On Aug. 22, 2014, the U.S. Federal Trade Commission announced it had reached two separate proposed consent orders with the National Association of Residential Property Managers, Inc. (NARPM) and the National Association of Teachers of Singing, Inc. (NATS). NARPM and NATS agreed to eliminate provisions in their respective codes of ethics that restrain competition.
NARPM represents more than 4,000 real estate brokers, managers and agents. Its code of ethics read, "The Property Manager shall not knowingly solicit competitor's clients," and "NARPM Professional Members shall refrain from criticizing other property managers or their business practices." The FTC's complaint alleged that these limitations on comparative advertising and solicitation restrained competition in violation of the FTC Act. The proposed settlement order requires NARPM to stop restraining its members from soliciting property management work, and from making statements that are not false or deceptive about a competitor's products, services, or business or commercial practices. Among other things, NARPM also must implement an antitrust compliance program.
NATS represents more than 7,300 vocal arts teachers in the United States. Its code of ethics required that "members will not, either by inducements, innuendos, or other acts, proselytize students of other teachers." Similarly, the FTC's complaint alleged that this restraint violated the FTC Act, and the consent order requires NATS to stop restraining members from seeking teaching work, and stop telling its members that soliciting students is unethical. The order also requires NATS to obtain a certification from each of its chapters that the chapter is not restricting solicitation, advertising or price-related competition by its members, and to sever its ties with any chapter that NATS learns is restraining solicitation, advertising, or price-related competition by its members. NATS also must implement an antitrust compliance program.
The case files are available here and here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
