Antitrust Compliance Guide Summary

While information-sharing is the lifeblood of many associations, there are topics that may not be discussed among members at meetings, workshops, or seminars, or online chat rooms or networking sessions.

Topics which should not be discussed among members of state and local music teacher associations at association functions (but OK between an employer and employees in a studio, and OK between individuals who are not in attendance at an association function):

  • Current prices or hourly rates;
  • Current billing policies and procedures;
  • What constitutes fair profit margins;
  • Plans to increase or decrease prices or hourly rates;
  • Agreements to allocate or divide territories or clients;
  • Policies regarding vacation time and missed lessons;
  • Terms and conditions of sales such as late charges, prompt payment discounts, credit terms;
  • Recommendations to members to implement unlawful tying arrangements such as requiring students to purchase sheet music exclusively from the teacher;
  • Salaries of music studio employees;
  • Complaints about or problems presented by other competitors or suppliers;
  • Encouraging others to take retaliatory actions against competitors or suppliers, such as a boycott against a supplier that decided to offer music instruction in competition with members; and
  • Efforts to influence suppliers’ prices.

We can no longer share our studio policies with other members in meetings. General discussions of past pricing levels or economic trends in the profession, as well as studio management, are fine as long as members do not share their own methods and experiences or try to influence other members in a certain direction.

Surveys of prices or hourly rates can only be taken by an independent third party, and the data collected must be at least three months old.

How to guard against antitrust liability:

  • Agendas for meetings should be prepared and distributed to attendees in advance of the meeting. A vote must be taken (after possible additions or subtractions from the agenda) to approve the “orders of the day.” Once approved, the agenda cannot be changed except by a two-thirds majority vote.
  • The written antitrust policy for the chapter (or state organization) should be distributed with the agenda at every meeting.
  • Presenters for seminars and workshops should sign a written agreement in which they acknowledge and agree not to discuss any of the prohibited topics.
  • An employee or member should be designated to serve as an antitrust compliance officer at each meeting. His or her primary responsibility is to cut off any discussions that drift into prohibited topics. The Parliamentarian would be a logical person to serve in this position.
  • On-line sites should post rules about the prohibitions and be monitored by a volunteer who takes down inappropriate postings. (Webmaster)

It is important to publicize requirements for maintaining association membership.

Code of Ethics

A Code of Ethics must not impose any anti-competitive restrictions on members. Teachers cannot be restricted from recruiting students. Neither are they encouraged or required to recruit students from other teachers. This is a decision that the individual teacher must make. Teachers may not agree as a chapter to restrict student recruitment among members. The settlement between the FTC and MTNA does not regulate the business practices of individual music teachers.

A teacher referral service should be open to all members who sign up for the referral service. The association may charge a fee for this service. The service may list contact information, but should not list prices charged by teachers. Referrals should be made in an objective manner without favoritism

Competitions and Festivals

Since competitions affect a teacher’s ability to compete in the community, competitions should not be restricted to members only. Student competitions should be open to non-members. Non- members may be charged higher fees, but not so high that it effectively compels a teacher to join the organization. Limitations in the number of students accepted may be made because of practical conditions such as hall size of the number of judges.

The conduct of judges in a competition is a recognized exemption to the antitrust restrictions; a judge may be restricted from soliciting students. A code of conduct for judges may be imposed that limits their criticism of students and teachers in the competition.

Non-competitive festivals can be restricted to students of members since this type of event does not greatly affect the teacher’s competitiveness in the community. [Our former state president, Paulo Steinberg, suggests that the intent of the vote taken and passed by VMTA is to admit students of non-members to all VMTA events, charging an additional fee.]