At the last meeting of TLMI, in Las Vegas, Mike Weir made a fascinating observation. He has met, personally, every individual who has ever held the title of president of the Tag & Label Manufacturers Institute, and of its predecessor organization, the Tag Manufacturers Institute. The TMI dates back to 1933, and of course Mike wasn't at the early meetings of that group. But he has shaken hands with every industry leader from way back. That's quite an accomplishment for someone who is not a label or tag converter. He is, in a sense, a supplier, because he has been providing legal advice to TLMI and TMI for half a century.
Michael B. Weir
His area of expertise is antitrust law. His main job as the legal adviser to the label industry group has been to keep the members informed of laws governing antitrust issues, and to answer questions that they might have on that subject. At the start of each meeting he would dutifully take the microphone and caution TLMI members about discussing price and other subjects that could be considered legally out of bounds. As he announced at his retirement: "Under my watch, no antitrust charges have been levied against any member of TLMI related to its membership in the organization."
Mike Weir received his undergraduate degree from Yale College, and his law degree from University of Pennsylvania Law School. Throughout his career he has focused on antitrust issues and representation of trade associations, at one time working with 30 such groups. He has been of counsel in the law firm of Whitman Breed Abbott & Morgan, of Greenwich, CT, USA, which he joined nine years ago after retiring from Chadbourne & Parke in New York City, where he had spent more than 20 years.
Legal representation for TLMI now passes to Anthony M. Macleod, a partner at Whitman Breed Abbot & Morgan.
L&NW Editor Jack Kenny interviewed Mike Weir at his Greenwich office recently, during which the attorney elaborated on his role as the association's advisor, the legal history of the industrial group, and the successful performance of the association today. The following is a transcript of that interview.
LNW: How would you compare the association of old with what it is today?
Weir: It's quite similar. It is a group of mostly small, entrepreneurs; with a few exceptions, there are no huge companies involved. They are largely small to medium sized entrepreneurs who are interested in information that they cannot get on their own: statistics and industry information, government affairs information, which they are not equipped to obtain, whereas big companies are. And environmental issues.
Labor relations information is important as well. We never were an organization to interface with unions, but we did provide wage information, salary and pay classification information, things of that sort, to assist the members in dealing with unions or with their employees if they were not organized.
LNW: What is your role as legal advisor?
Weir: Primarily to keep the association from running afoul of antitrust problems. Many small manufacturers don't believe it applies to them particularly. Many small manufacturers feel that this is a problem of giant corporations, which it is, but very often small manufacturers become enmeshed in antitrust problems. My law firm first became involved because TMI — not TLMI — was prosecuted by the Federal Trade Commission back in the early 1950s for restrictive practices. The case went to court and we successfully defended it.
The association was started by a management consultant by the name of Frank H. Baxter. Back in the '30s, during the depths of the Depression, the National Recovery Administration decreed that every industry should have, if not an association, then what they called a code authority. The purpose of the code authority was to help the association members climb up out of the Depression, which affected the entire country. One of the ways that that was done was through literally raising prices collectively, which subsequently was held to be illegal in 1936 in a case called the Schecter Poultry case. And the National Recovery Administration was found to be illegal and was terminated by the courts. But many industries (ultimately resulting in legal problems) continued the practices that they had learned and had been required to engage in by the National Recovery Administration, which included price fixing — the exchange of price information.
When the association was formed in 1933 by Frank Baxter, he installed what he called the Baxter Plan. The Baxter Plan was a price report plan. Essentially, whenever any manufacturer sold a product or took a contract at a price that was lower than his published list price, he had to furnish that information within 24 hours to the headquarters, which then disseminated that information to all the participants.
The Federal Trade Commission said that was tantamount to price fixing and issued a cease and desist order. The United States Court of Appeals for the First Circuit in Boston held that it was not price fixing, that it was merely dissemination of price information, because there was no condition that people adjust their prices to any information they received. But the theory behind the plan was that it could protect the members against lying customers. If you knew what other people were charging, and a customer said he could get it elsewhere for less, you could know by looking at your daily sheets whether or not he was telling you the truth. That was the Baxter Plan, and that continued probably until about the early 1960s — for the tag manufacturers, not for labels.
LNW: What was the defense?
Weir: The defense was that there was no requirement that anybody adhere to any specific price, and the court made much of the fact that the information was publicly available. It was merely information that could be gotten through diligent detective work, and this just made it easier. Today I don't think that case would go the way it did. But it went that way at the time, in favor of the defendants.
LNW: What kinds of legal temptations can a label printer encounter?
Weir: Any manufacturer or seller of a product of any kind would love to see the price go up, and so often no one has the courage to raise the price independently of others. But if they knew that others would go along with them by some pre-arrangement, or tacit agreement, there would be far more bravery in the raising of prices. But today people don't really know if they'll be followed. Somebody will take a stab at raising a price, and maybe some will follow and maybe others will cut the legs out from under the person who tries to raise the price.
Sometimes these manufacturers like a price increase of the raw material, because that gives them an excuse to raise the price. If it's done purely independently with no pre-arrangement, then it's not illegal.
LNW: What do people in our industry need to know about antitrust and price issues? Do they know already?
Weir: The big ones know. We get new members at every meeting, which is why I go through this song and dance, in the hope that somebody will pay attention. What we want them to avoid is any attempt to collude on pricing, or even give the appearance of colluding on pricing. The larger members are keenly aware of the issue and how expensive it is if they get caught doing something wrong. The smaller ones, who knows?
LNW: From your perspective, how has the industry evolved?
Weir: The first pressure sensitive labels were not very satisfactory. They peeled off and separated. But the technology has improved dramatically. The artistry that you see in the labels in the competitions has improved dramatically. Some of them are true works of art. Bit by bit the utility of the pressure sensitive label, as opposed to the heat applied label or the gummed label, has catapulted this industry to great success, to the point where the other forms of labels have suffered from the increased use of pressure sensitive.
Also I think the change in retailing has had a big effect, in that products are expected to sell themselves. You go into a box store and try to find a salesman to tell you something. Forget it. The product has to sell itself by and large, and that is done by labels, both informative and artistic. Either by advertising or reading the box. That huge change in retailing has catapulted product identification into the wonderful business that it is today. In the past 50 years you've had technological improvement, artistic improvement and the change in retail.
The businessman is far more sophisticated. The purpose of the association is to enable people to become more sophisticated, by learning from their competitors and the general educational effort about the industry that is conducted by associations. A current example right now is RFID, radio frequency identification. Until a couple of years ago nobody had heard about it. Now we have speakers talk about it, and it's still in its infancy, but as the concept develops and the larger retailers insist upon it from their suppliers, you will see a whole new field development.
LNW: How do you view the performance of TLMI?
Weir: I think that TLMI is one of the more successful smaller associations. For what it has in the way of resources, and the fact that it has mostly smaller members, I think that TLMI does a great job. A lot of its success is through interpersonal relations: getting people to meetings, getting people to know one another, talk with one another, and to learn from one another. That's very important, particularly when you're talking about smaller manufacturers who don't have the personnel to reach out to the world and find out what's going on. They're islands to themselves, and albeit so, many of them have been successful from an economic standpoint. I think a lot of it is attributable to what they have learned by participating in TLMI.