CHAPTER XIII THE CLAYTON ACT 1 § 155. The Clayton Act in terms forbids combinations by stock ownership in other corporations 1a and by interlocking directors.2 The provisions forbidding interlocking directors are quite specific. The owning of stock in other corporations seems to be forbidden only when its effect may be "to substantially lessen competition" between the corporations or "to restrain such commerce in any section or community, or tend to create a monopoly of any line of commerce. This would seem to throw the whole matter into the hands of the court to decide as common law courts are accustomed to decide cases. The words of the act hardly add anything to what the court could do under the Sherman Act. § 156. Two unfair methods of competition are indicated and declared to be unlawful-local price-cuttings and exclusive (or tying) contracts of sale or purchase. Both acts are declared unlawful only when their effect is "to substantially lessen competition or tend to create a monopoly in any line of commerce. Does this do any more than leave it to the courts, acting as common law courts were accustomed to proceed, to make or declare what act of local price-cutting or what exclusive contract would be a tort? If not, the fact that the local price-cutting or exclusive contract was used by a unit occupying a preponderant position in the business would be an important, if not a decisive, element in making the tort. What other elements might be sufficient to make the act of local price-cutting or exclusive contract a tort to the party damaged, it is not attempted here to specify; but whatever they may be, it is submitted that they are the same under the Sherman Act as they are under the Clayton Act. 1-Pub. No. 212-63rd Cong. 1a-Sec. 7 [1231]. 2-Sec. 8 [1232]. 3-Sec. 2 [1229]. 8157. The most discussed sections of the Clayton Act have been the so-called labor provisions-Sections 6 and 20.5 Section 6 commences with the declaration "that the labor of a human being is not a commodity or article of commerce." No labor organization or its acts can, therefore, be brought within the jurisdiction conferrred by the Sherman Act by reason of the fact that labor units pass from one state to another. But the Clayton Act does not in the least prevent the same organization or the acts of such organization from coming within that jurisdiction because they affect interstate commerce in commodities as in Loewe v. Lawlor. As labor organizations and the acts of such organizations which are attacked for illegality under the Sherman Act practically always affect interstate commerce in a commodity, the first sentence of Section 6 of the Clayton Act is not of practical value in exempting labor organizations and their acts from the possibility of being illegal under the Sherman Act. § 158. Section 6 goes on to provide: "nothing contained in the antitrust laws shall be construed to forbid the existence and operation of labor, agricultural, or horticultural organizations, instituted for the purposes of mutual help and not having capital stock or conducted for profit, or to forbid or restrain individual members of such organizations from lawfully carrying out the legitimate objects thereof." This is merely a restatement of the common law and presumably the law under the Sherman Act-that labor organizations "for the purposes of mutual help" are not per se illegal but are on the contrary lawful. Nor is there anything illegal at common law or under the Sherman Act in individual members of "such organization" (i. e., a legal organization "for the purposes of mutual help") "lawfully carrying out the legitimate objects thereof."7 8159. The last clause of Section 6 adds nothing. It simply reiterates what is the common law and the law presumably under the Sherman Act that "such organizations [i. e., such as are 5-[1230, 1241]. See an excellent note by Conrad E. Snow, 30 Harv. L. Rev. 632. 6-208 U. S. 274 (1908) [1166]; Lawlor v. Loewe, 235 U. S. 522 (1915) [1191]. 7-See opinion of Mr. Justice Pitney in Paine Lumber Co. v. Neal, 244 U. S. 459 (1917). lawful and organized for purposes of mutual help] and the members thereof" shall not "be held or construed to be illegal combinations or conspiracies in restraint of trade under the antitrust laws." The care with which Section 6 affirms the legality of organizations and acts of labor which were valid at common law and therefore valid under the Sherman Act, raises the inference very clearly that labor organizations and the acts of such organizations which, by reason of their being not merely for mutual help, but for the purposes of monopoly and to exclude others from the labor market, were illegal at common law and under the Sherman Act are still illegal under the Clayton Act. §160. Section 20 enumerates a list of specific acts which it provides shall not "be considered or held to be in violation of any law of the United States." This list does not include the "secondary boycott," which was a tort at common law 8 and under the Sherman Act. The list does include a number of acts which, taken by themselves alone, were clearly lawful at common law and may be assumed to have been lawful also under the Sherman Act-such as: "terminating any relation of employment," and "ceasing to perform any work or labor." This points to the strike. Mere striking, however, has never been illegal at common law; and it may be assumed that it is not so under the Sherman Act. In the same list of acts is mentioned "ceasing to patronize or to employ any party to such dispute, or from recommending, advising or persuading others by peaceful and lawful means so to do." This refers to the direct boycott, which is legal at common law 10 and presumably so under the Sherman Act. "Paying or giving to or withholding from any person engaged in such dispute, any strike benefits or other moneys or things of value;" or "peaceably assembling in a lawful manner, and for lawful purposes;" or "doing any act or thing which might lawfully be done in the absence of such dispute by any party thereto," are acts which are certainly, by themselves alone, lawful and unobjectionable at common law or under the Sherman Act. The moment, however, the acts 8-Ante $97. 9-Ante $135. 10-Ante § 96. enumerated are used by a combination of labor units occupying a preponderant position in the market with the purpose of excluding others from that market-thereby achieving or attempting to achieve a monopoly-they cease to be the acts to which the statute refers. They become acts of an entirely dif ferent character and effect. The combination and its acts are illegal at common law and presumably so under the Sherman Act. Section 20 of the Clayton Act contains no word which saves them from that illegality.11 § 161. The following acts mentioned in the enumeration of Section 20 are the only ones which have not yet been commented upon: "recommending, advising, or persuading others by peaceful means so to do" (i. e., strike); or "attending at any place where any such person or persons may lawfully be, for the purpose of peacefully obtaining or communicating information," or "peacefully persuading any person to work or to abstain from working." If these acts were in and of themselves alone, without any localized monopoly purpose, illegal at common law and under the Sherman Act, then this section of the Clayton Act has made them legal. But that does not neces 11-Observe the limitation put upon the application of sec. 20 by Mr. Justice Pitney in his dissenting opinion in Paine Lumber Co. v. Neal, 244 U. S. 459 (1917). He says: "It [§ 20] refers only to cases 'between an employer and employees, or between employers and employees, or between employees, or between persons employed and persons seeking employment, involving, or growing out of, a dispute concerning terms or conditions of employment.' These words evidently relate to suits arising from strikes and similar controversies, and the committee reports upon the bill bear out this view of the scope of the section. But this is not such a suit. There is no relation of employer and employee, either present or prospective, between the parties in Kales Sum. R. of T.-10 145 this case. Defendants who are employees are in one branch of industry in New York City; complainants are employers of labor in another branch of industry in distant states. Nor is there any dispute between them concerning terms or conditions of employment." Why, however, was there not a dispute between the defendants, who were "persons employed," and the non-union workers who were "persons seeking employment" from the complainants? The former wanted to triumph in the competitive struggle against the latter. Why was not this dispute between them "concerning the terms or conditions of employment," i. e., whether the non-union men should be employed unless they joined the union? sarily mean that when these same acts are done with the localized monopoly purpose of bringing every person who would wish to work at a particular place into an organization which has for its object to prevent any member from working at that particular place, and when this purpose has been so far carried out that the organization which seeks to promote it occupies a preponderant position in the labor field serving that particular shop or place, 12 such an organization and its acts of peaceful picketing are valid under the Clayton Act. Under such circumstances the acts in question have become quite different from those enumerated in Section 20. They have an entirely different significance by the addition of the monopoly purpose. §162. Section 16 of the Act 13 establishes the individual's right to injunctive relief as to all acts which are illegal and tortious under the Sherman Act or the Clayton Law where irreparable damage is threatened and the remedy at law is inadequate.14 12-Ante $ 100. 13-[1240]. 14-See ante § 152. |