American Federation of Musicians v. Carrol

Most musicians were members of the union called the American Federation of Musicians (AFM) (defendant). The AFM engaged in collective bargaining on behalf of union members with entities such as orchestras or movie studios. However, collective agreements were less viable for club dates, which were one-time musical engagements such as weddings. For club dates, the AFM unilaterally developed rules via the Price List Booklet (the price list) that were binding on union members. For example, if a client hired a bandleader to perform at an event, AFM rules dictated the minimum amount the bandleader charged the client, how many sidemen the bandleader hired, and the minimum wage the bandleader paid the sidemen. Sometimes the bandleader played with the band; however, when the bandleader was not at the event, a subleader was hired. Joseph Carrol (plaintiff) and other bandleaders were dissatisfied with some of AFM’s rules and brought suit alleging a violation of antitrust law. The AFM argued that it qualified for an exemption under antitrust law because the Norris-LaGuardia Act determined that labor groups engaged in labor disputes were beyond the control of the Sherman Act. The lower courts determined that the bandleaders were independent contractors in relation to their clients and employers in relation to the band members they hired. Therefore, in order to analyze the exemption issue, the courts needed to assess whether the bandleaders’ dual status made them a labor group engaged in a labor dispute or a nonlabor group. The federal district court ruled the bandleaders were a labor group and that the price list was legal. The court of appeals agreed that the bandleaders were a labor group but determined that the price list violated the Sherman Act. AFM appealed.