Against Union Price Fixers

The Justice Department's Antitrust Division last week opened a long-planned campaign to apply the antitrust laws to labor unions. Indicted in Manhattan after nine months of grand jury hearings was the boss of Local 25 of the International Ladies' Garment Workers' Union, the biggest local in the blousemaking industry. The Justice Department charged that the I.L.G.W.U. local took part, along with three trade associations, in a conspiracy to fix prices of ladies' blouses, a $300 million industry, and to allocate business among blousemakers. Also charged with criminal conspiracy was Harry Strasser, a partner with slain Gangster Albert Anastasia in a dress company. According to Justice, Strasser twice played a prominent role in lining up blouse subcontractors to join with the union and the jobbers in eliminating cut-wage competition and in jacking up prices.

Drawing the Line. What the Justice Department hopes to prove in the I.L.G.W.U. case, and in a number of other indictments expected soon from grand juries sitting in Omaha, Chicago and other cities, is that labor unions are entitled to exemption from the Sherman Act under the Norris-La Guardia Anti-Injunction Act only so long as they confine themselves to negotiating higher wages, or other legitimate labor objectives. When they step over the line and begin to use labor union power to fix prices and allocate markets, then the Justice Department intends to wheel up the big guns of the Sherman Act.

As early as 1954, the Antitrust Division began quietly bringing a series of apparently unrelated but actually closely dovetailed labor cases. They were intended to lay the groundwork for its campaign against labor unions which it feels have trampled on the Sherman Act, e.g., the Minnesota Milk Drivers Union enjoined from forcing stores to jack up the prices of milk so the drivers could collect larger commissions.

In all the cases, appeals courts have upheld the Justice Department, giving it confidence that it is on solid legal ground. But the earlier cases were only the preliminaries to the real match, which is now opening. This is the fight to break down trade restraints in which underworld characters have muscled in on legitimate unions and business.

"Frontal Attack." The indictment caused a wince of pain from the department because the trustbusters had begun their campaign against the highly regarded International Ladies' Garment Workers' Union and not against some out-of-favor union such as Jimmy Hoffa's Teamsters. But First Assistant Antitrust Chief Robert Bicks said: "It would be a perversion of our function to discriminate between 'good' and 'bad' unions. The question is whether unions are violating the Sherman Act." I.L.G.W.U. President David Dubinsky, who has fought hard and with distinction against sweatshop operators and racketeers in the garment industry, charged that the prosecution of only one of his 500-odd locals was "a frontal attack by the Republican Administration against basic safeguards won on the picket line and across the negotiating table over the last six decades."

Actually, the Antitrust drive to stop fixing prices and allocating territories in the garment industry began a long time ago. In the Truman Administration the Antitrust Division indicted the Women's Sportswear Manufacturers Association for a conspiracy to fix prices and funnel orders to Association members designated by the union as in good standing. But at that time it was not the division policy to name I.L.G.W.U. as a defendant in the suit, only the employer group. Says Bicks: "We waited years for the unions to clean up this kind of situation. They did not. So we finally indicted a union."

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