Suggested Guidelines for Antitrust Compliance
In antitrust cases, whether criminal prosecutions or civil treble damage suits, proof against the defendant is most likely to come from the defendant or his associates. Thus, an antitrust compliance program must not only avoid actual violations of antitrust laws, but also avoid creating or permitting the creation of files, records, documents, statements or conversations which might create an appearance of violation. It is impossible, of course, to formulate a set of guidelines to cover all situations at all times, but insofar as the principles of antitrust compliance can be stated in specific rules, REALTORS® and REALTOR- Associates® would be well advised to remember the following: Do not discuss your business with competitors. At any time, in any place, or under any circumstances, do not have any personal, telephone or e-mail conversations with competitors concerning commissions, fees, charges or any other business practices of your real estate business or those of the firm with which you are associated. This applies at social gatherings, on the golf course, while hunting, in the bar, cocktail parties, board functions and at all times and in all places. At association or board meetings, confine discussions to topics of association or board business directly involved in the purpose of the organization and the meeting. Written communication must be clear and explicit. When you discuss a real estate transaction or the superiority of your business practices over your business competitors, talk only to your broker or associates in the firm with which you are associated. Regardless of how carefully you may phrase your letter or memorandum, things look much different in writing than they sound when spoken between knowledgeable people. Of course, financial and economic data sometimes must be written, but in many instances, any information relevant to business or legal relations can be communicated by talking, and talking only to those who have legitimate justification for receiving the information you are transmitting. More than one antitrust defendant has had his letter, correspondence, memoranda and written notes admitted in evidence against him for purposes for which the writer never intended. It is amazing how differently what you wrote sounds when it is read back to you in the grand jury room or during trial. Do not talk unless you know who you’re talking to and what you’re talking about. In any business, complete candor among trusted business associates is necessary. It is not necessary, however, to tell everyone your business. In form only those who need to know such matters as how and in what manner commission or fee contracts were negotiated, how much business you’re doing, what business prospects are, how many and which properties you have sold, and anything else which might be of interest to someone investigating your business for a reason you know nothing about. If you receive a telephone call from anyone who refuses to identify himself or who begins what amounts to a probing cross examination about your business practices, terminate the conversation as quickly and courteously as possible. In this day of ever-improved recording devices for both telephone use and miniature recording devices easily concealed in a room or on the person of an investigator, it is well to make it a rule in discussing business matters to speak as if you were being recorded. The chances are better than you think they are! Remember cellular telephone calls are transmitted over the open air and thus are subject to being intercepted or overheard. A Third party may intentionally be privy to those conversations. Do not deceive yourself or let anyone else
deceive you into believing that any transgression of the antitrust laws has
little risk involved. The federal
government possesses extensive investigatory powers, such as grand juries and
civil investigative demands, as well as ingenious and dedicated investigators.
Also, in private litigation, parties have litigation discovery tools to examine
corporate or firm records and documents and to compel testimony. Even though an
antitrust violator may not keep records, its competitors or the injured parties
may. In this age of photocopying, it is difficult to restrict distribution.
Unexpected records such as telephone bills, expense accounts, a secretary’s
notes, engagement calendars or a forgotten written report may be uncovered.
Also, your computer’s hard drive may be the source of potential information
even when you think the information has been erased. If prosecuted or sued for
antitrust violations, you may be faced with surprise witnesses such as former
associates and employees and plea bargainers. Also, an alleged co-conspirator
may take advantage of the antitrust division’s leniency program and confess,
thus perhaps avoiding indictment, a jail sentence and fines and keeping the tax
deductibility of civil damage payments.
Do not use such terms as "Please
Destroy When Read", "For Your Eyes Only", "No Copies",
or similar terms and phrases.
Experience has demonstrated that even if no copies are made, the original of
such documents eventually end up in somebody’s file. Even when marked
"personal and confidential", the document is usually retained by the
recipient and eventually filed. When an antitrust investigation is under way or
documents are produced on a civil investigative demand or in private antitrust
litigation, such terms and phrases are red flags for the investigator or
opposing counsel.
Do not at any time use any of the words
and phrases which IAR’s Program for Compliance designates ad Dangerous.
Since such statements are so dangerous, they need to be emphasized here along
with some other similar words and phrases:
"We would like to charge a lower commission, but the board has a
rule…"
"This is the rate that all REALTORS® charge."
"The MLS will not accept a listing for less than 120 days."
"Before you list with XYZ Realty, you should know that nobody is going to
work on
their listings."
"If John Doe is really professional (or ethical) he would have joined the
board."
"The board requires that all REALTORS® force their sales people to
join."
"The best way to deal with John Doe is to boycott him, "or "We
don’t worry about
John Doe; we just don’t show his
listings."
"If you valued your services as a professional, you wouldn’t cut your
commissions."
"If X is going to cut his commissions, we’ll just pay him less on
splits."
"No board member will accept a listing for less than 90 days."
"Let him stay in his own part of town, this is our territory."
"If he was really a professional, he wouldn’t use part-timers."
"X is the going rate in this area."
"We have to charge that commission since our rates are set by the Illinois
Real Estate
Commission."
"The
standard commission in this area is X."
"When I see that guy’s signs, I just drive the prospect down another
street."
"We’ve agreed that any commission below X is unfair."
"Something has got to be done about that company; nobody can charge such a
low commission and make a living."
"That price-cutter has no business being
a member of the board."
"You will not get a lower commission from a REALTOR®."
If in doubt, consult.
No compliance program or manual can spell out all of the answers to questions
which may arise. Situations are bound to arise which create doubt. If you do
have doubts about the legal wisdom of any board or business practice, procedure
or activity, consult your board executive officer, the broker under whose
license you work or legal counsel knowledgeable about antitrust matters.
Without clearance: Don’t Do It.
If neither the board executive officer, an executive officer of your firm nor
legal counsel will give clearance to a proposed business deal or activity with
antitrust implications—don’t do it.
Conclusion
Effective antitrust compliance is a
responsibility of management. If officers, directors, board executives, real
estate firm executives, staff level employees and leaders of the industry do not
take seriously the necessity for continuing to emphasize and re-emphasize
antiturst compliance programs, policies, practices and procedures the message
will never get to the membership.
Under IAR’s policy, antitrust compliance is
not a choice, it is a command. The risks are too high for any real estate broker
to remain part of an organization which fails to enforce its antitrust
compliance program. Lawyers can help with designing compliance guidelines or
advising on antitrust compliance matters when they arise, but in the final
analysis it will be IAR and local associations of REALTORS®’ Executive
Officers, MLS Committees, Professional Standard Committees, Arbitration and
Membership Committees who will have to act as the first line of defense against
the costs and consequences inherent in failure of antitrust compliance.
However, it remains the responsibility of
every member of IAR to support and implement this Antitrust Compliance Program
and demonstrate that REALTORS® are true to that which they profess to believe,
the free enterprise system is the best ever devised to secure our economic and
personal freedom.
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