SRCA ANTITRUST POLICY
(Special thanks to the National Roofing Contractors Association)
The Slate Roofing Contractors Association of North America Inc. (“SRCA”) requires its officers, directors, and members to abide by the terms of this antitrust policy (“SRCA Antitrust Policy”).
1. SRCA participants are not authorized to speak or act on behalf of the SRCA unless specifically granted such authorization by the SRCA in writing.
2. The SRCA is the only party authorized to issue statements or adopt positions (public or otherwise) on behalf of the SRCA. Responses to questions or complaints from the public or from private parties must be handled according to the SRCA’s policies.
3. Persons are not authorized to use the SRCA letterhead or the SRCA’s name or logo without the consent of the SRCA’s Board of Directors, or its designee(s).
4. Agendas for all SRCA meetings shall be prepared in advance, with prior review by an appropriate SRCA officer or director, then followed at the meeting. Topics not included on the agenda shall not be discussed.
5. Only meetings scheduled by the SRCA shall be considered SRCA meetings. SRCA participants shall not participate in private group meetings, or impromptu or informal group gatherings, outside regularly scheduled meetings, to discuss items not on the agenda. No SRCA meeting may be held unless an SRCA officer or director participates in person or by conference call.
6. A secretary shall be appointed to take minutes of all meetings. Minutes shall be submitted to, and reviewed by, the SRCA board of directors prior to approval. Upon approval, such minutes shall become the “official minutes” retained by the SRCA. SRCA participants should not keep their own minutes.
7. SRCA committees can act only within the scope of their authority. Recommendations may be made to the SRCA for other actions to be taken.
8. All SRCA participants shall adhere to the SRCA Antitrust Guidelines, a copy which are attached hereto as Exhibit A.
9. A copy of the SRCA Antitrust Policy (and attached SRCA Antitrust Guidelines) shall be made available to all SRCA participants, and the need to comply with its terms shall be communicated regularly.
Slate Roofing Contractors Association of North America Inc.
Industry organizations and associations are subject to strict scrutiny by both federal and state governments. While such scrutiny should not prevent participation in, and support for, an industry association, members should be aware of, and comply with, certain relevant legal principles. Compliance with these laws does not prevent SRCA participants from lawfully engaging in a wide variety of group activities, as long as the purpose or intended effect of the activities is not to promote anticompetitive activities or to act in restraint of trade or commerce.
A significant law affecting organizations such as the SRCA is the Sherman Antitrust Act, which makes unlawful every contract, combination, or conspiracy in restraint of trade or commerce. The Federal Trade Commission Act, the Clayton Antitrust Act, and the Robinson-Patman Act also are applicable to societies, for they also forbid anticompetitive activities. Furthermore, virtually every state has enacted antitrust laws similar to the Sherman Act.
Between the state and federal laws, there is no organization too small or too localized to escape the possibility of a civil or criminal antitrust suit. It is thus imperative that every SRCA Participant refrain from indulging in any activity which may be the basis for a federal or state antitrust action.
There are four main areas of antitrust concern: price fixing, membership, self-regulation, and standardization and certification. The area of greatest concern historically has been price fixing. The government may infer a violation of the Sherman Act by the mere fact that all or most of the participants in an industry organization or association are doing the same thing with respect to prices or other terms and conditions of trade. It is not required that there be an actual agreement, written or unwritten, to set prices. Rather, price fixing is a very broad term which includes any concerted effort or action which has an effect on prices, terms or conditions of trade, or on competition. Moreover, such concerted actions (affecting prices) cannot be justified by showing that they will benefit customers, or that the prices set are otherwise reasonable.
Accordingly, SRCA participants should refrain from any discussion which may provide the basis for an inference that SRCA participants agreed to take any action relating to prices, services, production, allocation of markets, or any other matter having a market effect. These discussions should be avoided both at formal meetings and informal gatherings. In fact, informal gatherings of SRCA participants could be looked upon with suspicion by the government.
The following topics are some examples of the subjects which should not be discussed at meetings:
1. Do not discuss current or future prices (be very careful of discussions of past prices).
2. Do not discuss what a fair profit level is or should be.
3. Do not discuss standardizing or stabilizing prices or pricing procedures.
4. Do not discuss cash discounts or credit terms.
5. Do not discuss controlling sales or production or allocating markets or customers. (This applies to services as well as products.)
6. Do not complain to a competitor that his or her prices constitute unfair trade practices and do not refuse to deal with a company or individual because of pricing or distribution practices.
7. Do not discuss anticipated wage rates.
Inasmuch as an industry organization’s antitrust violations can subject all participants to criminal and civil liability, SRCA participants should be aware of the legal risks in regard to participation in policies of industry self- regulation. Because participating in an organization can be of substantial benefit, participants must ensure that they do not in any way restrict or prejudice competitors from participating. Nor should they illegally discriminate against non-participants.
Participation policies should avoid:
1. Restrictions on dealing with non-participants.
2. Excluding from participation any qualified participant.
3. Limitations on access to information created by the organization.
There is a substantial risk that standardization programs will be used to restrict competition or discriminate against certain competitors. Thus, the following guidelines should be followed:
1. SRCA participants or committees may agree to a product, safety or other standard. In some cases, the SRCA may participate in standard-setting activities of government regulatory bodies and private voluntary standard-setting organizations by providing comments and suggestions.
2. When standardization activities are under consideration, the discussion must be confined to technical, engineering, safety, and regulatory factors. Competitive and marketplace issues are not proper factors to be considered. SRCA legal counsel should be consulted before participation in standard-setting activities and should be consulted for at least initial discussions regarding SRCA’s role in such activities.
An organization may be held strictly liable for the illegal conduct of its participants and agents acting under its name even if the organization has not authorized the activity. Thus, SRCA must ensure that SRCA participants and agents are not using the SRCA’s legitimate activities for anticompetitive purposes.
The penalties for violating federal and state antitrust laws are severe. The Sherman Act is a criminal conspiracy statute. Therefore, active participants, as well as individuals who silently acquiesce in illegal activity, can be held criminally responsible. Each individual and each corporation which is found guilty of a criminal violation of the Sherman Act may be faced with substantial fines. Individuals and corporate officers may be imprisoned for up to ten years.
The greater likelihood of occurrence, and possibly the more severe penalty, may be civil suits brought by competitors or even consumers. Civil antitrust actions result in treble damage awards.
The government’s attitude towards industry organizations requires such organizations and their participants to at all times conduct their business openly and avoid any semblance of activity which might lead to the belief that participants had agreed, even informally, to something that could have an effect on prices or competition. Strict compliance with the antitrust laws by SRCA participants is critical.
Slate Roofing Contractors Association of North America Inc.
Active participation in Slate Roofing Contractors Association (“SRCA”) meetings adds to the vitality and energy to the organization and its mission.
While the positive contributions of industry associations are well recognized and encouraged by government, such activities also are subject to close scrutiny under both federal and state antitrust laws. The single most significant law affecting societies and other associations is the Sherman Antitrust Act, which makes unlawful every contract, combination, or conspiracy, in restraint of trade. Because SRCA committee meetings are, by nature, a group of competitors joined together for a common business purpose, they satisfy what would ordinarily be a difficult element in proving an antitrust violation.
Historically, the most significant area of antitrust concern for groups such as the SRCA has been price fixing. Price fixing is a very broad term which includes any concerted effort or action that has an effect on prices, terms or conditions of trade, or on competitors. Accordingly, the SRCA’s officers, directors, volunteers, and members of its committees and other meetings and discussions (collectively, “SRCA participants”) should refrain from any discussion which may provide the basis for an inference that they agreed to take any action relating to prices, services, production, allocation of markets, or any other matter having a market effect. These discussions should be avoided both at formal meetings and informal gatherings. In addition, SRCA participants should be sensitive to other matters that may raise particular antitrust concern: participant restrictions, codes of ethics or other forms of self-regulation, product standardization, or professional certification. The following are guidelines participants should follow at all SRCA committee meetings and related informal gatherings:
- DON’T discuss your own or competitors’ prices or fees for service, or anything that might affect prices or fees,
such as costs, discounts, or profit margins.
- DON’T stay at a meeting where any such price talk occurs.
- DON’T make public announcements or statements about your own prices or fees, or those of competitors, at any SRCA committee meeting.
- DON’T talk about what individual organizations or others plan to do in particular geographic or product markets or with particular customers.
- DON’T speak or act on behalf of the SRCA or any of its committees unless specifically authorized to do so.
- DO alert the SRCA staff or legal counsel to any sensitive issues in proposed statements to be made by the SRCA on behalf of a committee.
- DO consult with your own legal counsel or the SRCA before raising any matter or making any statement that you think may involve competitively sensitive information.
- DO be alert to improper activities, and don’t participate if you think something is improper.
Adherence to these guidelines involves not only avoidance of antitrust violations, but avoidance of behavior which might be so construed. Bear in mind that the antitrust laws are stated in general terms, and that these guidelines only provide an overview of prohibited actions.