In order to minimize the possibility of anti-trust problems, the Society for Vascular Surgery® (SVS) requires all of its officers, directors, members, and employees to abide by the terms of this anti-trust policy (Policy).
- No individual officer, director, member, employee, committee, local section, certification board, or other party is authorized to speak or act on behalf of SVS unless specifically granted such authorization by SVS in writing.
- The Board of Directors is the only party authorized to issue statements or adopt positions (public or otherwise) on behalf of SVS. Responses to questions or complaints from the public or from private parties must be handled in accordance with SVS’s Bylaws and its Policies.
- No individual officer, director, member, employee, committee, or other party is authorized to use SVS letterhead or SVS’s logo without the prior written consent of the Board of Directors, or its designee.
- Agendas for SVS meetings shall be prepared in advance, with prior review by an appropriate SVS staff member, and followed at the meeting. Topics not included on the agenda shall not be discussed.
- Only meetings of SVS members that have been approved by SVS shall be considered SVS meetings. Board members, committee members, local section members, and meeting attendees shall not participate in “rump” sessions (e.g., private group meetings, impromptu or informal group gatherings) outside of regularly scheduled meetings to discuss items not on the agenda.
- A secretary shall be appointed to take minutes of all meetings. Minutes shall be submitted to the SVS office and reviewed by an appropriate SVS employee prior to distribution. Upon approval, such minutes shall become the “official minutes” retained by SVS. Members should not keep their own minutes.
- Periodic written reports to the SVS Board of Directors are required from all SVS committees, employees, and officers reflecting all pending matters, requests for action, and approvals for preliminary decisions.
- Committees can act only within the scope of their authority. Recommendations shall be made to the Board of Directors for other actions to be taken. All committee correspondence must be sent out through the SVS office.
- All SVS officers, directors, members, employees, and committees shall adhere to the SVS Anti-trust Guidelines, a copy which are attached hereto as Exhibit A.
- A copy of this Policy shall be made available to all SVS members and employees, and the need to comply with its terms shall be communicated regularly.
SVS Anti-trust Guidelines
Professional societies, although well recognized as valuable tools of American society, are subject to strict scrutiny by both federal and state governments. While such scrutiny should not prevent participation in, and support for, a professional society, members should be aware of, and comply with, certain relevant legal principles. Compliance with these laws does not prevent SVS members from lawfully engaging in a wide variety of group activities, as long as the purpose or intended effect of the activities is promotion of the profession as a whole, and not to promote anti-competitive activities or to act in restraint of trade or commerce.
The single most significant law affecting organizations like SVS is the Sherman Anti-trust Act, which makes unlawful every contract, combination or conspiracy in restraint of trade or commerce. The Federal Trade Commission Act, the Clayton Anti-trust Act, and the Robinson-Patman Act also are applicable to societies, for they also forbid anti-competitive activities. Furthermore, virtually every state has enacted anti-trust laws similar to the Sherman Act.
Between the state and federal laws, there is no organization too small or too localized to escape the possibility of a civil or criminal anti-trust suit. It is thus imperative that every society member, regardless of the size of the society or the size of those comprising the membership, refrain from indulging in any activity which may be the basis for a federal or state anti-trust action.
There are four main areas of anti-trust concern for societies: price fixing, membership, self-regulation, and standardization and certification. The area of greatest concern historically has been price fixing. The government may infer a violation of the Sherman Act by the mere fact that all or most of the members of the society are doing the same thing with respect to prices or other terms and conditions of trade. It is not required that there be an actual agreement, written or unwritten, to set prices. Rather, price fixing is a very broad term which includes any concerted effort or action which has an effect on prices, terms or conditions of trade, or on competition. Moreover, such concerted actions (affecting prices) cannot be justified by showing that they will benefit customers, or that the prices set are otherwise reasonable.
Accordingly, SVS members should refrain from any discussion which may provide the basis for an inference that the members agreed to take any action relating to prices, services, production, allocation of markets, or any other matter having a market effect. These discussions should be avoided both at formal meetings and informal gatherings. In fact, informal gatherings of society members are often looked upon with suspicion by the government.
The following topics are some examples of the subjects which should not be discussed at regular meetings or at so-called “rump sessions:”
- Do not discuss current or future prices (be very careful of discussions of past prices).
- Do not discuss what is a fair profit level.
- Do not discuss standardizing or stabilizing prices or pricing procedures.
- Do not discuss cash discounts or credit terms.
- Do not discuss controlling sales or production or allocating markets or customers and/or patients. (This applies to services as well as products.)
- Do not complain to a competitor that his or her prices constitute unfair trade practices and do not refuse to deal with a company or individual because of pricing or distribution practices.
- Do not discuss anticipated wage rates.
In as much as society anti-trust violations can subject all society members to criminal and civil liability, members should be aware of the legal risks in regard to membership policy and industry self-regulation. Because membership in a society can be of substantial benefit, societies must ensure that they do not in any way restrict or prejudice competitors from membership or illegally discriminate against non-members. Membership policies should avoid:
- Restrictions on dealing with non-members.
- Excluding from membership any qualified participant.
- Limitations on access to society information.
In encouraging certain conduct, societies may lawfully establish a code of ethics. Codes that may have an anti-competitive effect, however, such as those banning advertising or competitive bidding, are prohibited. In general, professional self-regulation, ordinarily manifested by a code of ethics, must avoid:
- Requiring refusal to deal with any member violating the society’s code of ethics.
- Arbitrary enforcement of the code.
- Unreasonably severe penalties for violation of the code.
- Regulations or polices which have price fixing implications, such as preventing the advertising of prices.
Product and professional certification and standardization programs can be among the most beneficial activities in which societies engage. There is a substantial risk, however, that such programs will be used to restrict competition or discriminate against certain competitors. Thus, the following guidelines should be followed:
- Standards or certification should be voluntary. Certification, however, can be a requirement for membership in a voluntary organization.
- Non-members must be allowed to participate although they may be charged a reasonable, higher fee.
- Proposed voluntary standards should be widely circulated for comment by affected parties.
- Performance, rather than design standards, should be used.
- Periodic review of standards and certification criteria should occur in order to account for changing technology.
- Due process procedures for denials should be established.
- Certification or standard validation by an independent authority may be beneficial.
A professional society may be held strictly liable for the illegal conduct of its members and agents acting under the society’s name even if the society has not authorized the activity. Thus, a society must ensure that its members and agents are not using the society’s legitimate activities for anticompetitive purposes. Societies which undertake standardization and certification programs are particularly vulnerable to this type of liability, and should closely monitor such activities. Thus, societies should consider:
- Adopting written guidelines outlining the authority and responsibility of members and employees, including who may “speak” for the society and who may use society letterhead.
- Requiring written committee reports of pending and completed matters.
- Implementing due process procedures for decision-making and dispute resolutions.
The penalties for violating federal and state antitrust laws are severe. The Sherman Act is a criminal conspiracy statute. Therefore, active participants, as well as individuals who silently acquiesce in illegal activity, can be held criminally responsible. Each individual and each corporation which is found guilty of a criminal violation of the Sherman Act may be fined up to US$1,000,000 and US$1 million respectively. Individuals and corporate officers may be imprisoned for up to 10 years. Additionally, there are civil penalties such as cease and desist orders, requiring government supervision of society members, restricting the society’s activities and disbanding the society.
The greater likelihood of occurrence, and possibly the more severe penalty, may be civil suits brought by competitors or even consumers. Civil anti-trust actions result in treble damage awards. Thus, an ant-itrust violation which caused US$500,000 in damages would result in an award of US$1.5 million.
The government’s attitude towards societies requires societies and their members to, at all times, conduct their business openly and avoid any semblance of activity which might lead to the belief that society members had agreed, even informally, to something that could have an effect on prices or competition. Because of the importance of the antitrust laws to the successful functioning of the American economy, as well as the practical importance of professional societies to the system, strict compliance with the anti-trust laws by societies and their members is critical.
Approved by SVS Board of Directors, January 2010