 how many jobs did you obtain for clients in the Equity field, you or your agency? A I don't remember. Q Was it more than three? A I think possibly more. It might have been more like five. I'm not sure in "78, but I would say between three and five. Q Who were those actors? A I believe Tony Craig was one actor. I'm not sure of dates, there was -- Lanie Norton in Angel. Q So you did get the job for Lanie Nor- ton in Angel? A Yes. Q Were you paid commissions on it? [171]A Yes, I was. Q Did you negotiate over scale or scale for that role? A Over scale. Q How about Tony Craig? A Well over scale. -ll3- [172] Q You said there were approximately between three and five -- A If I remember the year. Barbara Ro- dell, possibly Donald May. I am reaily not sure of the year, Miss Bases. Q What job did you get for Barbara Ro- dell? A She did a production of Two For The Seesaw at the Fishkill Playhouse, with Donald May. Q Did you get those actors over scale? A Yes, I did. There was also Forrest Compton in Sleuth, again, Fishkill Play- house. Q Did you get him over scale? A Yes. Q Turning your attention to 1977, approximately how many jobs in the legi- timate theatre field did you obtain for your clients? A I don't remember. And I want to state clearly, some of these jobs may have been -114- '77; I'm not good on the years. Q Was it about the same number as in 1978? A I have a feeling that probably '77 was more. Q How about 1976? A I don't remember. Q Again, was it more or the same? [173] A. I don't remember. Q When was the last time you went to see a client in a legitimate theatre pro- dustion on the road, outside of New York? A The very last time was June or July of 1978. I believe it was Tony Craig at the Pocono Playhouse, doing Barefoot In The Park. Q When was the time before that? A Fishkill, New York; four or five trips to Fishkill for both Two For The Seesaw and Sleuth. Q When was that? A Well, I said I'm not sure. Probably -115- Q When was the time before that? A Oh, I don't remember. Q Were there any other times in 1977? A I can't pinpoint the year. I can't say. Q Which of your clients have you ne- gotiated only scale for in the Equity field? MR. DONELAN: I wonder if we could have any kind of time frame on that, your Honor. Q When was the last time you negotia- ted scale for a client in the Equity field? A Mel Cobb, in Semmelweis, a Kennedy Center production. [174]Q When was that? , A "78. Q When was the time before that? A I can't remember. I know that they exist, but I can't remember specifically when and who. -115a- Q When was tie last time you went to Chicago to see a client in a legitimate theatre production? A I haven't been to Chicago in years. Q How about Atlanta? A I have never been to Atlanta. * * * [180] Q Mrs. Raider, you stated that you have no written agreement between the act- ors you represent in the legitimate theat- re field and your agency with respect to the relationship between the actor and your agency since you have ceased abiding by the Equity regulation; is that correct? A Correct. Q Are you aware of Article 1l of the General Business Law of the State of New York? A I am aware of it, yes. Q Have you read it? A Not thoroughly, no. -116- Q When is the last time you read it, even not thoroughly? A Not thoroughly, when we were licensed and received all this information. Q This was in 1964? A 1964. Q Are you aware that the New York General Business Law requires you to have a con- tract with or [181] furnish a written statement to an actor for whom you obtain work, setting forth, among other things: the commissions which you charge? MR. DONELAN: Objection, your Honor. It calls for a legal conclusion. The sta- tute is for the Court to decide what it means. THE COURT: Let me hear the question, Mr. Reporter. (Question read.) THE COURT: The question is whether the witness is aware of that? MS. BASES: Yes, your Honor. -117- THE COURT: She can answer that. That doesn't call fora legal conclusion. Only ask the witness to tell us whether she is aware of it. A Yes, I am aware of it. Q What have you done to comply with this? A Well, the terms of the employment are clearly stated on the contract between the actor and the producer. Q What about the terms of the commissions which you charge? A The terms of the commissions which I charge have been discussed with the actor verbally and a record of the commission is kept on a card in my file in the [185) office. Q Is there anything you give sien leis at the time you are making your verbal agreement with him or her which states the commission you will charge for the employ- ment you procure for that actor? -118- A No, there is not. Q You stated on direct examination that after being signed to your agency for one year which is the maximum allowed by Act- ors Equity Association under its agency regulations, clients often will go to one of the giants; is that correct? A That is correct. Q Who are the giants you are referring to? A William Morris and ICM. Q When is the last time you had a client signed to you for whom you procured work in the equity field, who has at the termi- nation of an exclusive management contract between you and that client, gone to ICM or William Morris? A I have not had an exclusive management contract with Barbara Rodell. We have had an exclusive agreement, again, a shake-hands agreement, for almost 14 years. On the -119- basis of that agreement, at one point she decided to try another agent; did for a [183] year, and came back. And in Decem- ber of 1978 went and signed with William Morris. Q So this was not a one-year relation- ship you had with Barbara Rodell, it was a 14-year relationship? A Yes, it was. [184]Q And after 14 years she decided to go to William Morris? A Yes, and she's also decided to return to me. Q Then when is the last time you have lost a client to William Morris who had been signed to you and an exclusive basis for a year and for whom you had obtained work in the Fquity jurisdiction? A I think the last one was Dennis Allen, who appeared in "How To Survive An Election," off-Broadway, no commission, 19 -- perhaps -120- "68 or '69; again, not certain of the date. Went to William Morris. Q I believe you testified on direct ex- amination that your business, after the dissemination of what you describe as the blacklist, fell off, is that right? A Yes. Q And the blacklist was disseminated in -- or what you describe as the blacklist was disseminated on December 27, 1977, is that correct? A If that is the date, yes. Q Isn't it a fact that in both 1977 and 1978, when the effect of this alleged blacklist would have had its impact, that your agency did exactly the same amount of business in the Equity jurisdiction, name- ly, one per cent? A That could be true. [185]Q Did you not submit one response to requests for discovery, that figure to your counsel? -121- A I did in deed. That is just the top of the iceberg, though. I don't know the business I didn't get because of that black- list. MS. BASES: I would ask that that be struck as nonresponsive, your Honor. THE COURT: Yes. The question was "Was that the figure you submitted to your lawyer?" Q Was that the figure you submitted to your lawyer? A Yes. -122- TRIAL TESTIMONY OF HOWARD HAUSMAN IN THE DISTRICT COURT * * * [272] Q Yes. "- They wanted ten per cent commission on all engagement procured by agents through the run of those engage- ments. It was the main demand." Was that your testimony? A I presume so. I mean you are quot- ing it from -- Q Page 91 of your deposition. A Fine. If you press me to what I would consider to be the main economic demand, I'm sure that's right. Q I don't mean to press you, Mr. Haus- man, I'm just asking you for an honest answer as best you can recall it. A Really all my answers are honest, sir, to the best of my recollection. Q To the best of your recollection, was there a -123- main demand made by TARA during the nego- tiations with Equity? A It has certainly been the position of all agents throughout that agents should get paid for their services. Everyone in the agency business thinks they ought to get paid for their services. There was a period when we were ask- ing for [273] something more than 10 per cent but I think in the minds of most of us at least 10 per cent of whatever the actor earned would have been a satisfy- ing solution. We didn't arrive at that solution. We have been very happy with the result. Q And the ten per cent, that covered scale jobs? A It would have covered any employment procured by an agent for an actor, wheth- er it was for $20,000 a week or for scale. Q Were there a number of TARA agents who were particularly concerned about -124- getting ten per cent or any commission on scale jobs? A I would say all TARA agents were. All TARA agents were, yes, there were a num- ber, all. Q And William Morris itself was in favor of getting ten per cent across the board, including scale jobs, is that correct? A We were and we are. Q When TARA terminated Rule A in Jan- uary of 1977, were virtually all members of TARA united in their desire to obtain ten percent across the board? A I would say all were. * * * [281] We all consider that Equity's point of view was indefensible, outrageous, hor- rible, wrong, simply because they were ex- pecting agents to subsidize the lowest paid actors, somehow to work for them with- out any way of getting paid. -125- We still all feel that way. We accepted a deal under which that was im- posed on us. That is the way in which we accepted it. Q I believe you testified that you were unhappy with the final agreement between TARA and Equity? A That is what I just said. Q Specifically, what points are you un- happy about? A That's one. Q When you say "that's one," I'm not: sure what you mean by that? A The failure to be able to get commis- sion, at least 10 percent commission, from all the earnings of the client that you place when you place a client, whether that is at scale or at any rate. -126- TRIAL TESTIMONY OF DONALD GRODY IN THE DISTRICT COURT * * * [465]Q Mr. Grody, what was the situation which led to the formulation by Actors Equity of its agency regulation system ini- tially? A Well, the actor is a very vulner- able creature in respect of anybody who either employs him or who assists in get- ting him employment, and there were no re- gulations of any kind dealing with the activities of the middlemen, the agents. And so before there were any regu- lations, before Equity began to take action in the area, agents -- actors were fair game for agents; there were no restraints on what commission would be charged; there were no limitations on the arrangements that could be made which were inflexible insofar as the actor was concerned, and not very favorable to the actor. -127- Seeing a necessity for moving in and getting rid of some of the abuses which had been practiced on actors, extracting large sums of money from them, getting money paid in advance and so on, it be- came apparent to the governing body of the union that some arrangement, an ord- erly arrangement, was necessary in order to protect the actors in this particular area. * * * [468] THE COURT: I'd like to ask you a question which might clarify this for me. Do the producers deal only with agents or do they deal with anybody who might walk up to the door looking for a part? THE WITNESS: Obviously a producer can deal with anybody. There are, how- ever -- -128- THE COURT: The question is whe- ther they do as a matter of practice deal only with agents. Do you understand the differ- ence? THE WITNESS: Yes. Well, it's really hard to answer the question completely, your Honor, be- cause different producers have different practices. I would say mostly producers will with agents. The nature of the business requires that they deal with agents. There are -- THE COURT: That's what I was getting at, whether the industry as such, the way it has developed, that as a prac- tical matter producers seek employees through agents, or actors and actresses through agents; is that the way the indus- try operates? -129- THE WITNESS: It does, your Honor. * * * [614] Q Mr. Grody, when an Equity ob- tains a job with a producer who is a party to a collective bargaining agree- ment with Equity, the producer and the Equity actor into an individual contract: is that correct? A Correct. Q The producer is then required to pay directly to the actor the agreed upon wages set forth in that contract? A Correct. Q That is true even if the actor has an agent? A Not necessarily. Q Unless the actor consents in writing to payment to the agent, is the producer required to pay the actor directly? -130- [636]Q Mr. Grody, are you familiar with particular kinds of abuses that the agency regulations were designed to cor- rect, which have been committed by agents in the recent past? * * * [637] The specific situations that I can recall have to do with, for example, an agen*= on the West Coast, Ruth Webb, who, while she was representing our mem- bers as an agent, also acted as a packag- er of a play. [638] When we found out about that, we proceeded under the terms of the agency regulations and ultimately became involved in an arbitration where it was resolved that the agent, under the rules, had no right and, indeed, was prohibited -l13l- from collecting agency commissions at a time when she was acting as a packager of a play, and the order of the arbitra- tor required the agent to return to our members the commissions she had extrac- ted from then. That kind of situation has exis- ted for many years and I expect will con- tinue to exist, and therefore the prohi- bition against it is one of the necess- ary ingredients to any franchising sys- tem. Another situation occurred with an agent here in New York who was requir- ing our members, her signed clients, to use the services of a particular photo- grapher and to require that the head shots, which is a group of photographs that are put together, be prepared in a particular fashion. When we learned of this we com- -132- plained of the activity of the agent and suggested that if that activity were not stopped we would have to take away the franchise, and the agent complied with our requirement. Another specific situation occur- red in the case of Michael Hartik, who was a franchising agent who [639] tried to extract -- tried to get our members to sign agreements which called for a com- mission of 10 percent from the first dollar. When we learned of this, and had evidence of it, we brought it to the attention of Mr. Hartik and proceeded then to revoke his franchise. At that point he advised us that he had reconsidered and that he would abide by the Equity regulations and would not seek to sign members to a contract re- quiring a 10 percent commission, and we restored his franchise. -133- There was also a fairly recent Situation that occurred at the Meadow- brook Theatre, a dinner theatre in New Jersey, just across the bridge, where an agent acted as a casting director for a particular production at the Meadowbrook Theatre. Actually, it was a sub-agent of the agent who had been franchised, al- though the sub-agent also gets an Equity franchise as a sub-agent. What happened in that situation was the casting director, the agent, would not make submissions for that play -- would not cast anybody unless they agreed to become aligned with that par- ticular agency. So that on the one hand he would be -- the [640] agent was working for the employer in being his casting agent, and at the same time he sought to extract com- missions from our members for placing them -134- in the play. That is a prohibited activity under the Equity agency regulations and we advised the agent of that improper prac- tice and the agent, having -- I'm not sure whether he actually took the commissions and returned them or whether the practice was stopped immediately, and he said that he would not try to collect the agency commissions. THE COURT: He was a franchised agent? THE WITNESS: Yes. If he were not a franchised agent, your Honor, I don't know what action we could have tak- en against him. THE COURT: You are suggesting that franchised agents are prohibited from acting also as producers or agents of producers in another capacity other than recruitment? Is that in the regu- -135- lations? THE WITNESS: Yes, yes, your Honor. THE COURT: All right. Now I understand why we are bringing this out. MS. BASES: Just to clarify that: Q Is an agent totally prohibited from functioning as a casting director or is he regulated in some way if he [641] does act as a casting director? A The prohibition is not total. The regulation applies only in that instance when the agent acts as a casting direc- tor. For that period of time, or dur- ing that period when he is in fact in the employ of the producer, we do not permit him to extract an agency fee, since obviously he cannot properly repre- sent an actor if he is acting for the em- ployer. -136- ical THE COURT: All right. Q In connection with this incident, did the casting director inform the dir- ector indirectly of the availability of the actor, if you recall? A Well, what we have learned is that anybody who was not -=- who would not agree to be aligned with that particular agent, who was acting as a casting director, would not get a submission and, indeed, actors who were available for work were told by the agent acting as a casting director -- I'm sorry, the agent acting as a casting director told the producer or director of the play that certain actors were not available when in fact they were. * * * [642]Q What does Equity do with the franchise fees it collects from agents? * * * A The money that we collect from “l3/- the franchising system is deposited in general funds. Q What is it used for? A It is used for the administra- tion of the Equity agency regulations. Q What does the administration of the Equity agency regulations involve in terms of salaries and functions and costs to Equity? A Here in New York we have one per- son who is involved full-time in main- taining the agency files, in responding to innumerable telephone inquiries from producers, from agents, irom actors, con- cerning the status of one or the other. Producers constantly call up say- ing, who represents so-and-so actor, or agents will call up and say, is so-and-so actor represented. There are constant [643] inquiries. There are the usual vrovisions, -136- usual requirements of the individual en- ployment contract coming in with the name of an agent. That has to be checked again- st the file to see that there is in fact an agency contract on file for the member. The maintenance of all the records because they are so comprehensive. we have had to get -- this is in New York City -- a IBM machine called an OS-6, which is a word processing machine which costs us $685 a month, on which we are putting all the agency files, so that we will be able to provide a better service to producers, to agents, and to members who make inqui- ries about actors who have agents. Then there is, of course, the sal- ary of the one employee in New York which, with fringes, is probably around $15,000. We also have agency functions to be performed in Chicago, where we have an office, and in Los Angeles, where we have -139- an office. Indeed, the activity in Los Angeles because of film and television, is very substantial. The same kind of work is performed in those two offices. I would say -- oh, and in addition, of [644] course, when I was talking about New York City I talked about the one employee who was directly assigned to that problem, yes, the agency regulations. In addition, one of my colleagues, Guy Pace oversees the agency area and I an, of course, and have been for some time very much involved in the area. I would have to say in terms of our cost to us in running the, administer- ing the agency rule, the Equity agency re- gulations, I would think that the cost to us would have to be somewhere in the neigh- borhood of forty to fifty thousand dollars a year. -140- Q Do these costs exceed the intake from the franchise fees? A By far. Q Would these costs exceed the in- take from the franchise fees even if there were none of the duties associated with the current agency dispute that had to be done? A I would say definitely yes. * * * [661]Q During the negotiations with TARA, did TARA question the need for the increa- sed franchise fees that Equity had reques- ted? A No, I don't believe so. I think we explained [662] that the franchise fees had remained the same for almost twenty years, that is, the initial application, the franchise fee and the annual payment, and that we thought it was time to have an increase in the franchise fees. They did not seriously resist that. My impression -141- of the response was, if we can put every- thing in place, we will agree that there should be an increase in the franchise fees. -142- TRIAL TESTIMONY OF ROBERT FISHKO IN THE DISTRICT COURT * * * [665]Q Mr. Fishko, what is your occupa- tion? A Iam a theatrical manager and producer. Q Are you a member of the League of New York Theatres? A Yes. Q How long have you been a member of the League? A Since 1968. Q Approximately how many plays have you produced or been involved in in the production of? A Oh, a couple of hundred. Q Approximately how many actors have you hired during the course of your career as a producer? A About 1500. -143- Q Approximately what percentage of those acts were hired for principal roles in your productions through a theatrical agent? A Of the number of actors, more than half were engaged for principal roles. And of those, I would say 70 or 80 percent were hired through agents. [666]Q By principal roles, am I correct in understanding that a non-chorus role is considered a principal role? A Yes. * * * [667] Q Approximately how much time is spent with each actor who appears at that principal interview? A A minute or two. Q Is it fair to say that only a small percentage of actors are generally asked to come back for a reading? A A small percentage, yes. -144- [668]Q Do you frequently in the course of your work as a producer receive calls from agents ahout actors they are submit- ting for roles? A Yes, I do. Q And do you speak to those agents directly when they call you? A Frequently. Q Do you also get calls directly from actors and actresses? A Yes, I do. Q And do you generally speak to them? A. Sometimes. Not usually. Gen- erally if the call is directly from an actor who I don't know, they are invited to send a picture and resume in and I will look at it later. * * * [680]Q Have you been asked by agents to pay an actor more than the minimum or -145- scale salary in order that the agent can obtain a commission? A Yes. Q have you done so? A At times, yes. * * * [682]Q So one could have a principal role even though [683] his part by lay- man's standards would be a very small part in the production, is that right? A Oh, yes. Virtually any speaking part is a principal role. Q Any speaking part. * * * -~146- TRIAL TESTIMONY OF MARY LOUISE BRITTEN IN THE DISTRICT COURT * * * [709] Q What is your profession? A I'm an actress ~- singer. * * * [711] Q As a principal performer, do you need an agent? A Yes, I do. Q Why do you need an agent? A I need an agent to be able to audition for shows, because otherwise I couldn't get -- I couldn't be seen by the directors or producers. Q Have you tried to see producers without an agent? A Yes, I have. Q Have you ever been successful? A No. Q Have you gone to principal in- terviews? A I very rarely go, because I -147- think it's a waste of time. Q Why is it a waste of time? A So often you see a secretary or stage manager, and your picture winds up on a pile of other pictures, and you are never called. Q How do you get your work in the legitimate [712] theatre field? A I am submitted by an agent for an audition. You go and you audition. Sometimes you have a callback, and you get the job. Q Is the principal interview the same thing as A No. one who talks ence and what ted in as far that they are an audition? You are just seen by some- to you as to your experi- role you might be interes- as the show is concerned casting. Q Do you get a chance to show your talent at a principal interview? -~148- A They do not give you that much time. It could be anywhere from a minute to three minutes that they talk to you. * * * [715] Q Have any of them represented you in the legitimate field recently? Yes. Who? Marje Fields. How did it come about that Marje on Fr ODO PY Fields represented you in a legitimate theatre production? 7 A The end of January I was called by a Miss Dorothy Scott, who is a sub- agent in the Marje Fields office. Q What did she call you for? A To audition for a show called Blues In The Night. I had two auditions and I got the show. * * * [715(A)]Q How had you been submitted for -149- EO this show? A I had been submitted by Miss Dorothy Scott of Marje Fields Agency. [716] A TI had been submitted by Miss Dorothy Scott of Marje Fields Agency. Q Why? A I had been submitted because I was put on a list of people to stay by the producer, who was Sheldon Epps. Q Did Miss Scott negotiate your contract? A Yes, she did. What salary did you get? $250. Is that over scale? Yes, it was. Was that much over scale? Fr ODO FP OO FP DVD No, it was not. It was enough to pay the commission. * * * (724] Q Mrs. Britten, when you obtain a job at Equity, who pays you? How does the -150- pay work? Q The producer pays me. In what form? Is that a check? Can be a check or it can be cash. Who receives that check? The talent receives the check. You get the check? Right. And then if there is a commis- sion, you pay that yourself? A If there is a commission, it is my duty to pay the agent. * * * -15l- ‘ *- TRIAL TESTIMONY OF BARBARA LEA IN THE DISTRICT COURT * * * [749] Q Miss Lea, what is your profes- sion? A I'm an actress and singer. Q Are you a member of Actors Equity? A Yes. Q How long have you been a mem- ber? A About 17 or 18 years. Q Do you work in the legitimate theatre field? A Yes, I do. Q Do you do a lot of work in the legitimate theatre field? A Yes. That is my main field of activity. Q Have you worked in the legiti- mate theatre field without an agent? A Yes. -152- Q Have you worked in the legitimate theatre field [750] with an agent? A Yes. Q Are you currently signed on an exclusive basis with a theatrical agent? A Yes, I am. Q How long have you been so sign- ed? A Just about three years. Q Prior to being signed with this agent, were you signed with any other theatrical agent? A No. Q Did you work with any agents on a free-lance basis? A Well, a little bit, when I could get them to represent me. But I wien very successful in getting free-lance re- presentation. Q How did you try to get free-lance representation? -153= A Well, I sent pictures and re- sumes; I invited agents to performances that I would be giving in the New York area; and in fact, at one time, I believe it was early in 1976, I took the whole list of agents and started to go right down the list geographically to every single agent's office. I didn't get all the way through the list because I got in a good showcase at Equity Library [751] Theatre and had to stop for rehearsals. Q When you say you invited agents to your performances, did anybody request you to do that? A Yes. Sometimes on the rare - occasions when I was successful in get- ting to see an agent or someone in an agent's office, often they would say, let me know when you are doing something in town. Q And would you let them know when you were doing something in town? -154- Yes. Would they come? I didn't find that they did, no. on Fr OO PY How would you know whether they came or not? A There would always be a list of what agents had attended. Q You state that you have been signed to an agent for the last three years? A Yes. Q Is that an Equity franchised agent? A Yes. Q Has your relationship with your agent affected your ability to get work in the Equity jurisdiction? A Yes. Q How has it affected your abili- ty to get work? [752] A Well, I have gotten a lot more -155- auditions and auditions with a lot better people, rather, with a lot more important productions or producing organizations. Q When you say a lot more auditions, what kind of auditions have you gotten that you had not gotten prior to being repre- sented by an agent? A Several Broadway auditions, for the main thing. Q Had you attended principal in- terviews? | A Oh, yes. Yes, by the dozen. Q Did you ever get an audition from a principal interview? A Yes, I did, but for smaller summer stock companies and dinner theatre occas- ionally. Not ever for a Broadway, or I think off-Broadway production. Q Have you attended principal in- terviews for Broadway productions? A Yes, yes. -156- Q From the vears 1972 to 1976, approximately how many principal inter- views for Broadway productions did you attend? A I would say maybe 30. 25 or 30. It's hard to guess. Q This is just for Broadway pro- ductions? A Just Broadway, yes. It's hard to separate [753] them in my mine from non-Broadway. It seemed I was going all day, every day. Q Did you get an audition from any of them? A No, I didn't. Q Since you have been represented by an agent have you gotten any Broadway auditions? A Yes, guverai. Probably at least six, maybe eight or ten. Q How long is a principal inter- view? A Well, you mean how long is each -157- individual scene in a principal interview? Q Can you describe the principal interview process very briefly? A Yes. The principal interviews are set up, I think they are now three days, but at the time that I was doing them they were two days. Two eight-hour days. And I would go very early in the morning, per- haps two or three hours before the princi- pal interview started. Q Why would you do that? A Because there was such a long list of people waiting to be seen. There may be 500 people show up on each day and people just took to showing up earlier and earlier to get their name on a list so that they could then be given a card so that they could then either wait [754] to be seen or sometimes there would be three or four interviews in one day, and you'd run from one to the other and back and forth, and, you know, is my number coming up here yet, or up here. -158- Q And when you were seen -- A When you were seen you would have maybe a couple of minutes. Q Did you get to perform? A No. That was one of the bad things about it. Q How is an audition different from a principal interview? A In an audition you do at least to some extent perform. I think there is no similarity, really, because one is just presenting yourself and one is working with a script. And working with a script is totally different. I don't think there is any way to assess capability from an interview. Q Aside from these Broadway audi- tions which you have gotten with an agent, which you were unable to get through the principal interviews without an agent, are there any other examples you can give of how an agent has helped you get auditions -159- you could not get before having an agent? A Well, yes. One of the main things that sticks [755] out in my mind was the Goodspeed Opera House. Q What is the Goodspeed Opera House? A You could call it a summer stock theatre, although it was about a six-month season. It's in Connecticut and it's a theatre where New York agents and producers very frequently attend the performances. They produce musicals only, three a season, and many of their works happen to come to Broadway. | It has a kind of reputation as a Broadway tryout house. Q Had you tried to get an audition with the Goodspeed Opera House? A Yes, I had, for several years. Q What had you done to try to get an audition? A I had sent pictures and resumes with letters to the producer; I had attend- -160- ed principal interviews and had never gotten an audition out of them. One year, in fact, I felt that possi- bly there were some very small roles that might have been cast out of chorus calls, and I went to chorus calls and was told that the roles, however, had previously been cast. Q Did the situation change when you began working with an agent? A Yes. When I was signed to my agent, [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_0367%3A03. Public record. Not legal advice.