Antitrust Guidelines for NARMS

The antitrust laws are the rules under which our competitive economic system operates. Their primary purpose is to preserve and promote free competition. It is NARMS policy strictly to comply in all respects with the antitrust laws.

Associate meetings or workshops by their very nature bring competitors together. Accordingly, it is necessary to avoid discussions of sensitive topics and especially important to avoid recommendations with respect to sensitive subjects. Agreements to fix prices, allocate markets, engage in product boycotts and to refuse to deal with third parties are automatically illegal under the antitrust laws. It doesn’t matter what the reason for the agreement might be.

Accordingly, at any NARMS meeting discussions of prices, including elements of prices such as allowances and credit terms, quality ratings of suppliers, and discussions which may cause a competitor to cease purchasing from a particular supplier, or selling to a particular customer, must be avoided. Also, there should be no discussion that might be interpreted as a dividing up of territories or customers.

An antitrust violation does not require proof of a formal agreement. A discussion of a sensitive topic, such as prices, followed by parallel action by those involved in or present at the discussion is enough to show a price fixing conspiracy. As a result, those attending a NARMS sponsored meeting must remember the importance of avoiding not only unlawful activities, but even the appearance of unlawful activity.

As a practical matter, violations of these rules can have serious consequences for a company and its employees. The Sherman Antitrust Act is both a civil and criminal statute. Violations are felonies punishable by penalties of up to $1 million for corporations and by imprisonment of up to three years or penalties of up to $100,00, or both, for individuals. The Justice Department, state attorney general, and any person or company injured by a violation of the antitrust laws may bring civil actions for three times the amount of the damages, plus attorney’s fees and injunctive relief.

Antitrust investigations and litigation are lengthy, complex, disruptive and expensive. They may be generated by federal or state regulators, your competitors, your customers, even by your own current or former employees. Therefore, all companies and their employees must not only comply with the antitrust laws in fact, but must conduct themselves in a manner that avoids even the slightest suspicion that the law is being violated. Associations such as NARMS, because they bring competitors together, are natural targets, along with members alleged to have participated with or through the association.

Here is a list of subjects which may not be the subject of any type of agreement among competitors, whether explicit or implicit, formal or informal, and which therefore should not even be discussed at NARMS meetings:

a. Prices to be charged to clients, customers or suppliers;
b. Specific methods by which prices are determined, with directions as to “how to do it” or even less.
c. Division or allocation of markets or customers;
d. Coordination of bids or requests for bids;
e. Terms and conditions of sales, including credit or discount terms;
f. Terms for distribution of products;
g. Targets for production of products or the level of production;
h. Specific profit levels;
i. Exchange of price information as to specific customers;
j. A boycott of or a refusal to deal with a customer or supplier;
k. Compilation of “approved” lists of customers or suppliers;
l. “Profit” levels…i.e., “Here’s what our members need to do to make money.”
m. Whether a company’s pricing practices are “unethical,” “improper,” etc.
n. Coordination of “bids” or “requests for bids” or requests for proposals (”RFPs”).
o. Standards or codes to eliminate competition.

When in doubt about discussing any topic, consult with your own legal counsel, or with NARMS staff or its legal counsel, to be sure you are on safe antitrust ground. When unsure, play it safe and avoid the topic.