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Carroll v. American Federation of Musicians of United States

decided: January 30, 1967.


Friendly, Smith and Anderson, Circuit Judges. Friendly, C. J.: (concurring and dissenting).

Author: Anderson

ANDERSON, Circuit Judge:

Plaintiffs-appellants are orchestra leaders who in a series of suits over the past several years, have challenged the legality of numerous activities and regulations of the appellees.*fn1 The present actions instituted by appellants, Peterson and Carroll, in which Ben Cutler and Marty Levitt were allowed to intervene, as claimed class actions on behalf of themselves and as representatives of other orchestra leaders, charged the American Federation of Musicians and its New York affiliate, Associated Musicians of Greater New York, Local 802, with nine separate violations of the anti-trust laws, none of which is protected by either the Clayton Act*fn2 or the Norris-LaGuardia Act.*fn3

The first complaint was filed in July, 1960 and the other, brought to include a challenge to an increase in the musicians' wage scale adopted after the July suit was started, was filed in December, 1960. Both actions sought preliminary and permanent injunctive relief, as well as treble damages for alleged injuries. The district court, sitting without a jury after a trial of five weeks, dismissed the complaints and entered judgment for the defendants. Carroll v. American Federation of Musicians, 241 F. Supp. 865 (S.D.N.Y. 1965). The appeal to this court presents the question of whether various practices of the unions violate the Sherman Act.*fn4

The American Federation of Musicians, an affiliate of the AFL-CIO, consists of 683 local unions and has a membership of more than 260,000. Almost all of the musicians in the United States, referred to in the trade as sidemen, and most of the orchestra leaders and sub-leaders, who act as substitute orchestra leaders, are members of the Federation or its locals. Local 802, with 30,000 members, has virtual control of labor in the music industry in the New York area. The appellants were members of Local 802 when this action was brought, but Carroll and Peterson have been expelled from membership since that date.

Essential to an understanding of the issues presented is a definition of terms and a description of the practices which distinguish the industry.

Musical engagements are generally classified as either "steady," those lasting for longer than one week, or "single," usually one day or one performance affairs but including all engagements lasting less than one week. The much sought after steady engagements are rare in comparison with the number of single engagements.

The predominant form of single engagement is the "club date," such as weddings, parties and dances, which provides employment for the largest number of musicians. Single engagements also include the "non-club date" field, consisting of television appearances or recording engagements, etc. The distinction between the kinds of single engagements is vital; the non-club date engagements are ordinarily governed by collective bargaining agreements concluded by the union and the "purchaser" of music. The same is usually true of the steady engagement field. Local 802 has collective bargaining agreements with the major users or "purchasers" of live music within its area such as recording companies, hotels, television and film producers, opera companies and theatres. These agreements treat the "purchaser" as the employer and the orchestra leader as its employee, little different from a sideman. Indeed, in this field such a characterization would ordinarily be justified, because in the recording industry, for example, in which all engagements are governed by such collective bargaining agreements, a regular employee of the recording company exercises general supervision over the orchestras hired. He selects the orchestra leader, who does the conducting and some arranging, hires the sidemen and determines their number, their instruments and the compositions to be played and exercises general control over the orchestra's performance. The recording company pays each musician, as well as the orchestra leader, individually and is responsible for the withholding of social security, federal and state taxes, as well as all bookkeeping. The practices are similar in most engagements covered by the union's collective bargaining agreements.

The club date field is entirely different in that it is not governed by collective bargaining agreements. Rather, the orchestra leader secures the engagement, either by himself or through booking agents and negotiates directly with the music purchaser, usually for a flat price, and the responsibility for collecting the fee, paying the sidemen, withholding taxes and keeping records is his. His remuneration is the difference between his costs, primarily the wages of sidemen, and the amount received from the music purchaser. The district court assumed, without explicitly finding, that orchestra leaders are employers or independent contractors when operating in this field. In light of the fact that an orchestra leader working a club date is no different from any other independent contractor who employs his own laborers, we conclude, as we have in other contexts in this litigation, see e.g., Cutler v. American Federation of Musicians, 316 F.2d 546, 549 (2 Cir. 1963), affirming 211 F. Supp. 433, 445 (S.D.N.Y. 1962); Carroll v. American Federation of Musicians, 295 F.2d 484, 486 (2 Cir. 1961); Carroll v. Associated Musicians, 284 F.2d 91 (2 Cir. 1960), affirming 183 F. Supp. 636 (S.D.N.Y. 1960), that orchestra leaders are employers in the club date field.

It should not be inferred, however, that orchestra leaders are a homogeneous class. Some of them act only as orchestra leaders, a few of whom employ more than one orchestra at a time. When the leader is not with his orchestra, he employs a sub-leader as his substitute. Others work only part-time in this capacity, accepting whatever engagements they can find, and work as sidemen or sub-leaders the rest of the time. Still others work as orchestra leaders part-time and are regularly employed outside of the music industry. While the majority of leaders' engagements are in the club date field, they also seek engagements outside of it, either in the single or steady date field. Obviously there is a great deal of fluidity in the industry. Very few orchestra leaders employ their own orchestras full-time. The normal practice is for an orchestra leader first to secure an engagement, determine how many sidemen will be needed, and then employ them through the union hiring hall.

Most engagements are secured through booking agents, who since 1936 have been regulated by the Federation and its local unions, because during the depression booking agents took advantage of the job shortages in the music industry by charging exorbitant commissions. Under present union by-laws, union members are forbidden to accept engagements from booking agents not licensed by the union. The licensing agreements limit the commissions of booking agents to 10% for steady engagements and 15% for single engagements; and the agents must agree not to book non-union orchestras or musicians or to book orchestras for engagements at less than the union scale. In the past, engagements were also secured through the owners of catering halls and their employees, for which the caterer received a commission. Present union by-laws forbid this practice.

The Federation exercises rigid and monolithic control over much of the music industry, and this is especially true of Local 802 in the New York area. Within the jurisdiction of the Local, the closed shop is enforced by numerous bylaws, and pressure is placed upon orchestra leaders in various ways to induce them to become union members. For example, union members are not permitted to work in an orchestra in which a non-member leader either conducts or plays or which bears the name of a non-member.*fn5 A non-union orchestra leader may thus operate only if he hires sub-leaders to conduct. This is the situation of both Carroll and Peterson since their expulsion from the union. There are further restrictions which prevent union members from playing for proscribed or "unfair" persons, for instance an orchestra leader who has employed non-union musicians.

Having achieved a virtual closed shop, Local 802 regulates the club date field in great detail. Under its by-laws, member orchestra leaders are required to follow the "Price List Booklet," which is actually a codification of the standing resolutions of Local 802's Executive Board, and it governs all musical engagements not subject to any of the local's outstanding collective bargaining agreements. The booklet characterizes orchestra leaders as employees -- "personnel managers" -- and refers to the purchaser of music as the employer. It contains resolutions which establish the minimum number of sidemen required and the wage scales for the sidemen and sub-leaders in all engagements covered by it, providing with considerable specificity for variations according to the number of performances, the nature and length of the engagement, the establishment where it is played, and similar details.

The price list also sets a minimum for all covered engagements under the title "Regulations for Establishing Leaders' Fees in Single Engagements." These regulations, in fact, establish price floors because the orchestra leader is required to charge the music purchaser not less than the total of his "leader's fees," the sidemen's wages and other fees.*fn6 The leader's fee is a specific percentage above the union wage scale, graduated according to the number of musicians performing. Price floors are set for both single and steady engagements.

As indicated above, the price list is established unilaterally by Local 802.Under its by-laws the Executive Board is authorized to adopt resolutions establishing wages and prices, except where a meeting of the general membership votes on such price list resolutions. Once promulgated, the members must comply with such resolutions.There is no collective bargaining with orchestra leaders concerning the wage scales, price restrictions or other regulations established in the price list. Nor is there any collective bargaining with purchasers of music except, as discussed earlier, in the case of large scale users of music who have standing agreements with Local 802 or with the Federation. Thus, in the club date field, which comprises most of the single engagements, and in many of the steady engagements, terms and conditions of employment, including wages, and minimum prices for orchestral engagements are determined by unilateral action of the union.

Enforcement of the regulations promulgated by the Executive Board is achieved by requiring orchestra leaders to report to Local 802 and by insistence upon the use of the Federation's "Form B" contract. This contract form, characterizing orchestra leaders as employees, was adopted by the Federation in 1941, and is the only engagement contract which a member is permitted to sign. The by-laws also provide that such contracts must be submitted for approval to the local union before the performance. Local 802, however, has relaxed these rules for single engagements by accepting an assurance either by telephone, by letter or by a report in person that the agreement with the purchaser complies with all union regulations and provides for payment of the sidemen according to the union wage scale. It insists, in addition, that all engagements as orchestra leaders first be approved by the Executive Board. In order further to assure compliance with the Price List, Local 802 employs "business representatives" who attend engagements to make certain that all regulations are being obeyed.

In order to protect the job market for local musicians against the encroachments of musicians and orchestra leaders who do not normally operate in the area, the Federation has instituted additional regulations for traveling engagements, which are those played by orchestras and members outside of the jurisdiction of their respective local unions. Formerly such engagements were sought to be curtailed by a 10% traveling surcharge which orchestra leaders were required to pay to the Federation.

After this court held that the tax violated ยง 302 of the Taft-Hartley Act, Cutler v. American Federation of Musicians, 316 F.2d 546 (2 Cir.), cert. denied 375 U.S. 941, 11 L. Ed. 2d 272, 84 S. Ct. 346 (1963), the Federation adopted a price differential plan. The new by-laws require a traveling orchestra to charge, for steady engagements, 10% more than the minimum fee for a local orchestra and, for single engagements, 10% more than the minimum price of either its home local or of the local in whose territory it is playing, whichever is greater. Orchestra leaders performing steady traveling engagements are barred from accepting any single engagements anywhere until after the steady ...

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