AMERICAN FEDERATION OF MUSICIANS OF THE UNITED STATES AND CANADA ET AL. v. CARROLL ET AL.
No. 309
Supreme Court of the United States
Argued March 4, 1968.—Decided May 20, 1968.
391 U.S. 99
*Together with No. 310, Carroll et al. v. American Federation of Musicians of the United States and Canada et al., also on certiorari to the same court.
Godfrey P. Schmidt argued the cause and filed briefs for respondents in No. 309 and petitioners in No. 310.
Briefs of amici curiae were filed by J. Albert Woll, Laurence Gold, and Thomas E. Harris for the American Federation of Labor and Congress of Industrial Organizations, and by Shayle P. Fox and Samuel H. Young for the National Association of Orchestra Leaders.
MR. JUSTICE BRENNAN delivered the opinion of the Court.
This action for injunctive relief and treble damages alleging violations of the Sherman Act,
I.
The petitioners are labor unions of professional musicians. The union practices questioned here are mainly those applied to “club-date” engagements of union members. These are one-time engagements of orchestras to provide music, usually for only a few hours, at such social events as weddings, fashion shows, commencements, and the like.3 The purchaser of the music, e. g., the father of the bride, the chairman of the events, etc., makes arrangements with a musician, or with a musician‘s booking agent, for an orchestra of a conductor and a given number
A musician performing “club-dates” may perform in different capacities on the same day or during the same week, at times as leader and other times as subleader or sideman. The four respondents, however, are musicians who usually act as leaders and maintain offices and employ personnel to solicit engagements through advertising and personal contacts. When two or more engagements are accepted for the same time, each of the respondents will conduct, and, except respondent Peterson, sometimes play, at one and designate a subleader to perform the functions of leader at the other.4
The four respondents were members of the petitioner Federation and Local 802 when this suit was filed.5 Virtually all musicians in the United States and the great
(1) Petitioners enforce a closed shop and exert various pressures upon orchestra leaders to become union members.
(2) Orchestra leaders must engage a minimum number of sidemen for club-date engagements.
(3) Orchestra leaders must charge purchasers of music minimum prices prescribed in a “Price List Booklet.” The prices are the total of (a) the minimum wage scales for sidemen, (b) a “leader‘s fee” which is double the sideman‘s scale when four or more musicians compose the orchestra, and (c) an additional 8% to cover social security, unemployment insurance, and other expenses. When the leader does not personally appear at an engagement, but designates a subleader and four or more musicians perform, the leader must pay the subleader one and one-half times the wage scale out of his “leader‘s fee.”
(4) Orchestra leaders are required to use a form of contract, called the Form B contract, for all engagements. In the club-date field, however, Local 802 accepts assurances that the terms of club-date engagements comply with all union regulations and provide for payment of the minimum wage. Union business agents police compliance.
(6) Orchestra leaders are prohibited from accepting engagements from or making any payments to caterers.
(7) Orchestra leaders may accept engagements made by booking agents only if the booking agents have been licensed by the unions under standard forms of license agreements provided by the unions.
The District Court assumed, and the Court of Appeals held, that orchestra leaders in the club-date field are employers and independent contractors.7 Respondents argue that petitioners’ involvement of the orchestra leaders in the promulgation and enforcement of the challenged regulations and bylaws creates a combination or conspiracy with a “non-labor” group which violates the Sherman Act. Allen Bradley Co. v. Union, 325 U. S. 797, 800; Los Angeles Meat & Provision Drivers Union v. United States, 371 U. S. 94; Mine Workers v. Pennington, 381 U. S. 657. But the Court of Appeals concurred in the finding of the District Court that such orchestra leaders, although deemed to be employers and independent contractors, constitute not a “non-labor” group but a “labor” group. 372 F. 2d, at 168.8
The criterion applied by the District Court in determining that the orchestra leaders were a “labor” group
The District Court found that the orchestra leaders performed work and functions which actually or potentially affected the hours, wages, job security, and working conditions of petitioners’ members.9 These findings have substantial support in the evidence and in the light of the job and wage competition thus established, both courts correctly held that it was lawful for petitioners to pressure the orchestra leaders to become union mem-
The District Court also sustained the legality of the “Price List” stating, “In view of the competition between leaders and sidemen and subleaders which underlies the finding that the leaders are a labor group, the union has a legitimate interest in fixing minimum fees for a participating leader and minimum engagement prices equal to the total minimum wages of the sidemen and the participating leader.” 241 F. Supp., at 890. The Court of Appeals, one judge dissenting, disagreed that the “Price List” was within the labor exemption, stating that “the unions’ establishment of price floors on orchestral engagements constitutes a per se violation of the Sherman Act.” 372 F. 2d, at 165. The premise of the majority‘s conclusion was that the “Price List” was disqualified for the exemption because its concern is “prices” and not “wages.” But this overlooks the necessity of inquiry beyond the form. MR. JUSTICE WHITE‘S opinion in Meat Cutters v. Jewel Tea, 381 U. S. 676, 690, n. 5, emphasized that “[t]he crucial determinant is not the form of the agreement—e. g., prices or wages—but its relative impact on the product market and the interests of union members.” It is therefore not dispositive of the question that petitioners’ regulation in form establishes price floors.
“As a consequence of this relationship, the practices of [orchestra leaders] when they lead and play must have a vital effect on the working conditions of the non-leader members of the union. If they undercut the union wage scale or do not adhere to union regulations regarding hours or other working conditions when they perform they will undermine these union standards. They would put pressure on the union members they compete with to correspondingly lower their own demands.” 241 F. Supp., at 888.
The Court of Appeals itself expressed a similar view in saying:
“even those orchestra leaders who, as employers in club dates, lead but never perform as players, are proper subjects for membership because they are in job competition with union sub-leaders; each time a non-union orchestra leader performs, he displaces a ‘union job’ with a ‘non-union job.‘” 372 F. 2d, at 168.
And of particular significance, the Court of Appeals noted that where the leader performs
“the services of a sub-leader would not be required and the leader may in this way save the wages he would otherwise have to pay. Consequently, he could make the services of his orchestra available at a lower price than could a non-performing leader.” 372 F. 2d, at 166.
“The inadequacy of a rental which means that the owner makes up his excess costs from his driver‘s wages not only clearly bears a close relation to labor‘s efforts to improve working conditions but is in fact of vital concern to the carrier‘s employed drivers; an inadequate rental might mean the progressive curtailment of jobs through withdrawal of more and more carrier-owned vehicles from service. . . .” 358 U. S., at 294.
We disagree with the Court of Appeals that “[t]he circumstances constituting a possible threat to the employment of sub-leaders or the displacement of a sideman. . . are not at all comparable,” 372 F. 2d, at 166. The price floors here serve the identical ends served by Article XXXII in Oliver I. The Price List has in common with
The majority of the Court of Appeals apparently regarded Meat Cutters v. Jewel Tea, supra, as militating against this conclusion. The majority read the opinions of MR. JUSTICE WHITE and Mr. Justice Goldberg in that case as requiring a holding that “mandatory subjects of collective bargaining carry with them an exemption. . .,” but that “[o]n matters outside of the mandatory area . . . no such considerations govern. . . .” 372 F. 2d, at 165. Even if only mandatory subjects of bargaining enjoy the exemption—a question not in this case and upon which we express no view—nothing MR. JUSTICE WHITE or Mr. Justice Goldberg said remotely suggests that the distinction between mandatory and nonmandatory subjects turns on the form of the method taken to protect a wage scale, here a price floor. To the
The reasons which entitle the Price List to the exemption embrace the provision fixing the minimum price for a club-date engagement when the orchestra leader does not perform, and does not displace an employee-musician.11 That regulation is also justified as a means of preserving the scale of the sidemen and subleaders. There was evidence that when the leader does not collect from the purchaser of the music an amount sufficient to make up the total of his out-of-pocket expenses, including the sum of his wage-scale wages and the scale wages of the sidemen,12 he will, in fact, not pay the sidemen the prescribed scale. The District Court found:
“It is unquestionably true that skimping on the part of the person who sets up the engagement [the leader] so that his costs are not covered is likely to have an adverse effect on the fees paid to the participating musicians. By fixing a reasonable amount over the sum of the minimum wages of the musicians participating in an engagement to cover these
expenses, the union insures that ‘no part of the labor costs paid to a [leader] would be diverted by him for overhead or other non-labor costs.‘” 241 F. Supp., at 891.
In other words, the price of the product—here the price for an orchestra for a club-date—represents almost entirely the scale wages of the sidemen and the leader. Unlike most industries, except for the 8% charge, there are no other costs contributing to the price. Therefore, if leaders cut prices, inevitably wages must be cut.
The analyses of MR. JUSTICE WHITE and Mr. Justice Goldberg in Jewel Tea support our conclusion. Jewel Tea did not hold that an agreement respecting marketing hours would always come within the labor exemption. Rather, that case held that such an agreement was lawful because it was found that the marketing-hours restriction had a substantial effect on hours worked by the union members. Similarly, the price-list requirement is brought within the labor exemption under the finding that the requirement is necessary to assure that scale wages will be paid to the sidemen and the leader. If the union may not require that the full-time leader charge the purchaser of the music an amount sufficient to compensate him for the time he spends selecting musicians and performing the other musical functions involved in leading, the full-time leader may compete with other union members who seek the same jobs through price differentiation in the product market based on differences in a labor standard. His situation is identical to that of a truck owner in Oliver I who does not charge an amount sufficient to compensate him for the value of his labor services in driving the truck, and is a situation which the union can prevent consistent with its antitrust exemption. There can be no differentiation between the leader who appears with his orchestra and
We think also that the caterer and booking agent restrictions “are at least as intimately bound up with the subject of wages,” Oliver II, supra, at 606, as the price floors. The District Court found that the booking agent regulations were adopted because of experience that “many booking agents charged exorbitant fees to members and booked engagements for musicians at wages which were below union scale.” 241 F. Supp., at 881-882. On the basis of these findings, the District Court concluded:
“Because the activities of the booking agents here have and had a direct and substantial effect on the wages of the members of [the unions], I find that they are in an economic interrelationship with the members . . . such that the [unions] are justified in regulating their activities . . . . Furthermore, I find the regulations to be reasonably related to their interest in maintaining observance of union scale wages and working conditions.” 241 F. Supp., at 893.
The finding concerning the caterer regulations was to the same effect.
“The evidence discloses that caterers took advantage of their position before the union adopted its regulations to, in effect, book orchestras and they
continue to do so, at least to some extent. Caterers recommend orchestras to customers and receive commissions from orchestra leaders. These practices actually or potentially affect the wages of the musicians involved.
“I believe that this constitutes an economic interrelationship which permits the defendants to regulate and prohibit the booking activities of the caterers without violating the Sherman Act.” 241 F. Supp., at 893.
The judgment of the Court of Appeals is vacated and the cases are remanded with direction to enter a judgment affirming the judgment of the District Court in its entirety.
It is so ordered.
THE CHIEF JUSTICE and MR. JUSTICE MARSHALL took no part in the consideration or decision of these cases.
MR. JUSTICE WHITE, with whom MR. JUSTICE BLACK joins, dissenting.
In my view the Court is misled by the peculiar role of bandleaders and the peculiar economics of the club-date music industry, and fashions a rule which, if comprehensible at all, has unfortunate consequences for the delicate and difficult area of conflict between antitrust and labor policy.
The four respondents in No. 309 (hereafter respondents) are successful bandleaders whose success has made it unnecessary for them to continue working from time to time as sidemen and subleaders. However they do work as leaders.1 Indeed, their business practice was to lead
The Court accepts the finding that respondents were a “labor” group. I would think it beyond dispute that leading a band (a task which usually includes also occasional playing of an instrument) is “labor group work,” but that it is equally beyond dispute that managing and administering a business whose function is supplying bands to fathers of brides is not “labor group work.”2 The first task, leading, certainly possesses “economic interrelationship[s] affecting legitimate union interests,”3 and the second clearly does not. The Court appears to feel that because respondents’ work includes some “labor group” tasks, all aspects of respondents’ activities are proper subjects of union concern. I see no reason why the law in this area cannot be sufficiently flexible to grant the union antitrust immunity for regulation of those activities of bandleaders which sufficiently affect union members, while denying that immunity where the union has no proper concern.
Teamsters Union v. Oliver, 358 U. S. 283 (1959), is a difficult case, but an important one, with which I fully
The question is quite different, however, when we deal with imposition of fixed minimum charges by leaders for engagements at which they do not themselves lead. For such engagements the role of the leader is solely that of entrepreneur: he obtains a customer (partly, it appears, through the attraction of his reputation as an established provider of music), makes the necessary arrangements for servicing the customer, including employment and supervision of staff, and maintains the administrative structure required for this work: office, payroll clerk, permanent telephone listing, and so forth. The union has of course a full right to impose on this leader, who is in effect an employer, its minimum scale for work by sidemen and subleaders. The musicians union, however, goes further. It requires that, for an engagement of four or more musicians, the leader charge his customer not less than the sideman‘s scale times the number of musicians (including the subleader), plus double the sideman‘s scale to compensate the leader, of which one-fourth—plus the sideman‘s scale—goes to the subleader. The union is clearly requiring that the leader charge his customer more than the total of the leader‘s wage bill, even though the leader himself does no “labor group” work.
There is no clear holding by this Court that a union is not immune from antitrust liability when it requires that all the employers with whom it deals charge uniform prices. It has certainly been assumed, however, that the Norris-LaGuardia exemption to the antitrust laws does not extend this far. In Meat Cutters v. Jewel Tea
“Jewel, for example, need not have bargained about or agreed to a schedule of prices at which its meat would be sold and the unions could not legally have insisted that it do so. But if the unions had made such a demand, Jewel had agreed and the United States or an injured party had challenged the agreement under the antitrust laws, we seriously doubt that either the unions or Jewel could claim immunity by reason of the labor exemption, whatever substantive questions of violation there might be.” 381 U. S., at 689.
Mr. Justice Goldberg in his separate opinion, joined by JUSTICES HARLAN and STEWART, wrote:
“The direct and overriding interest of unions in such subjects as wages, hours, and other working conditions, which Congress has recognized in making them subjects of mandatory bargaining, is clearly lacking where the subject of the agreement is price-fixing and market allocation. Moreover, such activities are at the core of the type of anticompetitive commercial restraint at which the antitrust laws are directed.” 381 U. S., at 732-733.
MR. JUSTICE DOUGLAS, dissenting in Jewel Tea and joined by JUSTICES BLACK and Clark, wrote:
“[T]he unions can no more aid a group of businessmen to force their competitors to follow uniform store marketing hours than to force them to sell at
fixed prices. Both practices take away the freedom of traders to carry on their business in their own competitive fashion.” 381 U. S., at 737.7
Unions are, of course, not without interest in the prices at which employers sell. As the majority points out, by seeing that employers sell at prices covering all their costs, a union can insure employer solvency and make more certain employee collection of wages owed them. In addition, assuring that competing employers charge at least a minimum price prevents price competition from exerting downward pressure on wages. On the other hand, price competition, a significant aid to satisfactory resource allocation and a deterrent to inflation, would be substantially diminished if industry-wide unions were free to dictate uniform prices through agreements with employers.8 I have always thought that this strong policy outweighed the legitimate union interest in the prices at which employers sell, and until today I had thought that the Court agreed. Of course the lack of discussion of this question in the majority‘s opinion, and the failure to refer to the unanimous rejec-
I am also in disagreement with the majority about certain of the questions presented in No. 310. The musicians union imposes its rules not only on respondents, who sometimes lead and sometimes hire subleaders, but upon leaders who never lead personally. These leaders are merely independent businessmen, performing no “labor group” work, and the union has no proper interest in regulating their activities. Even though the District Court found that the union imposed its rules on these leaders, I believe the facts as found below demonstrate that the union formed a combination with those independent businessmen.9 If the union and employers combined, I have no doubt that some of the regulations agreed upon were unlawful restraints of trade. Boycotting booking agents and caterers who occasionally did business with employers not living by the union‘s rules unreasonably restrained trade. So also did combining with willing caterers and booking agents to impose uniform business practices on bandleaders and to boycott those who did not abide by the established rules and policies. Agreeing with employers that the employers would not take their wares to other cities without charging prices 10% higher than the local employers charged was a
By combining with a nonlabor group, the musicians union has obtained effective control of the entire club-date industry. The device for this control has been imposition of union membership and union rules on cooperating bandleaders, and on some who did not want to cooperate. I am sure the Clayton and Norris-LaGuardia Acts never intended to give unions this kind of stranglehold on any industry. It may be that the Court views this industry as having special problems of supply and demand requiring special treatment under the antitrust laws. If this is the case, the Court should frankly say so and seek to confine the misguided rules of law it announces. More appropriately, the Court should leave to Congress the task of making special provisions in the antitrust laws for the special circumstances of the music industry. On more than one occasion Con-
Notes
“The predominant form of single engagement is the ‘club date‘. . . . Single engagements also include the ‘non-club date’ field, consisting of television appearances or recording engagements, etc. . . .” 372 F. 2d, at 158.
241 F. Supp., at 887.