American Federation of Musicians v. Carroll

PETITIONER:American Federation of Musicians
RESPONDENT:Carroll
LOCATION:South Boston Court

DOCKET NO.: 309
DECIDED BY: Warren Court (1967-1969)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 391 US 99 (1968)
ARGUED: Mar 04, 1968
DECIDED: May 20, 1968

Facts of the case

Question

Audio Transcription for Oral Argument – March 04, 1968 in American Federation of Musicians v. Carroll

Earl Warren:

American Federation of Musicians of the United States and Canada, et al., petitioners versus Joseph Carroll et al. and number 310, Joseph Carroll et al., petitioners versus American Federation of Musicians of the United States and Canada et al.

Ronald Rosenberg:

May it please the Court.

This case is before Your Honors on cross petitions for certiorari to the Second Circuit.

In case 309, the American Federation of Musicians and its logo late 02 seek reversal of the Court of Appeals holding to which Judge Friendly had decided that certain of the Unions regulations constitute price fixing and violation of the antitrust laws.

In case number 310, the plaintiffs four professional musicians challenged the Circuit Court’s unanimous decision that a host of other practices which they had challenged and which the District Court had dismissed, did not constitute — did not constitute violations of the antitrust laws.

The plaintiffs had raised an entire series of violations of the antitrust laws which both courts below categorized into set — eight separate categories but it is to the allegation that the unions violated the antitrust laws, the predicate of the majority opinion of the Second Circuit and to the contention that the unions violate the antitrust laws by accepting so called orchestra leaders into membership that I will address to my remarks primarily.

The second point that the unions violate the antitrust laws by seeking and even coercing orchestra leaders into membership, I will address myself to my opening remarks because in our view, it sheds light on the basic contention in case number 309, the price fixing charge and indeed in our opinion, the answer to the question is to whether or not the union may admit the so called orchestra leaders into membership is in fact conclusive analytically under this Court’s decision of the question of whether or not the unions may legitimately set a minimum price for the total contribution that the orchestra leader makes to the so called purchase or the music.

Following a five week trial on this entire case involving myriad of issues, Judge Levet who had had a certain special familiarity with the industry, with the practices of the American Federation of Musicians due to a length of this particular trial and to his participation in other earlier litigation between these two parties, dismissed the complaints in their entirety.

His opinion which has contained of course in the record contains comprehensive findings of fact which are meticulously annotated to the lengthy record of this case.

And he as I have indicated dismissed the complaints in their entirety.

We rely very heavily Your Honors upon the careful findings of fact that the trial judge made in this case.

Indeed, these findings of fact lay at the heart of this case and in the findings of job and wage competition as I shall attempt to show to you Your Honors in fact or conclusive of the legitimacy of the unions’ contentions in this case.

Although the plaintiff’s here in case 310 attack the unions’ regulations and so far as they pertain in all fields of musical endeavor, both courts below considered that the primary — indeed the main attack concern the so called club-date field which was by stipulation said to be single engagements concerning social affairs such as Bar Mitzvahs or weddings and other comparable social events.

The plaintiffs in fact in this case, the four remaining plaintiffs do perform and there is a finding to the effect that they perform primarily in the club-date field.

The so called non-club-date field would include theatrical engagements, opera recordings, nightclub acts, and engagements of that type.

The club-date field again is single engagements concerning social affairs.

Now, in order to understand the nature of this particular field and the manner which these particular engagements come about, it might be helpful to describe the — some of the testimony of the witnesses as regards the method by which a so called club-date comes about.

Normally, the purchaser of the music, the sponsor of the social affair will approach a given musician.

You might have met that musician before, seen them in the previous engagement or he might even be a relative.

In some circumstances where the fact that a given engagement is to come about that there is to be a Bar Mitzvah that there is to be a wedding is known the musician will approach the sponsor of the activity himself seeking the engagement.

Now, when the sponsor of the engagement in the pawns of the trade, the purchase of the music engages that particular musician and to obtain to play that engagement and to obtain the other musicians who will play, that leader by that act becomes the leader for the engagement and he then undertakes the responsibility of playing that engagement, obtaining the other musicians who will play who are called sidemen, straight instrumentalists.

Now the particular musician who has assumed the responsibility of leader might be acting his particular time for a leader for the first time of his life, for the hundredth time in his life, he might — the very afternoon on which he is to play as a leader that evening, perform as a sidemen.

The fluidity and the interchangeability of functions in this field as outlined in the record and is in the findings of fact is considerable.

Musicians perform in many fields.

They perform in the club-date field, the non-club-date field.

They are sometimes leader and sometimes sidemen.

(Inaudible)

Ronald Rosenberg:

Yes Your Honor.

On each engagement, there will be someone performing the leaders function.

Now at — in response really to what Justice Harlan has just said, at each engagement, there will be a person who will perform the conducting function and that is the leader’s function, the obligation to conduct.

Ronald Rosenberg:

Now the leader will also and almost instances playing instrument as well as conduct.

The sidemen of course as instrumentalist do playing – play an instrument.

Now there are occasions in this field in which the particular leader in question might have two or more engagements on the same night.

And under those circumstances, he will obtain what is called a sub-leader to perform the leading function, to do the conducting at that particular engagement.

So that in essence, there are the sidemen who perform as instrumentalist, the sub-leader who both conduct and generally will play an instrument and the leader who will conduct if he is present to a particular engagement and will generally play an instrument as well.

Abe Fortas:

Are those functions always performed by the same men that it say as the man who obtains the engagement always the leader?

Ronald Rosenberg:

Yes.

That is the — the person who does the obtaining is a leader but the conducting function might be performed either by the leader or by a sub-leader.

Abe Fortas:

Yes, but it might be performed by somebody else too, might it not?

Ronald Rosenberg:

The conducting function?

Abe Fortas:

Yes.

What you’re telling me is that the man — if the man who obtains engagement play at a particular club-date and he will always — he will always be the leader I suppose.

That means select some music and determine some tempo and so on, is that what you’re telling me?

Ronald Rosenberg:

Well, there are — there are conceivable occasions on which the person is obtaining will not in fact perform the conducting function but that is the rarity and I was attempting to describe the basic pattern.

Now, although the unions contended that the original trial of the case that the leaders in this circumstances are not employers in the club-date field, we will for purposes of our case before Your Honors assume as Judge Levet, the trial judge assumed that leaders are employers because we believe as did the trial judge and as did Judge Friendly in his dissent that there is no antitrust violation here regardless of whether or no the leaders are called employers whether they’re called independent contractors or whether they are called what we would call them working musicians who perform at the trade, who conduct, who play instruments and that is the critical aspect as far as we are concerned and not the fact that they might be called employers and not the fact that they might be called independent contractors.

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

That is our position for purposes of this case Your Honor that the —

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

Well, we are — we are prepared to concede for purposes of this case Your Honor that the leader is the employer because we believe that the question is — the questions presented by this case can be answered regardless of the status of the leader as an employer or as an employee.

The same fashion as Judge Levet.

Abe Fortas:

Why do you say is an employer?

Who pays the sideman?

Ronald Rosenberg:

That varies Your Honor.

They — money might be funneled through the leader to the sideman and — or in some circumstances admittedly rare the purchase or the music might even pay directly.

Abe Fortas:

I must assume that you are aware of that — that point maybe the utmost importance in the decision of this case.

Ronald Rosenberg:

We are Your Honor.

But we — we do — we believe basically that the leader is not in fact he employer but Your Honors, do not have before them a record sufficient for you to reach that particular question and to decide ultimately if it’s critical to the decision, the question of whether or not the leader is or is not the employer because Judge Levet who heard the entire case assumed as we are now assuming that the leader is the employer.

The Court of Appeals went on and despite the fact that there had been no express finding on this particular point, concluded that the leader was the employer in the club-date field.

It’s our position as it was Judge Levet’s but that issue was not controlling here but if it were — if in Your Honors opinion it were then not in this case would require a remand so that the trial judge who heard all of the evidence on this particular issue would be in the position to decide the initial —

Abe Fortas:

I don’t follow you there that is, I assume that you are making a concession of counsel that this case can be decided on the basis that the leader is the employer.

Ronald Rosenberg:

We are conceding, yes Your Honor that they are the employer because we believe —

Abe Fortas:

So there’s no issue of fact on that both sides I assume to take a position that the leader is the employer that as if it were a stipulated fact for us isn’t it?

Why would we have to remand it?

Ronald Rosenberg:

I don’t believe so Your Honor.

I believe we have reserved the question of whether or not the leader is the employer in our original petition and —

Abe Fortas:

Well, you’re not — you either have to say that you are conceding the point or you’re not conceding the point and which is it?

Ronald Rosenberg:

We are not conceding it if it — if it affects the case and the result ultimately, we are not conceding the point.

Hugo L. Black:

In both cases?

Ronald Rosenberg:

It was not intended as a concession Your Honor.

Our basic position is that the point is in material to the decision in this case.

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

In this case.

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

Certainly not our contention to concede the point Your Honor, I would like to make the point to describe our basic argument as to why we consider this point quite irrelevant that the status of the leader is insignificant in the facts of this case.

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

I certainly did not intend to concede the point Your Honor.

We will not address ourself to that particular point.

We have not in any of our papers to this Court ruin into that point at any great length because of our basic belief that a case can be answered without this Court deciding that issue, deciding as Judge Levet or did assume that the leader is the employer that the issues are the same and that the ultimate conclusion is that there is no violation of the antitrust law and any of the items in this particular complaint.

The — as I indicated previously, the major — one of the major contentions of the plaintiffs throughout has been that the union violates the antitrust laws by admitting leaders into membership.

And this contention was advanced despite the plaintiff’s own stipulation that the leaders have traditionally for at least 65 years been members of the union.

In both court’s below found that in fact, that in the commercial or non-club-date engagements where there formal collective bargaining agreements which cover the leader as an employee that the leader is in fact the employee.

Both courts below made that finding in the non-club-date field.

As indicated, the trial court decided it unnecessary to his decision to reach a conclusion on their status in the club-date field.

Thus when the plaintiffs asked the trial court to bar leaders, the unions from seeking leaders into membership, they seek to obliterate practices which this union follows its inception, no recent practice, no recent idea of the type occurred to the people involved in the Grease Peddlers case or the Hinton case but rather the membership of these people in the union was a long historical practice stemming from the fact that they are working musicians that when they conduct and when they play instruments at these engagements, they are working musicians.

Now the trial court attempting to answer the questions presented by the complaint stated that the issue before him had to be resolved on the basis of this Court’s decision in Meat Drivers versus United States.

But the question before him was whether or not the leaders were in such job and wage competition or other economic relationship that the union had a legitimate right to seek and to take these people into membership.

And he concluded on the basis of carefully detailed lengthy findings set forth in this appendix that the leaders when they conduct, displace a sub-leader from a job when they play an instrument as they almost always do, they displace a sideman from a job and predicated on those findings of job displacement by the leaders, he concluded that the leaders were in job and wage competition with the union’s other employee members and for that reason, the union did not violate the antirust laws by admitting leaders into membership.

And —

Potter Stewart:

Not admitting, it’s requiring them to belong, isn’t it?

Ronald Rosenberg:

There is no real difference Your Honor if we can legitimately and lawfully within the meaning of the antitrust has admit them, we can also attempt to compel them to join.

Ronald Rosenberg:

I think that’s clear under the decisions in Apex and Hutchinson and so forth that the question is whether or not they can belong and not whether or not the method by which we seek to obtain them whether voluntarily or whether they join through some sort of union pressure.

Potter Stewart:

Aren’t there at least some orchestra leaders who are never anything but leaders.

Ronald Rosenberg:

There are a few who never act as sideman.

The –

Byron R. White:

Including these equal —

Ronald Rosenberg:

Well, the –

Byron R. White:

— to be included in the —

Ronald Rosenberg:

— before present –-

Byron R. White:

(Inaudible)

Ronald Rosenberg:

— yes, the four present plaintiffs were found to be persons who perform as leaders all of the time.

Potter Stewart:

And is this — you talked about club-dates in reading the briefs, I thought the dichotomy was between single engagements being engagements up to five days and steady engagements being engagements for longer than that.

Ronald Rosenberg:

No, I believe Your Honor that — well, there are various —

Potter Stewart:

There are sub — subclassification under single engagements, is that right?

Ronald Rosenberg:

No, I think the Court of Appeals —

Potter Stewart:

Is that wrong?

Ronald Rosenberg:

— addressed itself to the club-date field and to the so called hotel steady engagement field, lumping those — lumping those two together.

Potter Stewart:

Not lumping, distinguishing isn’t it?

Ronald Rosenberg:

Well, the basic distinction is between those short performances of a strictly casual nature which occur in the social engagement of club-date field.

Potter Stewart:

I’d thought that the industry practice and the union practice was to categorize the distinguished things I say is single engagements which I understood it were up to five days up to a week or five days in steady engagements which engagements longer than that.

Ronald Rosenberg:

Well, that’s the–

Potter Stewart:

And then there are subcategories of traveling engagements —

Ronald Rosenberg:

There are various union terminologies but Judge Levet in his decision divide the case into the club-date and steady — and hotel steady engagement and all other fields.

So the basic division that was reached in terms of the employer issue was on the club-date and hotel steady as being that group that Judge Levet assumed were employers and the other group which we have called the non-club-date field.

I think that the Court of Appeals follow that particular line and although it based its decision on the employments, they just primarily on the existence of collective bargaining agreements and then made a statement along the findings of various collective bargaining agreements in certain areas, all of which would be in what we call the non-club-date field.

But the terminology that I’m using is basically addressed to the terminology that Judge Levet had used in his original decision and his — that area where he assumed employer status which is club-date and hotel steady field.

Potter Stewart:

And is that all that this case has to do with, club-date and hotel steady field?

Ronald Rosenberg:

Yes Your Honor.

In our opinion, I think that the other issue is where the leader is the employee as the Court of Appeals found and as the trial court found and there are no basic antitrust issues involved.

Potter Stewart:

Well, there are other areas where the leader might be an employer.

Areas other than the club-date and hotel — steady hotel field aren’t there?

Potter Stewart:

There’s a traveling engagement and others.

Ronald Rosenberg:

There was no finding Your Honor.

Potter Stewart:

And single engagements of up to five days.

Ronald Rosenberg:

There’s no finding that the leader was the employer in any of these fields.

In fact, there was an express finding that in the television recording and the so called other commercial and non-club-date fields that the leader was not the employer.

Potter Stewart:

Well, let’s go back to this small group which you concede that exist that consisting of people who are leaders and only leaders.

I don’t want to date myself but people like Wayne King or Benny Goodman.

They are employers, are they not?

Ronald Rosenberg:

With all do respect Your Honor, the people that you’ve just named are just that.

They are named bands and there was an expressed finding by the trial court, the plaintiffs in this case do not belong to the group which might be called named bands and these — the people that we’re talking about might lead all the time but they are certainly not named bands and there is an unchallenged finding by the District Court on that particular proposition.

Potter Stewart:

Well, maybe not national named bands but in a particular community, a person could — there’s that subcategory I suppose isn’t there?

Ronald Rosenberg:

That’s just not the finding Your Honor, the finding that this people are the people who lead all the time and that is all.

There is no finding that they are named bands in that sense and all of the criteria, what constitutes a name band or set out in the trial judges opinion and he concludes from that that these people don’t fit that category that they don’t have those special characteristics which would make one a leader of a named band.

But that’s —

Potter Stewart:

And the implication is that if they were, the result would have been different in the opinion of the District Court?

Ronald Rosenberg:

No, Your Honor.

I don’t think —

Potter Stewart:

Why is it say so?

Why does he talk about it?

Ronald Rosenberg:

Pardon me.

In terms of —

Potter Stewart:

Why does he talk about the fact that they’re not —

Ronald Rosenberg:

He talks about it primarily in terms of the class action aspects of the case which are at this point really out of the case.

He was attempting to answer the question of whether or not there was in fact something of a class action.

Our basic point is that the antitrust laws are not violated when these people work as musicians.

What we’re talking about here is quite irrelevant to whether they lead sometimes or whether they lead all the time or whether they lead just half of the time.

The fact is that when they lead and conduct and play an instrument, they are job threats and here is the finding that the Court of Appeals — there are job threats to our employee members and that gives us the right to take them into membership and it gives us the right to regulate their activities in an effective matter and it’s when they play, it’s what they do as musicians that we’re talking about and not some abstract notion of their status as employers or independent contractors.

They are job threats.

They displace working musicians –-

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

Pardon me?

Hugo L. Black:

You said the odds are – now what do you propose?

Ronald Rosenberg:

They are job threats Your Honor.

In the words of the Court of Appeals, they are job threats to the unions’ employee members because they take jobs away from the instrumentalists, the sidemen.

They take jobs away from the sub-leaders.

And what we are tempted — what we attempt to do and we have always attempted to do is to assure that if they are to play these jobs, they will play these jobs on a fair condition that they will not.

Abe Fortas:

But suppose — suppose you have somebody though who doesn’t know how to play an instrument at all but it is a — but he gets engagements, he books engagements and he hires musicians to go out and play them.

Now do you concede that the — that wouldn’t — it would not be appropriate for the union to admit or require membership of that sort of a person?

Ronald Rosenberg:

Well —

Abe Fortas:

There are such persons in existence.

I don’t recall what the finding say but take that and take that illustration.

Ronald Rosenberg:

Well Your Honor, in those circumstances, there are very, very few people like that but they you know — really would not be in our opinion leaders in the sense that we use the term.

They would be what we call booking agents and under those circumstances, the unions’ interest would not be so great but what we’re talking about is.

Abe Fortas:

What I’m trying to get to your theory which is what I’m interested in here.

Are you saying only that where the same individual books the engagement and plays an instrument or leads the — or as present and leads without playing the instrument that in that situation and that situation only, you contend that it’s proper for the unlawful and not a violation with antitrust laws toward the union to admit him to membership and to impose its regulations on him?

Are you confining yourself to that restricted class and then affect conceding that if the person who books the engagement and rounds up the musicians is not an instrumentalist and doesn’t play or is not present and actually conducting the instrumentalist then he is not eligible for union membership?

Ronald Rosenberg:

No Your Honor.

Our primary argument is based upon what is the overwhelming — the overwhelming fact that these people do when they lead on an everyday basis that they are performing musicians and that the vast number of the situations to which we’re — with which the union is concerned are the what we would call the performing leader.

Now, there are —

Abe Fortas:

But you’re making things very difficult for me because on one hand, you’re asking as to confine ourselves to a specific situation.

I don’t dispute your suggestion that that specific situation as prevalent, dominant numerically but you’re asking us to confine ourselves to a specific situation and nevertheless to blanket in every kind of a situation.

Ronald Rosenberg:

Well Your Honor, the ladder situation where the particular leader is not performing with the phrases, a non-performing leader.

We believe that that particular regulation which is not the predominant situation.

It’s a miniscule part of the basic picture.

In that particular situation, there’s a quite different argument.

Admittedly, that situation is far more difficult for our purposes in terms of its legitimacy than the situation of the — with the performing leader where the man actually works at the trade where people can see him so to speak and wavings it’s baton or playing its instrument.

In the situation where he doesn’t perform, we believe that the facts of the industry and as the trial court found, show that there is so direct relationship between the price of this so called non-performing leader charges and the amounts that the sideman will receive but under those circumstances, the unions regulation of a price is legitimate because it is Justice White’s words, a matter of imminent and direct concern.

But that is a quite different argument Your Honor than our fundamental argument about —

Abe Fortas:

Isn’t that true throughout our economic life.

And in that sense, the union could if you accept that theory.

Abe Fortas:

Why couldn’t the union regulate the price of automobiles?

Ronald Rosenberg:

Because Your Honor, our answer there is tied very directly to the special circumstances of this industry is found by the trial judge and that is the kind of fluidity, the interchangeability among functions in this particular used to be as such and the lack of any capital and requirement of any capital investment in the specific findings based upon the evidence that where the leader be he performing or not performing does not obtain as a price to the unions minimum the sideman won’t be paid.

Now that’s a very unusual situation.

That’s quite unlike the situation which Your Honor attempted to said out about an automobile where the union can’t show that kind of direct intimate relationship, a one on one relationship so to speak and I think that the — basically, these notions are non-performing leaders is really de minimis in the sense that it’s so small apart.

What we’re talking about primarily is our concern about the performing leader, about the leader when he conducts and when he plays on an instrument.

That is the fundamental aspect of our case and when he does that as I have indicated, he is in job and wage competition with the unions’ sidemen or sub-leader members.

And it was on that basis that both courts concluded that the union had a right to seek the leader as a member and the trial court on the basis again of that particular finding, on the findings of displacement and of job and wage competition, concluded that the union had a right not only to take them into membership but to set a rate for them.

Just a rate comparable to the rate for other musicians and to require in order that that rate maybe received that it will actually be received by that particular musician that they each have a minimum price through the purchase or the music.

Now the reason for the charge of the price is that where the leader or any independent contractor or employer in this sense is to receive moneys and if you call an employer who receives prices, if you call him an employee, he receives wages but it’s the same money for doing the same thing and what the union must do as it did in Oliver is to assure that he in fact receives in his pocket, the leader in our case or the owner operator in the Oliver case that Your Honors decided, receives in his pocket the amount that the union has set for the wage scale and as in Oliver, he is in fact charging an amount for a truck which is less than the true rate for that particular truck, he is not getting the wage scale because the difference between the true rental of the truck and the amount that he has received must be subtracted from his wage scale.

And so if the leader here receives something less than his total contribution for the performance, he is not getting the wage scale for the function that he is performing, conducting and acting as an instrumentalist and that is essentially our argument.

There is of course the argument quite different about the situation of when the leader does not perform and there, as I attempted to indicate to Justice Fortas, the special circumstances of this industry and the miniscule amounts involved in that particular case, show that the union has not violated the antitrust laws in that particular circumstance as well.

Potter Stewart:

That is because of a kind of a de minimis?

Ronald Rosenberg:

Basically a de minimis but also because of the very explicit findings of a direct relationship between price and wages here, that in this particular industry, the union has found and the evidence supported that the trial judge found that unless the leader be he performing or not, receives that amount.

He won’t pay the — he won’t pay the wages.

We’re dealing with a very special kind of industry.

There is no capital requirement.

People are at one moment leaders and the next moment sidemen.

Potter Stewart:

But I suppose a non-performing leader and that is a leader who performs only by waving a baton around is not in job competition with the sidemen, is he?

Ronald Rosenberg:

The phrase non-performing leader Your Honor does not concern the one who waves the baton conducting was stipulated to be a musical function.

Potter Stewart:

I see.

Ronald Rosenberg:

And that — so that when a leader conducts, he is a performing leader in the —

Potter Stewart:

I see.

What is a non-performing leader?

Ronald Rosenberg:

Non-performing leader is the one in the situation I attempted to describe where a man gets two or three engagements on the same night and he –

Potter Stewart:

And he’s somewhere else then?

Ronald Rosenberg:

— he gets someone else to act as a sub-leader –

Potter Stewart:

Although he called the engagement, I see.

Ronald Rosenberg:

Well, that is precisely in that context.

The union is looking generally to the man who sets it up to be there and do the conducting and then they are these chance situations in which you have a sub-leader used and which he is a non-performing leader.

Potter Stewart:

Now, what is this minimum price we’re talking about?

Potter Stewart:

Is this a package price for the whole union or what is it?

Ronald Rosenberg:

That’s a quite limited amount Your Honor.

It’s a minimum.

The union sets a minimum price which is the scale for the leader himself, for the function he is performing as a conductor and as an instrumentalist plus the wage of the sideman, plus an amount —

Potter Stewart:

Plus how much?

Ronald Rosenberg:

8% which was stipulated — which astounded the amount necessary for various income tax or social security withholding.

Potter Stewart:

Which the leader is responsible for as an employer.

Ronald Rosenberg:

That’s correct Your Honor under the Social Security Regulations he is responsible for that particular withholding, so that we have three basic components in the minimum that the union has set.

Each of this is an amount which he must put in the minimum price to the purchaser of the music.

And the reason that these are included is to assure if he were obligated to make a — make social security payments of a certain amount.

And in fact, he charges a minimum price, less than the amount of his own scale plus that withholding amount.

He would in fact be working at an amount less than the union scale for that particular job.

Abe Fortas:

Although we also have to or do we also have to consider in these two cases the territorial restrictions and all of the other things are in this complaint is originally filed as — which was as I understand, dismissed by the District Court.

Don’t we have to consider territorial restrictions here too?

Ronald Rosenberg:

Well I believe Your Honor, that’s in case 310.

The plaintiffs have attempted to bring that point up.

Abe Fortas:

Well, what’s your position about that?

Ronald Rosenberg:

The territorial restriction is strictly a term and condition of employment that involves a labor dispute within the meaning of Section 13.

In that particular aspect as the trial judge pointed out, we’re strictly dealing with the question of what a union may do in order to obtain benefits for its members.

Abe Fortas:

So what you’re saying then is that a musicians union, they prohibit musicians from New York from playing in Washington except on certain conditions vice versa, that kind of thing?

Ronald Rosenberg:

Basically Your Honor.

The regulations themselves are primarily an increase in scale.

A New York musician when he comes down in Washington will receive — it is required by union regulations to receive an additional amount as wages 10%.

Abe Fortas:

Well, he can’t play here, can he, unless he gets permission from the local in Washington?

Ronald Rosenberg:

No, he can play.

There are certain circumstances —

Abe Fortas:

Are you sure of that?

Ronald Rosenberg:

Yes Your Honor.

There are certain circumstances in which if in Washington on a long-term engagement, he might not be able to compete and these are on certain types of Local engagements and basically, he may go outside and they do all the time.

Byron R. White:

This is even on the assumption that we are making in this case that these leaders — these plaintiff leaders here are independent businessman and not employees and that the union and these leaders as independent businessman have in effect agreed to that — that the wages on the road or the price that the leaders will charge on the road will be higher?

Ronald Rosenberg:

The union regulations Your Honor, indicated union and the leaders have agreed that all of these regulations —

Byron R. White:

Well you wouldn’t suggest for a minute that there is — that if you assume that these independent leaders are — these leaders are independent businessmen and not employees, what you have here is an arrangement between the union and some employers.

I don’t know how else you can talk about it.

You can say, well, they didn’t agree, we just coerced them into it but you really don’t — do you really seriously contend that for purposes of section one that this isn’t a combination?

Ronald Rosenberg:

Yes You Honor because of the finding —

Byron R. White:

Well, how can you if you assume these gentlemen are quite willing to assume in this case that these leaders are independent businessmen.

Ronald Rosenberg:

Because this is not the kind of combination that —

Byron R. White:

Well, wait a minute.

That’s another question.

I understand that you’re relying on the exemption.

I’m not for a minute asking you to concede that this violates antitrust laws.

I’m just asking a plain simple question if this is a combination for a purpose of analysis under Section 1.

If it isn’t, you don’t even either get to your exemption.

If it is, you do need to and as I understand that you’re relying on your exemption.

Ronald Rosenberg:

We are relying — I’m really on the exemption because there’s no combination with any non-labor group.

The reason that the leaders are in the union is because of the job and wage competition which make —

Byron R. White:

I know, but that’s the part of spelling out your exemption saying that, well there are independent businessmen that will treat them as a labor group rather than a non-labor group because the exemption requires this too.

But you’re suggesting though that the union may take these independent businessmen and agree with them to have this differential on the road and this territorial restriction.

Ronald Rosenberg:

Yes Your Honor.

Byron R. White:

As part of the exemption, opens the labor union.

Ronald Rosenberg:

Because it’s part of the wages Your Honor and when they work on the road like any other musician, they are to receive additional wages because — they’re working musicians.

When they go on the road, they —

Byron R. White:

Well how do you justify the agreement broke (Inaudible)?

Ronald Rosenberg:

Well, the answer there Your Honor is that the so called booking agents are –-

Byron R. White:

(Inaudible)

Ronald Rosenberg:

Pardon me?

Yes they are.

Byron R. White:

The union agrees with them to pay the (Inaudible)?

Ronald Rosenberg:

Yes Your Honor.

That certainly does not violate the antitrust laws.

Ronald Rosenberg:

What we’re seeking in that circumstance —

Byron R. White:

You mean that the (Inaudible).

Ronald Rosenberg:

Yes Your Honor.

Byron R. White:

And how about the agreement (Inaudible)?

Ronald Rosenberg:

Your Honor on that particular point, as you know the Court of Appeals found a total lack of standing and here — and I don’t believe that the issue was presented in the plaintiff’s certiorari petition but here again, there is a relationship.

All that the union has done here will say to its members, don’t accept kick backs from a given group.

There is no combination with caterers.

There’s no agreement with caterers, the union’s own internal regulations.

Byron R. White:

Is there an agreement that the (Inaudible)?

Ronald Rosenberg:

Yes there is by the terms of the —

Byron R. White:

(Inaudible)

Ronald Rosenberg:

Yes Your Honor.

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

As I understand Your Honor, we’re charged with price fixing that the union by setting a minimum amount for each that the leader must charge on what we call the purchase of the music on each particular engagement hasn’t engaged in price fixing.

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

That the union is engaged in price fixing by setting this forth in a union regulation which is adhered to by certain union members called leaders and that in that sense, the union has agreed on a price.

Hugo L. Black:

Minimum of national prize?

Minimum charge whenever engaged in?

Ronald Rosenberg:

This is a minimum of course Your Honor.

It’s a minimum which reflects only the sidemen scale, the performing instrumentalist scale as in writing and the minimum for the leader himself who was a working musician.

That’s —

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

That’s when the union and the so called — its own members.

That’s part of the difficulty in this case Your Honor that the —

Hugo L. Black:

Its own members.

Ronald Rosenberg:

Its own members, yes.

So called —

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

Yes Your Honor.

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

Well —

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

No.

The union regulations can’t reach anyone who is not a member.

The — this is all done by internal union regulation.

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

Pardon me?

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

Well, there are no such agreements Your Honor.

We just don’t reach —

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

Basically Your Honor that the — because they are members and they have become members legitimately.

There’s a charge that they are improperly members of the union and both courts rejected that because of the finding that they are properly members of the union based upon the fact that they compete with our — with other members of the union, we say that we have a right to regulate them like any other members.

They are properly members and —

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

They raise various other issues Your Honor which were disposed of in our favor by both courts below.

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

Well, as I understand, that is basically their contention.

As I understand it, there are a lots of other —

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

Well, they also Your Honor as I understand their complaint — complain that we reach agreements with other — with other people like nightclubs and booking agents and hotel — but in those — with regards to the nightclubs and the recording company, there is an expressed finding that those come — we do not said any price in that circumstance number one, the — and the finding was that these other people are employers and not the leaders so that the leader has lost even the — even the possibility of being the independent employer businessmen in those situations where we have agreements.

He is not because of the nature of his job function or other things.

He is not the employer under those circumstances.

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

Well, he say, they admit that he is a member of the union.

They think that he is improperly a member of the union and they argue that no leader should be a member of the union.

Byron R. White:

But as I understand what you said earlier that even if he is a member of the union, we are approaching this case on the assumption whether it’s true or false.

We are pushing on the assumption that the leader, these plaintiff leaders are independent businessmen.

They are not employees of anybody.

Now —

Ronald Rosenberg:

What club-date-field.

Byron R. White:

What?

Ronald Rosenberg:

In what we call the club-date field.

And that field alone —

Byron R. White:

I understand that.

What would you say if the independent — this so called independent leaders who lead all the time and never they play.

What if these gentlemen have formed an association of the association of independent leaders and they have arranged to set their prices that they were going to charge to those who purchase music and they did have an agreement like this among themselves.

What about that under the antitrust laws?

Ronald Rosenberg:

That would be outside in terms of labors exemption —

Byron R. White:

Well I know, these same, now wait a minute, these same independent businessmen can exempt that can have this sort of an agreement exempted nearly by joining the union.

Ronald Rosenberg:

No, not nearly by joining the union but by belonging to a —

Byron R. White:

But the union can exempt by having them join them, is that it?

Ronald Rosenberg:

No.

It’s not the joining of the union Your Honor.

It’s the existence of job and wage competition with the union’s employee members.

It’s the threat that these people present to the union, to the sidemen who are admitted employee.

Byron R. White:

Well let’s the association that I talked about.

Association of Independent Leaders, they formed an arrangement among themselves to set prices that they would charge for purchases of music and on this side, they went to the union and said, “Look, this is our — this are our prices.

Is this alright with you?”

And the union said, “Fine.

As a matter of fact, we would like to regulate your prices very much.”

So they have an independent agreement between the union and this association of independent businessmen to set prices.

Ronald Rosenberg:

That of course was not the situation before Your Honor.

Byron R. White:

I know but what would you say about that?

Ronald Rosenberg:

I would say that that’s a violation but because you have the critical element the fact that the union’s regulation is predicated upon the existence of job and wage competition.

The competition with the employee members and that —

William J. Brennan, Jr.:

Well suppose these leaders were not in fact members of the union, would you still be making the argument you are today?

Ronald Rosenberg:

Oh yes, certainly Your Honor.

William J. Brennan, Jr.:

Even if they were not members of the union.

Ronald Rosenberg:

We would have the right to seek and to have them do this, yes, but because they are in job and wage competition.

Ronald Rosenberg:

Your Honors, this is really precisely what was involved in the Oliver case that particular line of analysis because in Oliver, there was no indication that the owner operators were members of the union and yet the union was setting a price that the owner operator was to charge back to the – of the truck.

Byron R. White:

But you were agreeing there with an employer, you didn’t permit and attempt to — attempt to tell the employer you’re making a collective bargaining contract with what he’s going to sell his merchandise for.

Ronald Rosenberg:

No but we did by an agreement with him to determine what another independent —

Byron R. White:

You could’ve agreed with him what his labor cost was going to be or what some of his applied cost are going to be.

Ronald Rosenberg:

But we do not —

Byron R. White:

What is element purchase sales price for public was going to be?

Ronald Rosenberg:

What we did in that particular instance, the union was setting the sales price of the owner operator because it was reaching the price of the truck.

Byron R. White:

Well it doesn’t have to be what you’re doing here.

Ronald Rosenberg:

I believe it’s precisely what we’re doing here Your Honor.

We’re setting an amount that as a minimum which is intended to assure that the leader receive the amount that he gets for working as a performing musician.

Abe Fortas:

Suppose you had a firm to render electrical service — service electrical fixtures in home and businesses and let’s suppose that the talked person in that firm, the head of that firm was a working electrician.

He went out on jobs with his mandate and let’s suppose that all of the members, all of the men who work for that electrical service company belonged to a union, now could the union fix a price that the firm would charge for coming out to or going out to your house and installing a floor plug.

Let’s take that simple illustration of that sort.

What’s your answer?

Ronald Rosenberg:

The answer is, where the man is coming himself working as an electrician, taking work away that the union if it’s necessary can set a minimum price which will assure that the man will receive in his own pocket the minimum wage that the union set for that type of work.

Abe Fortas:

So your answer to my question is yes.

Ronald Rosenberg:

Yes Your Honor.

Abe Fortas:

You don’t contend that there’s any case that this Court’s decided that supports that proposition?

Ronald Rosenberg:

Yes Your Honor.

The Oliver case makes clear–

Abe Fortas:

Do you think that — do you think that case instead was a proposition?

Ronald Rosenberg:

Analytically Your Honor, it makes clear that where the union is attempting to set a price in order to assure that the wage scale is not subverted then that is not a constitute of violation of the antitrust law.

Abe Fortas:

Well, it’s your issue though.

Ronald Rosenberg:

Pardon me?

Abe Fortas:

I say that’s your issue.

Ronald Rosenberg:

Thank you.

Hugo L. Black:

Well that gives me most of the case to decide for New York —

Ronald Rosenberg:

No Your Honor, the Allen Bradley case to which you’re referring involved a conspiracy in which a union came to the aid of already existing conspiracy.

Both courts below here rejected the notion that out of this case approached the Allen Bradley posture.

They both rejected the notion that there was a conspiracy.

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

But only through a very indirect fashion and only through creating —

Hugo L. Black:

(Inaudible)

Ronald Rosenberg:

No, I think that Justice Fortas made it in quite a direct situation where the electrician is in fact working on the job and on those circumstances in that limited —

Hugo L. Black:

Suppose that the electrician has an organization about – some of these electricians settled together and they’re the ones to use it?

Can you say that —

Ronald Rosenberg:

Certainly not Your Honor.

The essential element here is the fact that these people are working at the trade and there —

Hugo L. Black:

This electrician is of less importance to them.

Ronald Rosenberg:

Our regulations are limited to those situations when he is working at the trade and we do what is —

Hugo L. Black:

You could bring it if you want to and you could come up with our condition of the comparison to fix your problem, would you have to say that?

Ronald Rosenberg:

If he is in job and wage competition, he may legitimately be sought as a member of the union.

Yes Your Honor.

Potter Stewart:

Was in the case of Sand against The Tire Layers Union, Justice Brandies’ opinion, that didn’t involve any claim of antitrust violation.

Ronald Rosenberg:

No Your Honor.

Potter Stewart:

Just reading it and I can’t find it.

Ronald Rosenberg:

No.

That was involved under Wisconsin’s little Norris-LaGuardia Act.

Potter Stewart:

Right.

Well, I know what the basic issue was.

There’s no antitrust claim in that case.

Ronald Rosenberg:

No sir, Your Honor.

Thank you Your Honors.

Godfrey P. Schmidt:

May it please the Court.

First, I would like to emphasize Your Honors that I do not represent most of the people in the spectrum of employers in this field to which Judge Friendly refers in his descending opinion.

I quite agree with Judge Friendly that there is a varying spectrum beginning with the kind of person who files as an orchestra leader, maybe once or twice a year because some friend or relative asked him to serve as an orchestra leader, and the kind of orchestra leader represented by Benny Goodman who is a named band leader.

Now, the people that I represent are professional orchestra leaders.

They never work as sideman with one rare exception and that is true even of named band leaders.

Stan Compton is perhaps one of the famous named band leaders in the country and he admitted that he had someone substitute for him when he was ill — right on this record.

But —

Hugo L. Black:

I don’t want to interrupt you but —

Godfrey P. Schmidt:

Surely.

Hugo L. Black:

But I’d be glad if you could state what I asked him earlier.

Godfrey P. Schmidt:

I would be happy to do it right now.

Yes.

Hugo L. Black:

With no charge.

Godfrey P. Schmidt:

My charge.

Hugo L. Black:

(Inaudible) divide among themselves or take it with them?

Godfrey P. Schmidt:

No, it is not limited to that.

That indeed is one of the points of my charge that union members have combined by means of the bylaws with which they comply and that is to say as thank you.

I’m sorry if my voice breaks every now and then but I just got up from a cold.

I am not — I’m saying that indeed, the orchestra leaders in the class that that I represent, the professional orchestra leaders have agreed by these bylaws among themselves to fix prices and never to compete below those prices.

And Your Honors, there’s not one — evidence in the record to contradict that but I go beyond the members.

I go to for example, the booking agents.

Obviously, the booking agents are important for named bands and for named bands that haven’t had even national reputations but Local reputations.

That’s one of the outside groups that I’m talking about.

Then I talk about hotels, nightclubs and restaurants.

Take for example the situation that prevails in New York City.

Local 802, every so and so often negotiates with representatives of the hotels, nightclubs and restaurant and presumably, the negotiation is confined to the employees, the hotels, nightclubs and restaurant.

That’s what it appears in the surface.

But Your Honors, that isn’t true and the facts in this record are contradicted on that point.

Every one of my clients performs in one of the other — of hotels nightclubs and restaurants in the City of New York but they must comply even in single engagements with the standards, the wage turn out — wages, house and working conditions, fixed by the hotels, nightclub and restaurants and the union.

Mind you, they were not ready to these negotiations in anyway.

They didn’t even have notice on them but the negotiations at that time were now applied to my clients, the same is true of when we say radio, television.

The radio and television contract is negotiated with the big companies.

All of the smaller companies then follow — the union prints a contract and they all have to sign it and when my clients perform a single engagement and they don’t do it often, I will admit.

When my clients perform a single engagement on radio or television, they must comply with the negotiations — negotiated standards between the big television or radio stations and the — now, I want to say too Your Honors that my complaint from the beginning, urge the fundamental distinction between said steady and single engagements, no other.

As a matter of fact, Your Honors can look in vain through the bylaws of the international or the Local to find any reference to club-dates.

Club-dates are just one department, the largest department that I would admit has single engagements and when the court below ruled on price fixing for example, it did not use the words club-date.

It said orchestral engagements so that it covered both single and steady engagements.

Godfrey P. Schmidt:

Now, it would be easy, I think, on the basis of this record to be confused by the fact that there are — there were testimony from a variety of different types of orchestra leaders.

On the union side, the union did not produce one single witness who was a professional orchestra leader, not one.

That is to say one who gave his full time to being an orchestra leader never played his assignment, and they are the only people that I represent.

I don’t have to go into the status of this other margin of the type of orchestra leader because I’m not concerned with them.

My own disposition is to believe that even they are employers pro tonto but that’s not essential to my case here and I think that when Mr. — when Judge Friendly in his dissenting opinion below spoke in terms of interchangeability, he was talking about the kind of orchestra leader that I don’t represent.

I have no doubt that Max Sanso who testified that during the three years, he had eight or nine engagements.

I have no doubt that he could improvise orchestra at any time and that he would be interchangeable in that with other employee musicians.

That isn’t the point.

I’m talking about the kind of orchestra leader who is the professional and he is vastly different from the employee sideman because he is the risk taker in this situation.

It isn’t as the — my adversary’s briefs reported and that as Mr. Rosenberg just put it that the usual procedure is for purchaser of music to approach of musician.

No Your Honors, the usual procedure is for my clients to run up telephone bills of $4,000.00 and $5,000.00 a year when they read in the newspaper about fourth coming social events.

And they solicit and when they have — didn’t have that kind of solicitation, in the end accumulated the kudos that comes with reputation then people come to them and call them up.

They never go to my client’s sideman and ask them to get together in orchestra.

And when my client stands before an orchestra, they do one or three things.

Some of my clients like Charles Peterson had never play an instrument.

He simply conducts and leads but most orchestra leaders who are in the class of professional orchestra leaders do in fact play an instrument but they play it differently Your Honors than the ordinary sideman.

In the first place, the sideman plays continuously.

The orchestra leader leads by playing.

He bows his head.

He makes gestures.

He gives emphasis and in that way, he keeps the ensemble, he denotes the tempo and so on and he is in charge.

He is perfectly obvious I think to anyone that knows anything about orchestra performances that if they were all to play at random, even the same piece, they couldn’t even keep time.

Someone has to be there to lead them and that is what my clients do.

Byron R. White:

Well, do your clients in this case play instruments?

Godfrey P. Schmidt:

Do they play an instrument?

All but Peterson.

Peterson does not play an instrument.

Byron R. White:

If Peterson leads all the time, he never plays an instrument.

Godfrey P. Schmidt:

Never plays an instrument.

Byron R. White:

So we have to at least get phase up to the professional leader who never plays.

Godfrey P. Schmidt:

Oh yes, there are quite a few of those.

As a matter of fact, some of the most successful ones today, no longer play an instrument and all of my clients Your Honor, refused to play an instrument when the orchestra is eight men or more.

If the orchestra that they assemble is eight men or more then they confine themselves only to leading either with a baton or with their hands.

William J. Brennan, Jr.:

Did you say Mr. Schmidt that none of your clients could get an engagement in a hotel, nightclub and so forth in New York City unless he is a member of the union, did I understand you to say that?

Godfrey P. Schmidt:

I didn’t say that but it’s practically true Your Honor because whenever an events of any kind, the required music are arranged with the banquet manager of the hotel and that’s in the record undisputed.

The banquet manager of the hotel tells them, you better have only AFM members otherwise you’re going to have later trouble.

And in that way —

William J. Brennan, Jr.:

I know but what do they say?

You have to make your piece Mr. — speaking not only of your clients.

Godfrey P. Schmidt:

Yes.

William J. Brennan, Jr.:

Mr. Leader, you have to be satisfied to the union before we can employ.

Godfrey P. Schmidt:

Yes, there is a specific provision in Local 802 bylaws that says that the executive board of Local 802 must approve each orchestra leader and it reserves to itself the right to cancel the contract.

William J. Brennan, Jr.:

Yes, but what about the — does this union here have an agreement with any hotel to the effect that the hotel will hire orchestras only if the leader and the members are — members that are associate — affiliated with the union.

Godfrey P. Schmidt:

They don’t Your Honor have a written agreement containing that verbiage expressly.

But that’s the way it’s enforced.

In other words, they do have written agreements with the hotels, nightclubs and restaurants and the hotels, nightclubs, and restaurants cooperate with the union by telling all of their patrons, you must have AFM members.

William J. Brennan, Jr.:

Well then I gathered that your clients are the ones who have been expelled from the union could never get a job with a New York hotel.

Godfrey P. Schmidt:

They couldn’t get a job as an employee or —

William J. Brennan, Jr.:

No, as a leader.

Godfrey P. Schmidt:

As a leader — Your Honor, I must say that there are some few cases where leaders are employees.

I don’t represent them and I thought you’re referring —

William J. Brennan, Jr.:

No, your clients, your clients.

Godfrey P. Schmidt:

My clients?

They — in all probability, they could not get a job but there might be some cases in some hotels that are not as careful about that and wouldn’t object to it but I know that there’s always trouble when they don’t belong to the union and that’s the reason why two of the plaintiffs here, Peterson and Carroll for —

Byron R. White:

Do you at least know whether or not you’re any of your — your clients have been expelled from the union.

Have they been playing in New York nightclubs and hotels since they’ve been expelled or not?

Godfrey P. Schmidt:

Some — in some places, yes and in some places, no.

Byron R. White:

There must not be any, any flat rule that leaders who aren’t members of the union may not get an engagement in a New York hotel.

Godfrey P. Schmidt:

No Your Honor.

You must understand that by virtue of an agreement in front of Judge Friendly, my clients, Peterson and Carroll agreed that they’re with the union, that their orchestras could perform in this hotels, nightclubs and restaurants, provided Carroll and Peterson did not actually direct them or play an instrument while directing them.

Godfrey P. Schmidt:

So that was a provision of —

Byron R. White:

You mean, they could never lead there.

Godfrey P. Schmidt:

That’s exactly a point.

Byron R. White:

They could book the engagement —

Godfrey P. Schmidt:

That’s right.

Byron R. White:

— but they have to hire a leader.

Godfrey P. Schmidt:

Yes Your Honor, yes Your Honor.

William J. Brennan, Jr.:

What was this negotiation that you said earlier Mr. Schmidt?

It wasn’t even that was going on — you said, I thought was not even known to your clients.

Godfrey P. Schmidt:

Right.

William J. Brennan, Jr.:

And this was altered in an agreement.

Now what is this agreement you’re talking about?

Godfrey P. Schmidt:

That’s called the hotel agreement.

William J. Brennan, Jr.:

Well, what is it?

What terms of that agreement have any bearing in the issues we have here today?

Godfrey P. Schmidt:

Well Your Honor, the terms of that agreement provide for example for payment into a welfare fund.

We have challenged the first welfare fund and had been successful and that having it dissolved.

We are presently challenging the current welfare fund but that case hasn’t been decided yet.

It hasn’t been brought to trial.

But one of the terms of that contract would be that my clients must contribute to this welfare fund, negotiated between the hotels and my client — and the union.

William J. Brennan, Jr.:

That is must make that contribution even though they are not member of the union?

Godfrey P. Schmidt:

That would be true even if they’re not members of the union, yes Your Honor.

And as a matter of fact, many of the purchasers of music who are admittedly not employers at all of the sidemen are making contributions today to the Local 802 steady engagement welfare fund.

William J. Brennan, Jr.:

Well what — is there anything at all in the agreement?

I gathered what you said to Justice White a few minutes ago that there is not just to be sure.

Is there anything at all in the agreement by which the banquet manager of the hotel agrees that he will not employ as — or purchase music through a leader who is not a member of the union?

Godfrey P. Schmidt:

Not at the present time Your Honor.

There was originally such an agreement and I believe it was brought after the institution of our action that that was withdrawn.

But despite the fact that the language is absent in today’s contract, the banquet managers admitted when they took the stand, we had I believe five of them.

William J. Brennan, Jr.:

You said as a practice that’s where it works.

Godfrey P. Schmidt:

That’s right?

William J. Brennan, Jr.:

My next question is, is there anything at all in the agreement which — by which the banquet manager agrees that he shall pay a certain minimum price?

Godfrey P. Schmidt:

Oh yes.

That was —

William J. Brennan, Jr.:

What’s that?

Godfrey P. Schmidt:

Well that’s the minimum price which is made at the so called price meeting of Local 802.

William J. Brennan, Jr.:

So even if one of your clients is willing to take the job for something less, this requires your client to take the price that’s specified in the agreement of the union with the hotels?

Godfrey P. Schmidt:

Oh yes Your Honor.

Abe Fortas:

But it’s not really a price is it Mr. Schmidt?

Is there anything more than an agreement by the hotel or the club or the person giving the party to pay a certain minimum wage to the sideman and the certain and specified wage to the leader, that wage including a sideman’s pay plus something on top of it.

Is that the way it works?

Godfrey P. Schmidt:

I don’t think that’s quite a fair way to point Justice Fortas — may I —

Abe Fortas:

I want you to state it as precisely as you can.

Godfrey P. Schmidt:

I will.

The price list booklet of Local 802 isolates 11 items which are the ingredients of price.

First, wages which they unilaterally prescribe without collective bargaining.

Second, minimums which are minimum employment quotas and they too are unilaterally prescribed by the Local 802 Executive Board.

Abe Fortas:

What does that mean?

Godfrey P. Schmidt:

Well, that means that for example the grand ballroom of the Waldorf Astoria Hotel —

Abe Fortas:

You’ve got to employ a certain —

Godfrey P. Schmidt:

— must have 12 musicians including the leader, including the leader because the leader is counted I this minimum quotas.

This is a little different from the average case where a union’s bylaws, fixes regulations for minimum quotas.

Abe Fortas:

Alright, what’s the next one?

Godfrey P. Schmidt:

The third one is the leader’s money.

That is to say for clients like mine will always have three or more musicians at least.

That means they get double — they must get double the money that the sideman gets for what is called the leaders fee and they have no right to waive that.

They may not wave it but it will be brought up on charges if they waive it.

The fourth is —

William J. Brennan, Jr.:

Wait a minute, who will be brought up on charges?

Godfrey P. Schmidt:

The leaders will be brought up on charges.

William J. Brennan, Jr.:

Even though they’re not members of the union?

Godfrey P. Schmidt:

Well, yes in one sense only.

I have had cases where my clients were expelled from the union and I thought, well, exposure from the union meant that they were no longer members but they were brought up on charges nevertheless as expelled members.

Abe Fortas:

Now, what’s the next one?

Godfrey P. Schmidt:

The fourth one, cartage fees.

For example, a double base is a bulky instrument and therefore, a certain amount of extra charge for that.

Abe Fortas:

What’s next?

Godfrey P. Schmidt:

The fifth is mileage fees.

Now, here’s something that’s very distinctive.

If my client Ben Cutler who is nationally known as an orchestra leader, books for engagements in Chicago, he must book that each one of those engagements have the price indicated by these ingredients I’m describing.

But obviously, the mileage fee is only taken care of once because you try to go there only once and play four engagements and come back.

But the union regulation requires that you multiply the mileage fee four times so that each one of the persons for whom he performs must play the mileage fee.

The next is the 8% surcharge which the union explained as something does defray the bookkeeping cost and the social security and so on.

Abe Fortas:

That’s paid through the leader.

Godfrey P. Schmidt:

That’s paid to the leader.

He must charge that to his purchaser of music.

The seventh is lodge, I mean that uniforms where he does require them.

The eighth is food and lodging according to certain standards fixed by the union.

The ninth is transportation costs which are supposed to be according to the Form B contract and I might say here that the union prescribes the form of a contract that my client as a businessman and employer must use in dealing with his purchasing.

Abe Fortas:

Alright, any more?

Godfrey P. Schmidt:

The tenth is the 10% traveling surcharge up to a certain point in the beginning of 1964, and that was a 10% addendum to the price because of traveling.

But now, it is called the 10% wage differential.

And of that, the Court of Appeals said that it is a price differential in actuality.

And the eleventh is the contribution to the welfare program.

Now, these —

Abe Fortas:

Is that all of them?

Godfrey P. Schmidt:

That’s — that’s all of them, yes, Your Honor.

Abe Fortas:

Now, the union book does refer to those as price.

Is it?

Godfrey P. Schmidt:

The union — I don’t know how to answer that, Your Honor because during the trial, the union attorney took the position that the words ‘price’ and ‘wage’ were interchangeable.

Abe Fortas:

Now, would you agree Mr. Schmidt that one of our questions is whether all of those are appropriately part of the wage agreement and the wage contract, or whether in fact they should be regarding it as a fixing of the price for a totality of a commodity or service in antitrust terms?

Godfrey P. Schmidt:

I think some of them pertain to price.

Abe Fortas:

That — that’s one of our issues, is it?

Godfrey P. Schmidt:

Right, yes, Your Honor.

Abe Fortas:

Alright.

Godfrey P. Schmidt:

Yes, Your Honor.

William J. Brennan, Jr.:

Now, let me get it clear, Mr. Schmidt.

Godfrey P. Schmidt:

Surely.

William J. Brennan, Jr.:

You’re telling us that in New York City, one of your clients who’s offered and engagement at any hotel or night club that is a party to this agreement with the union has to take from the hotel, whether he wants that much or not, a sum of money which is the total of all those items.

Godfrey P. Schmidt:

Yes Your Honor, when the — when the hotel hires him.

But if one of the customers of the hotel, that is to say, one of the — some association who wants to run a dinner dance, then he — then the association must be charged with this amount.

And the witnesses —

William J. Brennan, Jr.:

Well, I know, but the association must be charged this amount by the hotel, is that it?

Godfrey P. Schmidt:

No, no, by my client in that case.

Abe Fortas:

I suppose Mr. Schmidt, it’s arguable.

Although I didn’t hear your brother make the argument, I suppose it’s arguable that the Oliver doctrine has — is not relevant here because here, you don’t have anything that is not conventionally, provisionally, etcetera, an aspect of the wage contract.

Godfrey P. Schmidt:

Well, I — I took about four pages I believe in my reply brief to try to distinguish the Oliver case and I take the position personally that it is not relevant here.

Abe Fortas:

Well, I’m suggesting the possibility.

I don’t know.

Maybe it’s not relevant because you don’t have to go as far as Oliver does if you regard all of these items that you’ve talked about here as conventional and provisional part of the wages.

Instead of paying the man $50.00 a day, you pay him $20.00 and then you add on all of these other items.

Godfrey P. Schmidt:

Oh, I don’t think that you — you can merely baptize these items as wages and then say, you see, it’s nothing but a wage question.

I think you have to be realistic.

This is a matter of — of —

William J. Brennan, Jr.:

Well, what — what label would you use, Mr. Schmidt?

Godfrey P. Schmidt:

I beg your pardon?

William J. Brennan, Jr.:

What label would you use?

Godfrey P. Schmidt:

Well, I would say that for example, some of those items are clearly part of pricing and some are wages.

For instance, the unilaterally prescribed wages, I can’t say that that’s part of — that’s pricing as such, but I do object to the manner in which they do it.

They unilaterally prescribe the wages but when you have leader’s money, when you have the 8% surcharge, when you have the cartage, when you have the minimum quota of employer — employees where the minimum quota includes the employer himself, then I say these are all ingredients of price and not of wage.

Godfrey P. Schmidt:

That’s what I mentioned, Your Honor.

Now, I might say too that it seems to me that the significant question on the item of whether or not my em — my clients are employers and every one of the people I called, every single one of them testified in effect that my clients were employers, but the significant question is not whether these employers do certain things which are similar to things done by the union.

They’re not exactly the same because by that token, a glassblower employer, an electrician employer, any kind of employer, including the president of General Motors, he certainly does certain things that some employees can do or does certain things that are similar to what employees do.

The important question is, are they businessmen with independent businesses and are they employers?

And I say there’s nothing in the record to contradict the repeated testimony that my clients are employers and independent businessmen.

Now, we come to the — another question, and that is a strain that goes through all of my adversaries’ briefs.

They keep talking about job and wage competition, and this was true in — during the trial constantly, but no one, including the courts below or my adversaries ever took the trouble to analyze precisely what is meant by competition in these circumstances.

And as I see it, there are only seven possibilities.

First of all, the competitors must necessarily be, if I understand them correctly, orchestra leaders like my clients who are entrepreneurs, and employee musicians who are union members.

Those are the two competing bodies.

Now, for what can it be realistically stated they compete?

Well, it’s conceivable that these two would compete for jobs as leaders, and I don’t think that there’s any union that should have any right to regulate whether a sideman should compete for a job as a leader, or any association of leaders to regulate whether a sideman should compete as leaders.

And incidentally, Justice White, there is an association here, a National Association of Orchestra Leaders, and they do not fix prices.

Byron R. White:

But I would suppose the union would claim that if that national association wanted to bargain with the union or the union wanted to bargain with that national association, that they could bargain and execute a collective bargaining contract in which the wage is to be paid by the members of the association to the sideman, etcetera, would be — could be fixed.

And I would suppose they would have to claim since their claim in this case in effect that is part of that collective bargaining contract, the association and the union could agree as to what the ultimate crisis the members of the association would charge for single engagements or extended engagement.

Godfrey P. Schmidt:

Well Your Honor, if I can approximate —

Byron R. White:

Then that claim wouldn’t be any different than what it is here.

Godfrey P. Schmidt:

That’s right because — because we did have one session between the representatives of the National Association of Orchestra Leaders and this union, and one of the things that we told them we couldn’t do with them is fixed prices, which they wanted to do.

Byron R. White:

Well, this — it seems to me like membership in the union is by independent businessmen — independent leaders is really in effect the collective bargaining contract between them and the union.

Godfrey P. Schmidt:

Well, if it — if the — I don’t believe it is really a collective bargain —

Byron R. White:

It serves the same purpose.

Godfrey P. Schmidt:

If — it might serve the same purpose but you certainly not arrive at the same way.

Byron R. White:

I agree with you.

Godfrey P. Schmidt:

Because my clients have no word in it.

Byron R. White:

That’s right.

Godfrey P. Schmidt:

You understand.

Well, as I say, competition for jobs as leaders is really nothing except competition for entry into the ranks of employers, and I don’t think any union or any employee association has the right to close the door on that.

The second type of competition would be for jobs as sub-leaders.

Now, I might say that a sub-leader is a kind of supervisory employee musician who takes over the direction and control of an orchestra when the employer himself can’t attend.

This institution of sub-leaders is very limited throughout the United States.

Godfrey P. Schmidt:

I suppose it has its greatest scope in the city of New York.

But in Boston, Philadelphia and Chicago, I think there are a few.

But they are definitely supervisors within the meaning of the National Labor Relations Act in my opinion, and I have always taken the position that if Congress saw it fit to exclude from the bargaining unit or from the union that has organized the employees, the supervisor afore certiorari, then employers like my clients should not be in the union.

Abe Fortas:

What do they supervise?

Godfrey P. Schmidt:

They supervise the conduct of the particular engagement.

They conduct the orchestra.

They watch to it — they see to it that all of the amenities of social intercourse are observed.

If an orchestra leader — orchestra member were to become drunk, they have the power of firing right on the spot or order him home.

You know, they stand in the place of the leader during the performance.

The third kind of competition would be for — for jobs as sub-leaders.

Now — I mean, for jobs as sidemen.

It should be obvious that professional orchestra leaders who command much more of income than either sub-leaders or sidemen are not competing for jobs as sub-leaders or as sidemen.

My clients — there was no evidence whatever in this record to show that my clients ever competed for jobs as sidemen or as sub-leaders.

And that could be competition for musical engagement contracts.

That would be more or less in the way of acting as a broker or a man says I’ll — I’ll get you the band or give me the contract and I’ll see that the performance is carried out alright.

But he himself is neither a musician or if he is, he doesn’t perform.

That kind of competition wasn’t mentioned in our record.

The four — the fifth is competition for the income of professional leaders.

And again, that — there was no mention of that in any part of the record.

The sixth, well, competition for wages of sub-leaders, supervisors not mentioned at all in the record, and seventh, competition for wages to sidemen.

My clients never competed for wages of sidemen, but there was no evidence of that up to that point at all.

Now, I think that it’s important to emphasize briefly that Judge Levet at the trial court, when he talked about named bands assumed that named bands had to be organizations of national reputation.

I submit that the evidence in the record here is undisputed that a man can have a named band in the city of great New York or in the environs of New York and not being known in Washington.

So that the whole question of name is a very relative thing, except that there are indeed a 20 or 30 named bands that command towering prices and great audiences, and they are known to practically everybody.

A question was asked about whether — if one of my clients were to come to Washington and play an engagement here with his orchestra, he would be subject to filing requirements here with the local here.

The answer is of course yes.

In other words, he would have to file his contract for a single engagement here in Washington and the local here in Washington reserves the right not to approve it.

And if the union here does not approve it, he simply can’t play here.

This is done regularly.

And the territorial restrictions are very numerous that are imposed unilaterally by this union and abided by all of these outsiders.

Godfrey P. Schmidt:

For example, one of the provisions in the bylaws is that since our institution of the suit has been eliminated was a provision which actually told the leader that he had no right to borrow money to advance the business of his own orchestra unless he got the permission of the president of the international.

Then of course, if one of my clients were to book an — a steady engagement in Chicago, for example, he would not be allowed to book any single engagement during the period of that engagement and he would not be allowed to book it for a period of five days before or five days after.

And he couldn’t even book it if he booked it during that period to be performed six months later.

And many of the locals with the approval of the international seek to protect the local musician, the local orchestra leader from competition by orchestra leaders who invade.

And of course, the — one of the most important territorial rules is that whenever one of my clients comes from New York and visits another jurisdiction where the prices and the wages are lower, my client is bound by the higher of the two.

In other words, since the Local 802 rates are generally speaking throughout the United States the highest rates in the industry, my client, if he goes to Newark, New Jersey for example, must compete with local musicians there on the basis of the higher New York prices against the lower Newark prices.

The —

Abe Fortas:

Well your action is solely against the New York local, isn’t it?

Godfrey P. Schmidt:

Oh no, Your Honor, because many of the price fixing lists appear right in the — the bylaws of the AFM itself.

If Your Honors were to examine the bylaws as they prevail at that time, you would see all sorts of prices, not wages, prices fixed for also — for instance, at a carnival or a rodeo or something like that.

Now, since that time, the latest bylaws that I’ve observed has kind of circumvented that difficulty by saying write to the office of the president for the prices on this, and they’re not set forth.

But the point is that they are nationally fixed in some industries, radio and television being a pair of them.

The — I want to make sure that I answered Justice Black’s question continuously now, and that is we claim that the violations of the — of the Sherman Act take place in the following ways.

One, all of our locals here, all of the AFM locals and the AFM itself have regulations which impose obligations on all members, including orchestra leader employers, that they can never compete at prices below the prices fixed by the respective locals or by the international.

They — Article 25 of the AFM bylaws requires every booking agent to get a license before he can operate as a booking agent.

And it also forbids any orchestra leader to make use of the services of a booking agent unless he is licensed by the AFM.

Now, the AFM reserves the right to vacate the license of the booking agent for a good reason, a bad reason, or no reason at all, and without notice.

And it requires the booking agent to sign a contract that he will — all his negotiations observe the bylaws of the federation and of the local involved.

And finally, the — one of the most effective means used here for violating the Sherman Act is the use of the Form B contract.

Now, I might say that since this trial, Local 802, because of the constant thunder of criticism that we leveled at the Form B contract, to which I’ll come in a minute, has dropped that Form B contract and published another.

The other one made explicit what was implicit in the Form B contract.

So we immediately moved in the United States Court of Appeals for an injunction against it because it fixed prices and we obtain that.

Thank you.

May it please the   court.

One of the indications of the matter in which professional leaders garner most of the important business was provided by one — three exhibits introduced by the defendants themselves, defendants’ exhibits L, M and N.

And one of those three showed for example that 4.9% of the persons who filed contracts as leaders had gathered into their business 52.4% of all of the contracts for engagements signed.

The status of my clients as employers, contrary to what the District Court found without the benefit of any evidence in the record, remained the same even when they play on radio and television, or when they do recordings.

Certainly, it should be obvious that a named band leader for example doesn’t change his status as employer simply because he makes a recording with his own musicians.

It is true nevertheless that very few records are today made by orchestras as such.

The day of the big band has somewhat receded.

Godfrey P. Schmidt:

But whenever my clients, like for instance, Sye Zetna, one of them — he made — I’ve forgotten how many albums.

Whenever he performed, he performed with his men so that his status didn’t change.

And Hank Thompson and another one who testified, he’s one of the leaders in the field of country music, he was required at one time by the union rules and by — by the recording company that was enforcing the union rules to stop the system under which he was getting a lump sum of money.

And now, the recording company advanced out of his royalties moneys to pay the employees, so that the money went only because of union rules from the insure — from the recording company to his employees to give the appearance that the recording company is the employer, but it was subtracted from his royalties.

I am challenging those findings of the court below that deal with competition.

I say there’s no evidence to show that there’s competition.

And also, those findings of the court below that say that my clients suddenly lose their status as employer or businessmen when they do recordings or do TV appearances or television appearance because I say there’s absolutely no evidence in the record to substantiate their loss of their status.

Byron R. White:

(Inaudible)

Godfrey P. Schmidt:

Your Honor, I specified them in more — in my brief somewhere, but I don’t remember the number offhand.

Now, I referred before to the Form B contract.

The Form B contract not only is the result of a mandate from the bylaws of the AFM but it is a mandate that is pure fiction and misrepresentation in significant parts.

For example, the orchestra leader who makes use of a Form B contract is required to acknowledge by his signature that he is not the employer but rather the employee of the purchaser of the music.

And yet, that’s done as a matter of form without any relation to reality.

Also, the Form B contract incorporates by reference all of the AFM bylaws and the local bylaws, and it contains the fiction for example that the purchaser of the music hires the sidemen in the orchestra through the agency of the leader.

Then, one of the things that’s incorporated by reference has a particular bearing upon traveling engagements.

You can understand that if an orchestra travels from place to place, they — if he visits Chicago for example and then goes to San Francisco, the Chicago local won’t be able to have jurisdiction over him to file charges of any kind.

Well, in those cases, the federation, the international takes care of all the charges and processes them and adjudicates them by means of the international executive board.

And if there are any fines, as there sometimes are, the fines go into the treasury of the international, the very organization that is adjudicating the case under a pseudo-arbitration system.

The purchaser of the music, even though he is not the purchaser in the ordinary sense, is sometimes subjected to union boycotts and threats in this way.

If an orchestra leader is not a member of the union or if he charges less than the minimum price prescribed by the union and he does that in X dancehall in Oshkosh, then that X dancehall is now put on an unfair list and no other person belonging to the union, whether employer or employee, is permitted to perform there until he’s taken off that list.

And of course, I don’t know whether I stressed before that no booking agent is allowed to book for any musician unless he belongs to the AFM or one of its locals.

I’d conclude with this quotation from the Pennington Case and with a suggestion that what was left to speculation and hypothesis in the Pennington Case is the case that’s actually presented to Your Honors today.

If the UMW, in this case, in order to protect its weight scale by maintaining employer income had presented a set of prices at which the mine operators would be required to sell their coal, the union and the employers who happened to agree could not successfully defend this contract provision if it were challenged under the Anti-Trust Laws by the United States or by somebody injured by the arrangement.

That’s the quotation, and that is exactly the case we have here because price lists, as the president of the local — of the international admitted, are universal.

Every single local of the 683 locals of the federation have their own price lists.

And the federation itself has its price lists on national problems.

Thank you, Your Honors.

Ronald Rosenberg:

May it please the court.

In my opponent’s argument, there are many, many statements made about lots of things that the musician’s union does lots of statements about the nature of various negotiations.

None of these things are in the record and none of them are the facts as they exist.

Ronald Rosenberg:

The facts are as found by the district judge and as confirmed by the Court of Appeals.

And Your Honors, I have before you a distillation of a lengthy trial in the findings of the District Court, an apt description of what occurs in this particular industry.

And the argument that you’ve heard today has very little to do in fact with that particular industry.

Hugo L. Black:

Do you challenge any of the findings?

Ronald Rosenberg:

Do we challenge any of the findings?

No, Your Honor.

There are — there is one or two little matters of — very small concern, but nothing of a fundamental nature.

Their — in my opponent’s presentation today, he made the statement, and I think this really lies at the heart of our case, Your Honors, that the sub-leader stands in the place of the leader.

Now, there was a stipulation that the sub-leader is an employee.

There was also a stipulation that the sideman is an employee.

Now, when this — when the sub-leader stands in the place of the leader, when he performs precisely the same work function, then there is such danger to the wage standards of the sub-leaders and of the sidemen musicians when the leader is permitted to form — perform in an unregulated fashion that the union has the right to reach that particular type of disruption of its wage standards, and that is the basis of our reliance upon Oliver and of our reliance upon Jewell T. and this Court’s expressed recognition in Jewell T. that there are times when the — that it’s not the form of the — of the agreement that is critical.

It’s the impact of the agreement.

And here, the impact of the union’s regulations upon the leader is to preserve the wage standards of the employees, the stipulated employees on this record, the sidemen and the sub-leaders, these — this was stipulated that these people are employees and the critical aspect of the union’s regulation is an attempt to preserve those wage standards against diminution by a leader who works at an amount less than that.

Byron R. White:

What’s the interest of the union in specifying that the leader — leader’s compensation shall be twice that of the sub-leader?

Ronald Rosenberg:

Because the – just as the union has the right to say when a musician plays two instruments, he will receive a certain amount more.

In those fields in which the leader —

Byron R. White:

I don’t think that’s at least but relevant.

Let’s assume that here’s a leader that doesn’t play no instrument whatsoever and he’s a professional leader.

And then, the thing of it is that he has two engagements at one time.

Now, he hires a leader, a sub-leader to take one off him and the other one is leading himself.

Now, what interest does the union get in saying that the leader’s compensation in the — on the engagement where he’s conducting himself should be twice that of what the sub-leader’s compensation is?

Ronald Rosenberg:

Because typically in this field, and it was stipulated, Your Honor, that in those fields in which the leader is admittedly an employee under the findings of both courts below, the — so the recording in television, the leader always receives a — an amount two times.

He always receive twice the —

Byron R. White:

So what’s the union’s interest in saying that it must be twice?

Why shouldn’t the union be satisfied with saying that the leader when he conducts himself, should at least get at least what a sub-leader would get.

Ronald Rosenberg:

That’s no different than the union is saying, is it does, Your Honor, that the — a musician who performs on two instruments shall receive and additional amount.

The leader in playing an instrument and conducting is performing on the job, essentially two types of job.

Byron R. White:

I’m just saying that — I say this is a situation where the leader doesn’t play at all.

He plays no instrument whatsoever.

Ronald Rosenberg:

In that particular circumstance, Your Honor, he does not receive two times.

Ronald Rosenberg:

He receives in the end for himself only 25% because the sub-leader gets the main — gets half of that additional amount under those circumstances.

The leader, when he does not perform, does not receive a full amount.

He in fact turns to —

Byron R. White:

But why is it the union attempt to regulate what this fellow — what the leader charges for his efforts in managing the orchestra, getting the engagement and supervising the whole affair?

Ronald Rosenberg:

Because for a number of reasons, Your Honor.

Number one, the reason that Judge Friendly has signed is because that is very much a part of the musical engagement, and this is essentially a musical function.

The major argument, Your Honor, which is quite different in our — than our argument about whether a leader performs, is that because of the special nature of this industry and as found by the trial court that in this particular industry, wages suffer when the price does not meet the minimum wage of the — the minimum wage scales that the union has set forth.

We’re not attempting to get an increase in wages or anything like that.

What we’re talking about is in this particular industry, as the trial judge found, there’s a direct relationship and that wages do suffer.

Byron R. White:

I suppose that in price competition — price competition in an industry, sever price competition inevitably is going to put pressure below, isn’t it?

But any industry, stiff competition in the automobile industry, I suppose —

Ronald Rosenberg:

Not really.

Byron R. White:

— would be harder for the industry to raise wages or to keep wages.

Ronald Rosenberg:

If there were — if there were findings for the type that were made here showing that there is — that there is scrimping, where there’s scrimping that the wages suffer, than in that particular circumstance a very narrow situation–

Byron R. White:

Well you would say that the union would have an interest in setting the prices of automobiles?

Ronald Rosenberg:

If you had that kind of a record, Your Honor.

Now, that’s very unusual, and what happens is the very unusualness of this industry and the union’s experiences as found by the trial judge are the justification which we point to on this — on this narrow instance where the leader does not perform.

And the other situation, the matter is much clearer.

Byron R. White:

I guess he’s right.

Ronald Rosenberg:

Thank you.