Inland Empire Roofing Contractors Association

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IN THE MATTER OF INLAND EMPIRE ROOFING CONTRACTORS ASSOCIATION CONSENT ORDER , ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-2968. Complaint, May 22, 1979 - Decision, May 22, 1979 This consent order, among other things, requires a Spokane, Wash. roofing association to cease entering into agreements with others to establish and maintain terms of guarantees, prices, or other conditions of sale in connection with the sale of roofs and related services; suggesting that members adhere to any particular price, guarantee, or other condition of sale; and limiting by any means a member s right to give any guarantee, price or other term or condition of sale to its customers. The association is also prohibited from investigating and/or policing its members with regard to prices charged and guarantees imposed in the sale of their products and services. Appearances For the Commission: Steuan D. Phillips. For the respondent: Harold J Triesch, Spokane, Washington. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Inland Empire Roofing Contractors Association, an unincorporated association hereinafter sometimes referred to as respondent, has violated the provisions of the Federal Trade Commission Act, as amended, as more particularly set forth herein, and it appearing to the Commission that a proceeding in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Inland Empire Roofing Contractors Association is an unincorporated association organized, existing, and doing business under and by virtue of the laws of the State of Washington. Respondent's membership presently consists of nine (9) roofing contractors located in eastern Washington and western Idaho. It consisted of twelve (12) roofing contractors at the time the acts referred to herein occurred. Its offce is located at East 130 Sprague Ave. , Spokane, Washington.

PAR. 2. The respondent is a trade association established for the benefit of its members. It acts as the bargaining agent for and 868 Complaint negotiates labor contracts on behalf of its members with certain labor unions. The association handles grievances and other administrative problems under the terms and conditions of any collective bargaining contract entered into on behalf of its members. The association has gathered and disseminated information to its respective members concerning the guarantees which are available in the roofing contracting business for new and replacement roofs and which are available and used in regard to waterproofing and dampproofing contracts. As a result of the conduct and activities of respondent and its members as described above, the acts and practices herein complained of are in or affect "commerce" within the meaning of the Federal Trade Commission Act, as amended, and respondent is subject to the jurisdiction of the Federal Trade Commission.

PAR. 3. On or about February 15 1974, the members of the Inland Empire Roofing Contractors Association decided to modify the terms of guarantees then being offered with regard to waterproofing and dampproofing contracts. Some time between March 22, 1974 and April 19, 1974, offcers and directors of said association acting within the scope of their authority and at the direction of the Inland Empire Roofing Contractors Association, met with members of the Seattlebased Roofing Contractors Association and discussed the terms of guarantees that would be Dffered by members of each respective association for waterproofing and dampproofing contracts. Some time after April 19, 1974, the Inland Empire Roofing Contractors Association adopted or proposed adopting an arrangement whereby no guarantees would be issued by its members for waterproofing or dampproofing work and that a two-year guarantee would be issued by its members for roofing work on all new and replacement roofs. On or about May 16, 1974, an agreement was reached by the members of the Inland Empire Roofing Contractors Association to the effect that no guarantees would be offered on waterproofing or dampproofing work and further that no guarantee for damage to roofs caused by certain wind conditions would be provided to customers of said members.

PAR. 4. The effects, among others, of the acts and practices alleged in Paragraph Three are as follows:

A. Terms of guarantees for new and replacement roofs have been fixed, stabilized or otherwise interfered with; B. Competition among member roofing contractors in providing roofing services has been restrained, hindered, frustrated and/or foreclosed;

Decision and Order 93 F. C. Customers of roofing servces have ben deprived of information, options and servces pertinent to the selection of a roofer and the benefits of competition; and D. Member roofers have been restrained in their ability to compete and to make alternative guarantee terms available to customers.

PAR. 5. The aforesaid acts, practices, and methods of competition respondent constitute unfair methods of competition and unfair acts or practices in violation of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S. c. 45.

Chairman Pertschuk did not participate.

DECISION AND ORDER The Federal Trade Commission having initiate an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Seattle Reonal Ofce proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of the Federal Trade Commission Act; and The respondent, its attorney and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission s Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure described in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Inland Empire Roofing Contractors Association is an unincorporated association organized, existing and doing business under and by virtue of the laws of the State of Washington, with its office and principal place of business located at East 130 Sprague Ave., in the City of Spokane, State of Washington. INLAND EMPIRE ROOFING CONTRACTORS ASSOC.

868 Decision and Order 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER A. Definitions established for the purpose of the following order provisions are:

1. "Other related services" includes but is not limited to, repairing of roofs, inspecting of roofs, waterproofing and dampproofing of roofs, and estimating costs of repair or installation of roofs. 2. "Others not party hereto" means any individual, individual proprietorship, partnership, firm, corporation, association or any other form of legal or business entity.

A. It is ordered. That respondent Inland Empire Roofing Contractors Association, an unincorporated association, its successors and assigns, and its agents, representatives, and employees, directly or through any corporation, subsidiary, division or any other device, in connection with the advertising, offering for sale, sale and installation of new or replacement roofs or other related services in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, as amended, do forthwith cease and desist from: 1. Entering into any contract, agreement, course of conduct, or understanding between itself and others not party hereto to fix establish, stabilize, or maintain, the length or other term of any guarantee;

2. Entering into any contract, agreement, course of conduct, or understanding between itself and others not party hereto to fix establish, stabilize or maintain any price or other term or condition of sale in connection with the sale and installation of new or replacement roofs or for performing other related services. A. It is further ordered, That respondent Inland Empire Roofing Contractors Association, an unincorporated association, its succes- SOfS and assigns, and its agents, representatives, and employees. directly or through any corporation, subsidiary, division or any other device, in connection with the advertising, offering for sale, sale and Decision and Order 93 F'. installation of new or replacement roofs or other related services in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, as amended, do forthwith cease and desist from:

1. Urging, recommending, or suggesting that any of its members or any other person adopt or adhere to any particular guarantee or to any price or other term or condition of sale in connection with the sale and installation of new or replacement roofs or for performing other related services;

2. Adopting, adhering to, maintaining, enforcing or claiming any rights under any bylaw, rule, regulation, plan or program which limits in any way a member s right to give or offer a guarantee or any price or other term or condition of sale to any customer or prospective customer in connection with the sale or installation of a new or replacement roof or for performing other related services; 3. Investigating and/or policing a price or guarantee term charged or imposed by any member of the association or any other person in connection with the installation of new or replacement roofs.

A. It is further ordered, That respondent Inland Empire Roofing Contractors Association shall within sixty (60) days after the date of service of this order, mail a copy to each of its existing members and to each person who was a member at any time from June 30, 1973 to date of service of this order, and furnish a copy of this order to each prospective member for a period of five (5) years after the date service of this order.

B. It is further ordered, That respondent notify the Commission at least thirty (30) days prior to any proposed change in the respondent such as dissolution, assignment or sale resulting in the emergence of a successor corporation or association, the creation or dissolution of subsidiaries or any other change in the association which may affect compliance obligations arising out of the order. C. It is further ordered, That the respondent herein shall within sixty (60) days after service on it of this order, fie with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order. Chairman Pertschuk did not participate.

873 Complaint