Trade Advertising Associates, Inc

Text (OCR of the scan at left; may contain errors)

awe aur 2 UUWMUMLSDLUIN DECLSLONS Record Certification—Proceedings Report V7 EVT.C. which represents directly or by implication, that any of respondents’ publications is endorsed by, affiliated with or is an official publication of any labor union, brotherhood, guild, workers federation or any other type of labor organization or association and otherwise to alter and modify its order in conformance therewith.

On August 25, 1969, respondents filed their answer to the Order To Show Cause requesting that it be denied, and on October 27, 1969, filed a memorandum in support thereof. An answering brief was filed by counsel supporting the Commission’s Order To Show Cause on November 14, 1969.

Thereafter, on December 9, 1969, the Commission issued an Order Reopening Proceeding and Directing Hearings for Receipt of Evidence [76 F.T.C. 1090]. Specifically the Commission referred this matter to a hearing examiner to receive evidence on the question: +. . whether the use by respondents of the names or designations “Trade Union News” and “Trade Union News of New Jersey” or the use of words or phrases of similar import or meaning (such as trade, labor, union, guild, brotherhood, workers) in the titling of their publications (with or without a qualifying statement or statements) in itself constitutes, or may be understood, as an implied representation that such publications are endorsed by, affiliated with, or are official publications of a labor or trade union or unions. Pursuant to the Commission’s order of December 9, 1969, evidentiary hearings were conducted by the undersigned examiner on March 24, 25 and 26, 1970, at New York, New York, in accordance with Part 3, Subpart H, § 3.72(b) (3) of the Commission’s Rules of Practice for Adjudicative Proceedings and the record has been closed. On April 24, 1970, the parties filed proposed findings of fact, conclusions and proposals for modification of the order. Summary of the Proceedings The record in this proceeding consists of 305 pages of testimony (Tr. 303-607), thirteen (13) exhibits for the Commission (CX 50A- X through CX 62) and eighteen (18) exhibits for the respondents (RX 1 through RX 18). Counsel supporting the complaint called eight (8) advertiser-witnesses and it was stipulated by the parties that had he called two additional witnesses, their testimony would have been substantially the same as the other eight. In addition, counsel supporting the complaint called respondent Joseph Lash. Respondents called as defense witnesses, Joseph Lash and Eugene Serels, individual respondents, and Mr. Charles Shafman, an advertiser.

1271 Record Certification—Proceedings Report Findings of Fact 1. The testimony of most of the witnesses called indicates that respondents’ method of soliciting ads was by telephone, although one witness stated two men contacted him in person at his plant.? Generally the caller, who in some cases identified himself as John Scott,? asked the witness to run an ad in the “Trade Union News” or renew an ad previously run in the “Trade Union News.” ¢ Almost all of the witnesses agreed to run ads, which were identified,> although some of them testified it was only after additional representations, high pressure tactics or subtle suggestions of union affiliation were utilized by the caller. In all instances of solicitation by telephone, the witnesses were never shown a copy of the newspaper or any other document,’ and many of the witnesses stated they had never seen a copy of the “Trade Union News” until shown it in the hearing room.® 2. In several cases, within approximately thirty minutes after the telephone call and the witnesses’ oral agreement to run an ad, a messenger from respondents arrived with a formal authorization for execution by the witness.® This form carried the format of the newspaper’s masthead at the top including the qualification which appears immediately thereunder.’® These witnesses testified they signed this document or authorized one of their personnel to approve it and pay for the ad.1* Several of the witnesses said they received billings, invoices, etc., but did not bother to read the firm’s letterhead thereon which was identical to the masthead of the paper and contained the qualification “The Nation’s Leading ‘Independent’ Labor Publication.” " One witness stated he merely checked the copy of the ad and the price, before authorizing payment.” 1Tr. 341, 345; Tr. 370; Tr. 426, 436; Tr. 458, 464; Tr. 517; Tr. 545. 2Tr. 489-490, SYr. 370; Tr. 458, 464; Tr. 495.

#Tr, 341, 346-48, 855, 402-03; Tr. 370, 377, 379; Tr. 426; Tr. 546; Tr. 600. 5 yy, 819, CX 518; Tr. 369, CX 51E; Tr. 392, CX 52K (Tr. 423, witness Chain did not authorize this ad); Tr. 426, CX 53F; Tr. 457, CX 53H; Tr. 489, CX 52D; Tr. 516, CX 55G; Tr. 545, CX 50H, CX 50F.

6°Tr, 341-42, 859; Tr. 427; Tr. 458, 464, 482-87; Tr. 517. Tr, 326, 361-62; Tr. 873, 385; Tr. 429; Tr. 461; Tr. 494; Tr. 518. 8Tr, 873; Tr. 429; Tr. 518.

°Tr, 398-401, RX 9; Tr. 461, 467, Tr. 508, RX 18, RX 14, Tr. 511; Tr. 495-97, RX 12; Tr. 517.

1other qualification reads: “The Leading Independent Labor Newspaper.” Tr. 461, 510, RX 13, RX 14; Tr. 550, RX 17; Tr. 497-98, RX 12. See also RXs 1-8, RX 9, RX 11, RX 18, CXs 60, 61, 62.

ur, 461; Tr. 496; Tr. 517, 519.

a Tr. 879, 882, RX 1 through RX 8; Tr. 397, CX 60, CX 61, CX 62; Tr. 399, RX 9; Tr. 4380; Tr. 461, 466, 510; Tr. 495, 496; Tr. 551. zr, 514,

Record Certification—Proceedings Report 17 E.T.C. of a substantial segment of the public the impression that such publications are endorsed by, affiliated with, or are official publications of a labor or trade union or unions.

Discussion Respondents do not contest the fact that the continuing use of the names “Trade Union News” and “Trade Union News of New Jersey” together with the qualifying statement, “The Leading Independent Labor Newspaper,” may be misleading to a substantial segment of the public, but they argue that under the doctrine enunciated by the courts, excision of the trade name under certain circumstances may be avoided if such remedy “would be a harsh, drastic and unwarranted step of the Federal Trade Commission.” See FTC v. Royal Milling Co., 288 U. S. 212, 217 (1933); Jacob Siegel Co. v. FTC, 327 U. S. 608 (1946) ; In the Matter of Devcon Corporation, Docket C-607, February 26, 1968 [73 F.T.C. 272]. In support of this argument respondents agree to accept any of the following qualifications to be used in conjunction with their trade names:

a. In all of the oral solicitations for advertising, the following verbal statements will be made in the solicitations: 1. Not affiliated with any labor union.

2. This newspaper claims no affiliation with any labor union. 3. Not associated with, sponsored by or affiliated with any labor organization or union.

4. Not endorsed by or affiliated with any labor organization or union.

b. In addition thereto, anyone of the aforestated statements, which will be orally stated, will also be clearly written, in a prominent place in ten point bold type, on the masthead, of each publication, and will clearly appear on all other forms of letterheads, billheads and authorizations shown under the name Trade Union News in clear bold legible type.

Recommendation 1. The public interest requires that the Commission’s order of May 15, 1964, be altered and modified.

2. The use by respondents of the names or designations “Trade Union News” and “Trade Union News of New Jersey” with the written qualification “The Leading Independent Labor Newspaper” is insufficient to correct the impression that such publications are endorsed by, affiliated with, or are official publications of a labor or trade union and must be further clarified. TRADE UNION NEWS 1277 1271 Record Certification—Proceedings Report 3. Excision of the words “Trade” and “Union” from respondents’ trade name would be a harsh and drastic remedy causing respondents significant financial loss.

_ 4, The use by respondents in both oral solicitations for advertising and on all printed materials including the masthead of the news- ‘papers, letterheads, billheads, and stationery of the qualifying statement “Not affiliated with, endorsed by, or an official publication of any labor organization or union” would appear to be sufficient to eliminate the tendency of the trade name to mislead and to deceive. This recommendation is primarily based on the following testimony of Henry Bacarisse, Jr.:

HEARING EXAMINER JACKSON: Would the word “non-affiliated” mean anything to you? THE WITNESS: I think in this particular case it would certainly be much more meaningful than “independent” (Tr. 351). Certification The record consisting of 305 pages of testimony (Tr. 303-607), 18 exhibits for the Commission (CX 50A-CX 62), and 18 exhibits for the respondents (RX 1-RX 18), together with the briefs, pro- ' posed findings and conclusions submitted by the parties are hereby certified to the Commission.

Finprnes or Fact, Conciusions, AND Frinau Orver The Commission having reopened this proceeding and having issued its order of June 19, 1969, to show cause why the order issued May 15, 1964 [65 F.T.C. 650], should not be modified, and The hearing examiner, pursuant to Commission direction, having conducted hearings and having certified the record of said hearings to the Commission together with findings of fact and his recommendation that the order of May 15, 1964, be altered and modified, and The Commission having determined that the public interest requires modification of the order of May 15, 1964, now enters its Findings of Fact, Conclusions, and Final Order. FINDINGS OF FACT AND CONCLUSIONS 1. The Commission adopts the hearing examiner’s “Findings of Fact” and “Conclusionary Findings of Fact” set forth in his Certification of Record and Report of Proceedings dated June 22, 1970. 2, The Commission further finds, as stated by the hearing exami- Aer ann m4 oa Final Order V7 ETC.

ner in his “Recommendation,” that the use by respondents both in oral solicitations for advertising and on all printed materials including the masthead of the newspapers, letterheads, billheads, and stationery of the qualifying statement “Not affiliated with, endorsed by, or an official publication of any labor organization or union” would appear to be sufficient to eliminate the tendency of the trade name to mislead and deceive.

3. The public interest requires modification of the order of May 15, 1964 [65 F.T.C. 650], in accordance with the above findings of fact.

FINAL ORDER It is ordered, That respondents Trade Advertising Associates, Inc., a corporation, and its officers, and Joseph Lash and Eugene Serels, individually and as officers of said corporation, and as copartners. trading and doing business as Trade Union News, and respondents’ representatives, agents and employees, directly or through any corporate or other device, in connection with the soliciting, offering for sale or sale in commerce of advertising space in the newspaper designated as Trade Union News, or any other publication, whether published under that name, or any other name, and in connection with the offering for sale, sale or distribution of said newspaper, or any other publication, in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Using the names or designations Trade Union News, Trade Union News of New Jersey or using the words trade, labor, union, guild, brotherhood, workers or any other word, words or combination of words of similar import or meaning in the title of their publications without disclosing in a clear and conspicuous manner in all oral solicitations for advertising and on all printed materials including the masthead of the newspapers, letterheads, billheads, and stationery the statement “Not affiliated with, endorsed by, or an official publication of any labor organization or union.”

2. Representing, directly or by implication, that any of their publications are endorsed by, affiliated with, or an official publication of, or otherwise connected with a labor union or trade union.

3. Representing that any of their publications was the “Winner of the National Trade Union Advertising Award” or “Winner of International Editorial Excellence Award,” or otherwise Loa UINLUIN INKWS LZdy 1271 Final Order misrepresenting that any of the respondents’ publications have been presented with an award or distinction as a result of a competitive contest.

4, Misrepresenting in any manner that competitive contests are or have been conducted by impartial and qualified individuals to determine the relative quality or merits of any of their publications in comparison with competing publications. 5. Placing, printing or publishing any advertisement on behalf of any person, firm, or corporation, in any of respondents’ publications without a prior order or agreement to purchase said advertisement.

6. Sending bills, letters or notices to any person, firm or corporation, with regard to an advertisement which has been or is to be printed, inserted or published on behalf of said person, firm or corporation, or in any other manner seeking to exact payment for any such advertisement, without a bona fide order or agreement to purchase said advertisement. It is further ordered, That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with this order. In vraoe Marrer or