On Dec. 16, 2013, the U.S. Federal Trade Commission announced that it had reached proposed settlements with two professional associations to eliminate provisions in their codes of ethics that purportedly limited competition among their members.
The FTC's complaint against the Music Teachers National Association, Inc. (MTNA), which represents over 20,000 music teachers nationwide, alleged that the association and its members restrained competition in violation of Section 5 of the FTC Act through a code of ethics provision that restricted members from soliciting clients from rival music teachers: "The teacher shall respect the integrity of other teachers' studios and shall not actively recruit students from another studio." The FTC's proposed order requires, among other things, that the MTNA stop declaring it unethical for its members to solicit teaching work from other music teachers.
The FTC's complaint against the California Association of Legal Support Professionals (CALSPro), which represents companies and individuals that provide legal support services in California, alleges that CALSPro violated Section 5 of the FTC Act through code of ethics provisions that restrained its members from competing against each other on price, disparaging each other through advertising, and soliciting legal support professionals for employment: (1) "It is not ethical to cut the rates you normally and customarily charge when soliciting business from a member firm's client..."; (2) "It is not ethical to ... speak disparagingly of another member"; (3) "Never discuss the bad points of your competitor", and (3) "It is unethical to contact an employee of another member firm to offer him employment with your firm without first advising the member of your intent." The proposed order settling the FTC's complaint against CALSPro requires, among other things, the association to cease and desist from such practices in the future.
These FTC's investigations and settlements are consistent with the FTC's focus on anticompetitive agreements among members of professional and trade associations, and serve as a warning to other associations when developing codes of conduct, codes of ethics, or other guidelines regarding member behavior.
The pleadings for the MTNA matter are available here; the pleadings for the CALSPro matter are available here.
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