## Facts

- Actors’ Equity Association (Equity) represented most U.S. stage performers and negotiated collective bargaining agreements setting minimum wages and employment conditions.
- Equity perceived that theatrical agents’ high commissions could reduce actors’ effective earnings and weaken collectively bargained wage standards.
- In 1928, Equity created an agency “franchising” (licensing) system:
  - Equity members could not use an agent unless the agent was licensed by Equity.
  - To obtain/keep a license, agents had to accept union rules that (i) barred commissions on the scale portion of wages, (ii) limited commissions on above-scale earnings, and (iii) required payment of franchise fees to Equity.
- H.A. Artists & Associates, Inc. and other agents declined to participate and challenged the system under Sherman Act §§ 1 and 2.
- The district court dismissed the complaint under the statutory labor exemption; the court of appeals affirmed, treating commission limits as immune and declining to remand on franchise fees despite limited record evidence about costs.
- The Supreme Court granted review.

## Issues

1. Whether Equity’s franchising system involved an unlawful combination with a “nonlabor group” (independent theatrical agents) that would remove statutory labor-exemption protection from Sherman Act liability.
2. Whether, in this context, franchised theatrical agents could be treated as “parties to a labor dispute” such that union regulation of their commissions fell within the statutory labor exemption.
3. Whether Equity’s franchise fees charged to agents were exempt from antitrust scrutiny, or instead required proof that the fees were limited to permissible administrative or labor-related purposes.

## Decision

- The Court held that Equity’s commission restrictions on agents, including the prohibition on commissions on scale wages, were protected by the statutory labor exemption because they were closely connected to preserving collectively bargained wage standards.
- The Court treated franchised agents, given their role in negotiating individual contracts implementing the union’s wage scale, as sufficiently aligned with the labor side for purposes of the exemption analysis.
- The Court declined to uphold franchise fees on the existing record and remanded for further proceedings to determine whether the fees exceeded permissible bounds (including whether they were greater than the costs of administering the licensing system).
- Disposition: affirmed as to commission regulations; vacated and remanded as to franchise fees.

## Legal Principles

- The statutory labor exemption shields union conduct taken in the union’s self-interest and not in combination with a “nonlabor group” outside the labor dispute.
- Regulation of intermediaries may fall within the exemption when the restraint is “intimately related” to wages and working conditions and is directed at preventing erosion of collectively bargained compensation.
- The exemption is limited; union exactions from nonmembers (such as licensing fees) are not automatically immune and may require a factual showing that they are justified by legitimate labor-related objectives (e.g., administering a regulatory system) rather than revenue-raising or broader market control.
- When the record does not establish the relationship between a union-imposed fee and the union’s administrative costs or labor purposes, antitrust immunity for the fee cannot be assumed.

## Conclusion

The Court upheld Equity’s agent-commission restrictions as exempt from antitrust liability because they protected collectively bargained wages, but required further factual inquiry into whether Equity’s franchise fees were permissible under the statutory labor exemption.


H.A. Artists & Assocs., Inc. v. Actors’ Equity Ass’n, 451 U.S. 704 (1981)