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Originally Posted by Kreisler
Don't argue with me. Argue with the US Supreme Court:

http://www.kkrlaw.com/changes/ftc.htm

Originally Posted by laguna_greg
Originally Posted by Kreisler
FYI - I believe the argument is that since MTNA provides financial benefits to its members in the form of affiliate programs and group insurance programs, it waives its exemption as a non-profit. (Because while MTNA is a non-profit, it brokers services that directly affects the profits of its members.)



Kreisler,

Many non-profits offer such services to their members when cash flow will support it. My own professional association is a 501(c)3, offers such services, and retains its tax-exempt status.

I've sat on the boards of two 501(c)3's. And such a non-profit can 1- engage in business including selling things, 2- make a profit, and 3- offer business and professional services to its members. The only thing it can't do is sell an equity interest in the corporation, nor can it distribute profits to shareholders (because there can't be any). The National Safety Council is one such non-profit. They are one of the leading developers and resellers of safety training and education materials in the country, with very healthy sales every year.

But are you intelligent? Or only "seemingly intelligent"? laugh

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Originally Posted by Gary D.
But are you intelligent? Or only "seemingly intelligent"? laugh

Ha! ha


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Originally Posted by Kreisler
Don't argue with me. Argue with the US Supreme Court:

http://www.kkrlaw.com/changes/ftc.htm

[quote=laguna_greg][quote=Kreisler]FYI - I believe the argument is that since MTNA provides financial benefits to its members in the form of affiliate programs and group insurance programs, it waives its exemption as a non-profit. (Because while MTNA is a non-profit, it brokers services that directly affects the profits of its members.)



But the argument should be dead in the water. Substantial financial benefit to members cannot be established. This condition must be met, and isn't met. (The link has the first sentence referring to "substantial financial benefit".)

A discount on insurance rates is hardly a substantial financial benefit. There is not a single member whose financial benefits of membership exceed the cost of dues.

Edit: This widespread incompetence reminds me of Sherlock Holmes describing Scotland Yard: "They never miss an opportunity to miss an opportunity". In other words, the hounds of detective work are spinning their wheels in the wrong place.

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Originally Posted by TimR

In other words, the MTNA did what every other professional organization in the past 40 years has had to do, make its Code of Ethics comply with US law.

The strategy of hoping not to be noticed worked for 40 years, until one of their members filed a complaint.

I don't think that's a particularly good law in this application, nor do I think there's any huge societal good being served, but it remains the law.


Call me stupid but I'm failing to understand what part of what law the deleted Code is infringing on.

"The teacher shall respect the integrity of other teacher’s studios and shall not actively recruit students from another studio."

What exactly does "actively recruit" mean? Would said recruiter stand watch at "other teacher's" studio with camera, identifying possible recruitees? Would said recruiter enter into "other teacher's" studio in the dead of night, Watergate style, and steal the list and addresses of students? Or even less stealthily, would recruiter attend the piano recitals of "other teacher" and hand out flyers to innocent 7 year olds? Trying to imagine how this sort of recruiting would work in the real world just comes up with these sorts of absurdities. But if anyone has some actual ideas, I'd be interested. No, I'm not a piano teacher but a friend of mine is. smile

If nothing else, even if this is a matter of "complying with the law" against monopolistic practise (really??? I'm failing to find any explanation of this) I hardly see how a higher ethical standard than what the law is stands as an infringement. Ethics are just that, ethics! They aren't a law other than the sort of law you guide your own self by. If we're now saying that codes of ethics are to be scrutinized for legalities, then what's the point of having codes of ethics? Mere 19th century anachronisms?

But completetly on the other hand, in regards to the original Op Ed piece, if the writer's opinion is for unrestrained free trade, I'm unclear why she even uses this as a cause celebre. Her single-minded fury at any and all government intrusion blinds her to the fact that she should actually be on the side of the FTC on this! She should also want this ethical code removed in the name of "free trade".

Am I crazy? What am I missing?


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Originally Posted by toyboy
If we're now saying that codes of ethics are to be scrutinized for legalities, then what's the point of having codes of ethics? Mere 19th century anachronisms?



We're not now saying this. This legal history goes back at least 40 years, and all sorts of membership societies have been forced to modify codes of ethics. Remember that the FTC only has jurisdiction if it appears to be restraint of free trade. If it were anything else, like racism, safety, environmental, etc., they wouldn't be involved.

Quote
But completetly on the other hand, in regards to the original Op Ed piece, if the writer's opinion is for unrestrained free trade, I'm unclear why she even uses this as a cause celebre. Her single-minded fury at any and all government intrusion blinds her to the fact that she should actually be on the side of the FTC on this! She should also want this ethical code removed in the name of "free trade".

Am I crazy? What am I missing?


You're not crazy, you're 100% correct.


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Originally Posted by toyboy
What exactly does "actively recruit" mean? Would said recruiter stand watch at "other teacher's" studio with camera, identifying possible recruitees? Would said recruiter enter into "other teacher's" studio in the dead of night, Watergate style, and steal the list and addresses of students? Or even less stealthily, would recruiter attend the piano recitals of "other teacher" and hand out flyers to innocent 7 year olds? Trying to imagine how this sort of recruiting would work in the real world just comes up with these sorts of absurdities. But if anyone has some actual ideas, I'd be interested. No, I'm not a piano teacher but a friend of mine is. smile

This actually happens and has been the subject of many forum topics in the past. A search of the data base will bring them up. Most common is the teacher who discovers the date of another teacher's student recital, attends as a guest, and then proceeds to badmouth the current teacher and tells parents that she can solve all the student's problems.

A second "recruitment" scenario happens this way: We take our students to a competition. The sponsor of the competition, generally an university music department, solicits the top performers. This actually happens, but word does spread quickly.

As for what you're missing, it's the context of the op-ed. It has nothing to do with free trade, MTNA, non-profits, etc. It's about the appearance of abusive use of power by the current Administration.


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OK it's decided then. I'm not crazy. I am naive.


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So Here's what I Did this Morning:

I called the DC and local offices of the senators in my state, Maria Cantwell and Patty Murray. I spoke with staff members from both offices. When I described the situation, including the ethics code in question, they all fell off their chairs laughing. They were well aware of the anti-trust laws and, like me, did not see how this could possibly apply to the MTNA. They wanted more information, which I am going to send them.

I urge you to do the same. Here's what I said:

"My name is _________. I'm a resident of your state, and I'm calling to discuss an investigation that the FTC is conducting of a professional association I belong to. It's the Musical Teachers' National Association. Yes that's right, piano teachers. I'm a local area piano teacher and senator________ represents me. I do not think that the MTNA could possibly be a barrier or restraint to trade in the piano teaching industry. I think the FTC is working outside of its mandate, and just doesn't have enough to do going after big companies like Google and Microsoft. And I'd like the senator to look into the matter. The MTNA issued a press release yesterday saying that they will comply with the FTC's demands because it simply does not have enough budget to litigate. I'm calling everyone I can think of to see if anyone will take an interest in this, and help us. Who can I send information to in your office?"

As I said in my previous posts, I'm going to call all my legislative rep's at the federal level. I'm also going to send a letter to president Obama's office. And I'm going to send out a press release to every media site I can think of. Then I'm going to tell everyone I know. You all should too.

Tim might be right. The FTC may be reading the law in such a way that it sees this action as its legitimate mandate. Well, I don't agree with that at all. This is not a right or proper use of our national resources, to harass and hamper small non-profits who have broken no laws, and well beyond their means to defend themselves. If it turns out that the FTC is acting within the purview of the law, then perhaps that law should be changed so groups like the MTNA can't be bothered by the likes of the FTC. Sometimes, all it takes is a little noise to accomplish this.

I'm going to be putting a letter and an info packet together to send to, well, anybody who'll listen. Does anybody want to help me?

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Originally Posted by Kreisler
Don't argue with me. Argue with the US Supreme Court:

http://www.kkrlaw.com/changes/ftc.htm

Originally Posted by laguna_greg
Originally Posted by Kreisler
FYI - I believe the argument is that since MTNA provides financial benefits to its members in the form of affiliate programs and group insurance programs, it waives its exemption as a non-profit. (Because while MTNA is a non-profit, it brokers services that directly affects the profits of its members.)



Kreisler,

Many non-profits offer such services to their members when cash flow will support it. My own professional association is a 501(c)3, offers such services, and retains its tax-exempt status.

I've sat on the boards of two 501(c)3's. And such a non-profit can 1- engage in business including selling things, 2- make a profit, and 3- offer business and professional services to its members. The only thing it can't do is sell an equity interest in the corporation, nor can it distribute profits to shareholders (because there can't be any). The National Safety Council is one such non-profit. They are one of the leading developers and resellers of safety training and education materials in the country, with very healthy sales every year.


Kreisler,

I had no intention of arguing with you. Sorry if I said the wrong thing.

However, the professional association in the decision, the Dental Association, has absolutely no resemblance to the MTNA in form or function, nor do its members derive a comparable financial benefit from membership.

Besides, I don't think the MTNA has any "for-profit service corporations" like other larger, better funded groups do. Their group health plan is provided by an outside vendor, not themselves. Same thing with any financial or brokerage services- they are provided by an outside vendor, a separate business entity, not a subsidiary of the MTNA.

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Greg, guess I'll be calling Cantwell, Murray, & Heck's offices tomorrow. Thanks for the suggested script. I had planned to write, and may still do so, because both emails and phone calls can be written off fairly easily, but letters are physical and something has to be done with them! What I've been doing is trying to get other teachers in the loop, my student's parents aware, and the general public here in Olympia.


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I'm not sure that script is a good strategy, because it seems to blur what you are asking for.

It seems to me there are two obvious options:

1) to claim that the MTNA does not in fact restrain trade,

or
2) to admit that the MTNA does restrain trade but should be exempt from FTC regulation.

It's going to be hard to defend 1) because MTNA does have the clauses in the old Code of Ethics, and there is a long history of legal precedents for written clauses in codes of ethics being found to be in restraint of trade. "Why did they put it in writing if they didn't expect it to have any effect?" would be a likely question from an administrative law judge.

You might be better off arguing 2) if you can find a smart lawyer who agrees. It's easy to find piano teachers who agree - but it's easy to find piano teachers who think they are exempt from copyright law, too. There's a reason lawyers don't teach piano..........some skills are specialized.

Going into the follow-on rant about intrusive government is unlikely to be productive. If you just need to vent, do it here.


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OK I'll vent.

Again risking yet more naivete and/or idealism on my part, what I would like to think is at play here is not only that the MTNA is a 5013c but is a cultural organization or at least a coming together of mutual cultural interests of those with goals above and beyond commerce. Those of us working in such groups, or to go even further and risk broaching the A word, as artists, while not 'above the law' or the need to make a living per se, see culture as, just that, culture. It is not all that difficult to imagine the motivation that caused the original ethics code to be written. The 'restraint of trade' was not only unimportant, it wasn't even on the radar. It was more a question of etiquette! It would be a given that piano teachers with their heads full of Beethoven, Mozart and Chopin would not be the sort of people that should be antagonising other teachers, people seen as colleagues not capitalistic competitors. The government then crashes the party.

How quaint you think that thought is almost decides where you land on this matter. If nothing else this whole matter speaks of how little revered the arts are in this country. Just another commodity to be regulated.


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Tim,

I appreciate your concerns, but you're mistaken.

I'm not an attorney, but I do know that the law can be argued both de jure, in what the law says, and de facto, in what the facts are. While de jure says that those ethics codes are in violation of the letter of the law and precedent set in court decisions, de facto says that they're not because the facts don't fit either the letter or spirit of the law. Which is what I've been saying all along.

Contrary to what you've said, it's a very simple matter to prove that the MTNA is not a monopoly, and cannot be. The only reason that argument will not be heard is because the organization can't afford to bring it in front of a judge.

Laws are not made by cool heads. They are made by loud mouths who make the most noise, and have the most clout. After the SCOTUS rules in a case, the only remedy left is to convince the legislature to amend the law. Or, as in this case, ask legislators to intervene in an instance where the letter and spirit of the law is being stretched out of shape, which applies here. Anti-trust laws were never intended to regulate non-profits, who have little or no effect on the market the way for-profit business entities do. That the SCOTUS has ruled in the matter is irrelevant. All that means is that the legislature can provide clarity where, right now, there is none.

My intention here is not to convince legislators of anything. All I'm trying to do is get them to look into it. And that is what I think we should all try to do. The facts speak largely and very plainly for themselves. All we have to do is bring it to their attention, and make a little, tiny noise in other quarters. The issue will sell itself.

Are you going to call any congressional rep's? You certainly don't have to use my script. What would you rather say?

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Originally Posted by toyboy
OK I'll vent.

Again risking yet more naivete and/or idealism on my part, what I would like to think is at play here is not only that the MTNA is a 5013c but is a cultural organization or at least a coming together of mutual cultural interests of those with goals above and beyond commerce.


That's certainly a valid viewpoint.

I think there's a subtext there. Are piano teachers running a professional business? Or are they hobbyists, with more of an emotional relationship to quasi family students than a practical relationship to customers? You can see some ambivalence here from time to time, in the discomfort some teachers have with asking for money, etc.

And in this case, perhaps, in the indignation felt that piano teachers should be seen as similar to other professions by a government regulatory agency.


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Originally Posted by laguna_greg
The only reason that argument will not be heard is because the organization can't afford to bring it in front of a judge.


I don't buy that. The MTNA has lawyers, better ones than the FTC. They've advised the MTNA there is little chance of prevailing, presumably based on long and voluminous legal precedent. This isn't an expensive trial process - the documents and precedents are already compiled; it's just a matter of composing a brief.

The FTC like most agencies is risk averse. They try very hard not to continue a case unless they are very confident.

While the merits of the case seem obvious to some piano teachers, the lawyers on both sides share the opinion the Codes need to change to comply with the law. In the end this is a legal argument, not a musical one. (note to self: ask my lawyer about pedalling Bach!)


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Originally Posted by TimR
Originally Posted by laguna_greg
The only reason that argument will not be heard is because the organization can't afford to bring it in front of a judge.


I don't buy that. The MTNA has lawyers, better ones than the FTC.


I'd be curious to know your sources for that information. I think you may be overestimating MTNA's budget and the nature of the counsel it retains.


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Originally Posted by Kreisler
Originally Posted by TimR
Originally Posted by laguna_greg
The only reason that argument will not be heard is because the organization can't afford to bring it in front of a judge.


I don't buy that. The MTNA has lawyers, better ones than the FTC.


I'd be curious to know your sources for that information. I think you may be overestimating MTNA's budget and the nature of the counsel it retains.


I am extrapolating from what I do know, and making a logical deduction. I could be wrong.

The FTC maintains 583 lawyers on salary at grades of GS-11 and GS-12. A GS-12 step 5 (take the midpoint) earns $68,310 annually. There are increases for high cost of living areas, but then you also have more costs in those areas. That's $32.73 per hour.

The MTNA doesn't maintain full time salaried lawyers. As far as I know, they hire legal services as needed from established firms.

There are no lawyers in reputable firms willing to work for $68k per hour. They would never pay off the loans for college plus law school.

According to the ABA, the average lawyer salary in DC is $152k. Not quite 3 times the government amount, but close.



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Originally Posted by TimR


Are piano teachers running a professional business? Or are they hobbyists, with more of an emotional relationship to quasi family students than a practical relationship to customers?


I'd go out on a very safe limb and say both. Certainly the former. To what degree the latter probably depends on the personality and inclinations/devotions of the teacher. If nothing else it's not soap they're selling.

This whole matter would be more important if there was some national chain called "Teachers R U" edging themselves into every community with their cookie cutter approach to piano teaching, finding out the current going rates and undercutting them, agressively advertising and mailing,.... oh wait, sorry that's "just" capitalism. My bad.


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Originally Posted by TimR
Originally Posted by Kreisler
Originally Posted by TimR
Originally Posted by laguna_greg
The only reason that argument will not be heard is because the organization can't afford to bring it in front of a judge.


I don't buy that. The MTNA has lawyers, better ones than the FTC.


I'd be curious to know your sources for that information. I think you may be overestimating MTNA's budget and the nature of the counsel it retains.


I am extrapolating from what I do know, and making a logical deduction. I could be wrong.

The FTC maintains 583 lawyers on salary at grades of GS-11 and GS-12. A GS-12 step 5 (take the midpoint) earns $68,310 annually. There are increases for high cost of living areas, but then you also have more costs in those areas. That's $32.73 per hour.

The MTNA doesn't maintain full time salaried lawyers. As far as I know, they hire legal services as needed from established firms.

There are no lawyers in reputable firms willing to work for $68k per hour. They would never pay off the loans for college plus law school.

According to the ABA, the average lawyer salary in DC is $152k. Not quite 3 times the government amount, but close.

And what is MTNA's budget allowance for legal fees? What would it cost to fight FTC? Let's return to MTNA's official statement released Dec. 2, 2013:

Quote
...the FTC offered MTNA the unappetizing choice of entering into a settlement or spending hundreds of thousands of membership dues dollars fighting the federal government. Moreover, the fight would have included affiliated state and local music teachers associations, which have neither the manpower nor the financial resources to take on the FTC....While the consent decree, which still must be approved by the FTC, imposes these time-consuming recordkeeping and training obligations on MTNA, it was the only viable alternative for MTNA to pursue.



I think it's pretty clear that MTNA determined they do not have the money to hire lawyers to fight this.


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Originally Posted by Morodiene

I think it's pretty clear that MTNA determined they do not have the money to hire lawyers to fight this.


It's clear that's the party line.

But from my experience with lawyers and government agencies, it is more likely that MTNA legal counsel told the board this one was not winnable.

There is a good 40 years of history of no organization winning this one. Codes of Ethics have consistently been held to be restraint of trade and therefore required to be rewritten. I'm sure that's what the MTNA lawyers told the board.


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