MISCELLANEOUS FISHERIES LEGISLATION FISHERMEN'S ORGANIZATION RIGHTS THURSDAY, JUNE 17, 1965 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON FISHERIES AND WILDLIFE CONSERVATION The subcommittee met at 10 a.m., in room 1334, Longworth House Office Building, Hon. Alton Lennon presiding. Mr. LENNON. The committee will come to order. In the absence of Mr. Thompson and Mr. Dingell, I have been asked to convene the hearing. The subject matter for consideration this morning is H.R. 3955, offered by our distinguished member, Mr. Pelly. (H.R. 3955 and agency reports follow :) [H.R. 3955, 89th Cong., 1st sess.] A BILL To make clear that fishermen's organizations, regardless of their technical legal status, have a voice in the ex-vessel sale of fish or other aquatic products on which the livelihood of their members depends Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 1 of the Public Law Numbered' 464, Seventy-third Congress, entitled "An Act authorizing associations of producers of aquatic products" (48 Stat. 1213; 15 U.S.C., sec. 521), is amended by adding at the end of section 1 the following new paragraph: "Associations authorized by this section (notwithstanding any State or local law) shall include, but not be limited to, unions or other organizations of active fishermen whose income is dependent on the ex-vessel price of fish or other aquatic products, although the membership of such an organization is composed of fishermen who are either masters or crew members of fishing vessels. Such an organization or organizations may bargain, severally or jointly with one or more buyers of the fish or other aquatic products produced by its members, or one or more associations of buyers, including area or industrywide associations, regarding the terms and conditions of ex-vessel sales of such fish or aquatic products, or take such other action with reference to such ex-vessel sales, or factors affecting such ex-vessel sales, as an association may lawfully take, whether or not such fish or other aquatic products are sold through the organization and whether the organization acts as a selling agent or only as a bargaining agent: Provided, That nothing in this Act or in any State or local law shall limit the rights of employee fishermen given by the Labor-Management Relations Act, 1947, the Clayton Act, the Norris-La Guardia Act, and other Acts, including the rights of employee fishermen whose compensation is determined by the proceeds of the catch, to bargain collectively, or take other collective action regarding the ex-vessel price per pound or per piece of fish or other aquatic produces to be used as a basis for computing their compensation: And provided further, that the making of any such agreement or agreements between such an organization or organizations and one or more buyers or one or more associations of 1 buyers concerning the terms, conditions, and prices of the ex-vessel sales of such fish or other aquatic products shall not be held to be in violation of any of the antitrust or trade laws of the United States, and any such agreement or agreements shall be deemed to be lawful." Hon. HERBERT C. BONNER, FEDERAL TRADE COMMISSION, Chairman, Committee on Merchant Marine and Fisheries, Washington, D.C. DEAR MR. CHAIRMAN: This is in response to your request of February 4, 1965, for a report on H.R. 3955, 89th Congress, 1st Session, a bill "to make clear that fishermen's organizations, regardless of their technical legal status, have a voice in the ex-vessel sale of fish or other aquatic products on which the livelihood of their members depends." The bill would authorize unions or other organizations of active fishermen, whose income is dependent on the ex-vessel price of fish or other aquatic products, although the membership of such an organization is composed of either masters of boats or crew members, to qualify as cooperative fishing associations under the Fishermen's Cooperative Marketing Act (15 U.S.C. 521–522), and bargain severally or jointly with one or more buyers of such products regarding the terms and conditions of ex-vessel sales of such products "or take such other action with reference to such ex-vessel sales or factors affecting such ex-vessel sales, as an association may lawfully take," regardless of whether such organization acts as a selling agent or only as a bargaining agent. In addition, the bill adds a proviso that nothing in the Fishermen's Cooperative Marketing Act, or in any state or local law, shall limit the rights of employee fishermen under the Labor Management Relations Act, the Clayton Act, the Norris-LaGuardia Act or other Acts to bargain collectively or take other collective action regarding the ex-vessel price per pound of fish "to be used as a basis for computing their compensation." Another proviso of the bill is to the effect that any agreement between an association and one or more buyers regarding the terms of ex-vessel sales of fish shall not be held to violate any antitrust or trade laws of the United States. The bill is thus apparently designed to permit employee fishermen to exercise a voice in the selling and in determining the sale prices of fish or other aquatic products. It would permit employee fishermen whose income is dependent on the ex-vessel price of fish (1) to join with a cooperative fishermen's organization under the Act; (2) to participate in bargaining with buyers on the selling price of fish they have produced; and (3) to take "such other action" regarding the sale of such fish as an association may lawfully take. The Federal Trade Commission has had considerable experience in dealing with fishermen's organizations under the Fishermen's Cooperative Market Act. For example: Alaska Salmon Industry, Inc., Docket 6141, 50 FTC 863 (1954); Cordova District Fisheries Union, Docket 6261, 52 FTC 66 (1955); Cordova District Fisheries Union, Docket 6369, 52 FTC 731 (1956); United Fishermen of Alaska, Docket 6388, 52 FTC 1240 (1956); Puget Sound Salmon Canners, Inc., Docket 6376, 52 FTC 1251 (1956); California Fish Canners Ass'n, Docket 6623, 54 FTC 120 (1957). In those cases, the Commission was confronted with situations wherein various cooperative groups combined with other respondents, including employee groups (such as fishermen's unions) boatowners' associations, and canners, in pricefixing combinations in restraint of trade. Orders were issued requiring the parties to cease and desist from so combining or entering into any agreements between and among themselves or with others with the purpose or intent of fixing or maintaining prices at which fish or other aquatic products were to be purchased or sold and also from interfering with the fishing operations of others. Those orders, however, did assure bona fide fishermen's cooperative organizations that actions pursuant to and in accordance with the provisions of the Fishermen's Cooperative Marketing Act were excepted therefrom. In addition, those orders specifically excepted activities by any of the respondents, including fishermen's cooperatives, in individually purchasing or selling or bargaining for the purchase or sale of any fish or aquatic product with any single buyer or seller. The Fishermen's Cooperative Marketing Act is modeled after the Agricultural Cooperative Marketing Act (7 U.S.C. 291-292). These Acts permit groups of fishermen or farmers to form cooperative associations in order to market their products effectively. They are not permitted by those Acts, however, to engage in practices considered to be monopolistic or in restraint of trade. The courts, in constructing both these Acts, have uniformly held that they do not grant a complete exemption from the antitrust laws. United States v. Borden Co., 308 U.S. 188 (1939); Columbia River Packers Ass'n. v. Hinton, 315 U.S. 143 (1942); Hawaiian Tuna Packers, Ltd. v. International Longshoremen's and Warehousemen's Union, 72 F. Supp. 562 (D.C. Haw. 1947); Local 36 of International Fishermen & Allied Workers of America v. United States, 177 F. 2d 320 (9th Cir. 1949), cert. denied 339 U.S. 947 (1950); and Maryland & Virginia Milk Producers Ass'n. v. United States, 362 U.S. 458 (1960). In attempting to improve the bargaining position of the fishermen employees, the subject bill would sanction types of activities or conduct by them, which now runs afoul of the antitrust laws. It has been held in several cases that the Fishermen's Cooperative Marketing Act does not authorize fishermen whose compensation is directly affected by the amount for which the catch is sold to combine with their employers, the boatowners, to fix the prices which dealers are required to pay for fish. Local 36 of International Fishermen & Allied Workers of America v. United States, 177 F. 2d 320, at 335. See also Allen Bradley Co. v. Local Union No. 3, 325 U.S. 797 (1945). In the Local 36 case, p. 332, supra, the court states specifically: "If then the boatowners were acting in voluntary conjunction with the fishermen employees of their boats in such a combination, their activities would certainly be illegal" (United States v. Women's Sportswear Manufacturers Association, 336 U.S. 460, 69 S. Ct. 714). It has consistently been the Commission's view that exemptions from the antitrust laws designed for the relief of a particular industry or group of persons should be viewed most critically and only adopted after a very convincing showing of necessity. On the basis of its experience to date with the fishing industry, the Commission is not aware of circumstances that would justify antitrust exemption as a solution for problems of the fishing industry. The Commission is opposed to H.R. 3955. By direction of the Commission, Commissioner MacIntyre not concurring. His views on this matter are stated in a letter to the Chairman of the Commerce Committee of the Senate dated July 2, 1963, regarding S. 1135 of the 88th Congress. PAUL RAND DIXON, Chairman. N.B. Pursuant to regulations, this report was submitted to the Bureau of the Budget on March 11, 1965, and on June 16, 1965, the Bureau of the Budget advised that there is no objection to the submission of this report from the standpoint of the Administration's program. JOSEPH W. SHEA, Secretary. U.S. DEPARTMENT OF THE INTERIOR, Hon. HERBERT C. BONNER, Chairman, Committee on Merchant Marine and Fisheries, House of Representatives, DEAR MR. BONNER: Your Committee has requested this Department's views and recommendations on H.R. 3955, a bill "To make clear that fishermen's organizations, regardless of their technical legal status, have a voice in the exvessel sale of fish or other aquatic products on which the livelihood of their members depends." H.R. 3955 amends section 1 of the Fishery Cooperative Marketing Act of 1934 (15 U.S.C. sec. 521) by adding a new paragraph which authorizes unions or other organizations of active fishermen who are either masters or crewmembers of fishing vessels, and whose income is dependent on the ex-vessel price of fish or other aquatic products, to be included in the category of cooperative fishing associations covered by the Act. Such organizations would then be authorized to bargain, severally or jointly, with one or more purchasers of fish or other aquatic products or with one or more associations of buyers, including area or industrywide associations, regarding the terms and conditions of ex-vessel sales of such fish or other aquatic products, or take such other action concerning such sales or factors affecting such sales, as an association may take lawfully, regardless of whether such organizations act as selling or bargaining agents. The bill also provides that nothing in the Act, supra, or any other state or local law, shall limit the rights of employee fishermen under the Labor-Management Relations Act of 1947, the Clayton Act, the Norris-LaGuardia Act, or other acts to bargain collectively, or take such collective action regarding the ex-vessel price of fish or other aquatic products to be used as a basis for computing their compensation. H.R. 3955 provides that any agreement between such organizations and buyers or association or buyers, concerning the terms, conditions, and prices of such sales of such fish or other aquatic products, shall not be a violation of any of the antitrust or trade laws of the United States, and that such agreements shall be deemed lawful. Section 1 of the Fishery Cooperative Marketing Act, supra, provides in part as follows: "Persons engaged in the fishery industry, as fishermen, catching, collecting, or cultivating aquatic products, or as planters of aquatic products on public or private beds, may act together in associations, corporate or otherwise, with or without capital stock, in collectively catching, producing, preparing for market processing, handling, and marketing in interstate and foreign commerce, such products of said persons so engaged. * * * * * "Such associations may have marketing agencies in common, and such associations and their members may make the necessary contracts and agreements to effect such purposes: Provided, however, That such associations are operated for the mutual benefit of the members thereof, * * *. Under this Act groups of fishermen are permitted to established cooperative associations in order to market their products in interstate and foreign commerce effectively. This Act, however, does not grant to the fishermen cooperatives a complete exemption from the antitrust laws. H.R. 3955 is designed to give unions or other organizations of active fishermen. who are either employee or employer fishermen, a voice in the sales price of fish or other aquatic products. The distinction between labor unions, in the usual sense, and labor unions in the fisheries and their members who would be benefited by H.R. 3955, has to be kept in mind in order to appreciate the significance of this proposed legislation. Labor unions in the usual sense function by bargaining collectively with the employers over wages and conditions of work. On the other hand, labor unions in the fisheries and sometimes include employee fishermen, captains, mates, engineers, and in the past even vessel operators and vessel owners. This intermixed association stems from the community of interest created by the "lay" system whereby each individual on the fishing vessel is remunerated by a share of the proceeds from the catch after each voyage. Hence it is to the mutual advantage of all who share in the proceeds that the catch sells for the highest price which is to improve the economic standards of our fishermen. In the early period following the passage of the antitrust acts, the courts often adjudged cooperative marketing associations, per se, as illegal combinations restraining trade. The Capper-Volstead Act, passed in 1922, recognized agricultural cooperative associations engaged in interstate commerce. The Fishery Cooperative Marketing Act of 1934, supra, modeled after the CapperVolstead Act, as we have indicated above, recognized fishery cooperative marketing associations engaged in interstate commerce. It provided the machinery. however, in section 2 of the Act (15 U.S.C. sec. 522) for policing these associations, organized under its provisions, and preventing them from monopolizing or restraining trade so that the price of any aquatic product is "unduly enhanced by reason thereof". In some segments of our domestic fishery industry, labor unions representing employee fishermen bargain with cooperatives representing vessel owning employers for the minimum price on which the crew's share or wage would be based, and the cooperative bargains separately with a canner or buyer. Where |