The dispute at issue in this case centered on salary surveys conducted by some 14 major oil companies. The plaintiffs in this class action case alleged that the participating companies used the information gained from these surveys to keep salaries among certain nonunion employees artificially low. A lower court had dismissed the lawsuit, saying that the plaintiffs did not plead sufficient information to merit moving forward with the case. The December 20, 2001 opinion by a judge from the U.S. Court of Appeals for the Second Circuit reinstated the plaintiffs’ case, holding that the lower court was wrong in granting the oil companies’ motion to dismiss.
According to the Second Circuit opinion, the surveys were conducted regularly and were frequently discussed at meetings of human resources professionals and other staff of the participating companies. The information was not available publicly and was not available to employees who held the positions that were the subject of the survey. The surveys included information about salaries paid in the past and present, as well as information about what the companies expected to pay in the future.
The court held that the case should continue — thus passing the dispute back to the lower court for further action. Some of the key reasons the court gave for siding with the plaintiffs were
- Much of the data collected and disseminated concerned current and future salaries.
- The data was broken down in certain ways so that it was an aggregate of as few as three companies.
- The information was not publicly available and was not disseminated to employees.
- The information was discussed among participating companies at meetings.
While this dispute does not involve a trade or professional association per se, it is not difficult to see that association surveys of salaries and other sensitive, price-related information might also be collected and disseminated in a similar anticompetitive manner. Thus, it is important for associations to make certain that they adhere to the following policies and procedures that will help them avoid significant antitrust risk:
- Have a third party manage the process
In a joint statement released several years ago by the U.S. Department of Justice Antitrust Division ("Antitrust Division") and the Federal Trade Commission ("FTC") regarding antitrust in health care, the use of a "trade association" to serve as a third party to collect and disseminate sensitive survey information is specifically approved. Still, associations must take care to ensure that those handling the raw data from the survey are association staffers and not volunteers who work for members or other participants in the survey. - Make the data available
While not always required, it is often advisable for an association to make its salary survey results and other industry research available to both members and nonmembers. - Stick to the past
The Antitrust Division and FTC recommend that to qualify for an "antitrust safety zone," wage and price surveys should ask only about wages paid or prices charged at least three months prior to the date survey participants complete the survey. Asking about current prices charged or wages paid will be viewed with a scrutinizing eye by antitrust regulators and would-be plaintiffs, and surveys of future prices or future compensation are very likely to be considered anticompetitive. - Aggregate data only
Having at least five different competitors respond to a survey of wage or price-related information is recommended by the FTC and Antitrust Division. Further, the agencies recommend that any information disseminated is sufficiently aggregated such that it would not allow recipients to identify the prices charged or compensation paid by any particular company. - Avoid unregulated discussions of survey results
Generally, the problem with salary and price surveys is not the surveys themselves, but what competitors do with the information they receive. Thus, it is important for associations to take the initiative to prohibit improper discussion of the survey results at association meetings as well as on association-sponsored chat rooms or listservers.