Broadway Producer’s Antitrust Claims Against Actors’ Union Barred By Federal Exemption
05/09/2023On April 14, 2023, the United States District Court for the Southern District of New York dismissed a suit brought by Garth Drabinsky, an award-winning Broadway producer, against an actors’ union, the Actors’ Equity Association (“AEA”), for allegedly blacklisting him in violation of Sections 1 and 2 of the Sherman Act. The Court dismissed the suit with prejudice, holding that Drabinsky’s federal antitrust claims were barred by the statutory exemption for unions. Drabinsky v. Actors’ Equity Association, No. 22-CV-8933-LGS (S.D.N.Y.).
AEA is a labor union that represents more than 50,000 professional theater actors and stage managers. AEA negotiates contracts with theaters and producers and does not allow its members to work in productions that do not contract with the union. Additionally, producers with whom AEA contracts may not hire actors or stage managers who are not represented by the union. AEA also maintains a “Do Not Work” list with the names of producers and productions with whom its members are prohibited from working. AEA placed Drabinsky on this list following formal grievances lodged by the cast of one of Drabinsky’s plays stating that he had been overly controlling; withheld benefits and payment; and created an unsafe and hostile work environment, including by using racial slurs during rehearsal.
Drabinsky alleged that by placing him on the list, AEA violated the Sherman Act’s prohibition against group boycotts and unlawful monopolization. Specifically, the amended complaint alleged that defendant violated Sections 1 and 2 of the Act by agreeing with its members, as well as other artists’ unions, to boycott all of Drabinsky’s productions, resulting in his expulsion from the market that AEA allegedly monopolizes. Drabinsky also asserted state law tort claims for defamation, intentional tort, and negligence, among others, arising out of AEA’s decision to place him on the “Do Not Work” list.
The Court held that Drabinksy’s antitrust claims were barred by a federal statutory exemption from liability under the Sherman Act that applies to labor unions. The Court relied on Supreme Court precedent for the principle that unions that “act in their self-interest and not in combination with non-labor groups” are exempt from the Sherman Act. United States v. Hutcheson, 312 U.S. 219, 232 (1941). The Court found that AEA had acted in its own self-interest by placing Drabinsky on the “Do Not Work” list, because doing so responded to the grievances of its members who had complained about wages, benefits and working conditions—all legitimate union interests. The Court also found that the alleged involvement of other artists’ unions in the alleged boycott did not render the exemption inapplicable because the other unions are also “labor groups” party to a labor dispute between AEA and Drabinsky.
The Court also dismissed the state law tort claims, holding that they were barred by New York’s Martin v. Curran doctrine, which requires lawsuits against unincorporated associations to allege and prove the individual liability of each member of the defendant association to be successful. The Court found that the facts in Drabinsky’s amended complaint did not plausibly support a claim that every one of AEA’s 50,000-plus members had knowledge of AEA’s actions against Drabinksy, let alone authorized or ratified them.
The decision demonstrates the reach of the statutory exemption from Sherman Act liability for labor unions, which the Court notes can even apply in cases that arise out of personal antagonism due to a prior labor dispute. It also provides some useful detail on the requirements of union self-interest and non-combination with non-labor entities.