Dawn Crowell Murphy
Dawn Crowell Murphy is counsel with Pillsbury Winthrop Shaw Pittman LLP’s Nonprofit Organizations Practice in Washington, DC
From meetings to membership to ethics codes, associations need to avoid missteps that could lead to complaints of anticompetitive behavior. If you have members who compete with one another, take a moment to review this quick antitrust checklist.
In representing industries or professions, associations bring together people and organizations that compete or have business dealings with one another. Because of this, associations need to be mindful of complying with antitrust laws. Here are some best practices that can help protect your association and your members against allegations or consequences of noncompliance.
1. Policy. Have an antitrust policy in place, disseminate it to foster awareness, and give at least a short antitrust statement at the beginning of board meetings and other meetings where sensitive topics may come up. The policy may include general guidelines, such as avoiding discussions that may tend to raise, lower, or stabilize prices or fees; affect the availability of services or products; allocate markets; or limit or discourage anyone from competing in the industry or profession.
2. Meetings. At business meetings, have staff or other monitors present and alerted to antitrust compliance. Distribute an agenda in advance, keep to it, and maintain meeting minutes that reflect generally what topics were discussed and any actions taken. Particularly if sensitive topics were planned or discussed, have legal counsel review agendas and minutes for any red flags.
3. Membership. Criteria for membership must be clear and objective, with membership decisions based exclusively on the criteria. It is best for the board to set membership criteria but for staff to handle applications and admissions, turning to the board or other volunteer leaders only in ambiguous cases. Having the board vote on admissions based on factors other than the published criteria can lead to claims of “blackballing” if an applicant that meets the criteria is denied admission.
4. Nonmember access. Allow nonmembers access to member benefits if they are essential to success in the industry or profession. This does not mean that fees for nonmembers must be the same as those for members, who have already paid membership dues. But services that involve significant competitive or economic advantage must be available to all.
5. Codes of ethics. Business or professional codes can serve an important purpose, pointing out what is considered fair dealing and what is not. But where code enforcement restrains competition—such as by prohibiting competitive bidding, restricting solicitation of others’ customers or clients, or encouraging boycotting of nonmembers—they can run afoul of the antitrust laws. Because of potential antitrust pitfalls, be sure to consult legal counsel for any activities involving ethics codes.