In a seminal description of the rule of reason, Justice Louis Brandeis wrote that the “effect, actual or probable [of a restraint],…the reason for adopting the particular remedy, [and] the purpose or end sought to be attained” are all relevant facts because “knowledge of intent may help the court to interpret facts and to predict consequences.”1 When judges fail to fully analyze the context of a challenged restraint, they may presume that it is anticompetitive despite a factual background and a legal and economic rationale impelling the opposite conclusion. In a recent en banc opinion of the U.S. Court of Appeals for the Ninth Circuit, California v. Safeway Inc.,2 the court reversed a panel’s decision that had presumed that a temporary profit-sharing agreement among members of a multi-employer bargaining unit (MEBU) was anticompetitive without properly considering the visceral conditions spawning the agreement.

Although much of the Ninth Circuit opinion is devoted to the question of whether the non-statutory labor exemption (NSLE) applied to the profit-sharing agreement, this article does not address this issue, particularly because as the dissent notes, the ruling on the NSLE is “very likely an advisory opinion and beyond the scope of our Article III jurisdiction.”3 Instead, we are intrigued by the decision’s discussion of the competitive analysis for a profit-sharing agreement among members of an MEBU under Section 1 of the Sherman Act.

‘California v. Safeway Inc.’

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]