When you’re a member of a manufacturer group such as the Spiral Duct Manufacturers Association, a conversation at a cocktail party could be illegal — depending on its subject.
That was the message Stephen J. Burton brought to SPIDA’s Jan. 25 winter meeting in Chicago. The attorney, whose client list includes the Sheet Metal Workers union, car dealers and the Sheet Metal and Air-Conditioning Contractors’ National Association, spoke to the group about “When Customers Collude in the Marketplace.”
Burton acknowledged that he has become quite jaded after practicing law for three decades.
“My perspective is pretty much every damn thing on the planet is illegal, and if it isn’t, it will be tomorrow,” he said.
Under federal and most state anti-trust laws, it is illegal to fix prices, rig bids or agree to boycott competitors, suppliers or customers. It’s also against the law to agree to limit production or divide the market amongst each other. Colluding on shipping terms is also against the law.
“All this stuff is a big deal,” Burton said.
One of the standards used to determine if an action was illegal, Burton said, was to apply a “rule of reason” test: Did the action unreasonably restrain trade?
“If you have customers who get together and say, ‘We’re only going to pay X,’ ” they have engaged in price fixing, he said.
Burton gave examples of price-fixing cases in industries such as blueberry growing and tobacco. Fines cost the companies involved hundreds of millions of dollars, he said.
Burton’s presentation was followed by SPIDA technical director Bob Reid. He gave a presentation on “The Cost of Cheap Duct,” where he said too many engineers were accepting HVAC construction systems that wasted almost a third of the air flowing through them.
“It seems amazing to me that people can write off 30 percent leakage in a system and not think it’s a big deal,” Reid said. “We’ve not been getting the point across” regarding the cost savings of using spiral duct.
In other meeting news, former SPIDA President Reid Boydstun of Spiral Pipe of Texas was given the SPIDA President’s Award.