Collective Bargaining and Competition Law: A Comparative Study on the Media, Arts, and Entertainment Sectors

Posted by D. Daniel Sokol

Shlomit Yanisky-Ravid ONO Academic College; Yale Law School has posted Collective Bargaining and Competition Law: A Comparative Study on the Media, Arts, and Entertainment Sectors.

ABSTRACT: The conflict between collective bargaining and competition law is not necessarily new. However, while not completely immune to the rules of competition law, it is widely acknowledged that collective agreements concluded in good faith, dealing with core subjects such as wages and working conditions are in principle legal and therefore fall outside the scope of competition law.

Yet, since there are few legislations providing for clear statutory exemptions that remove collective bargaining from the range of competition laws, it has been mostly a matter for the courts to harmonize this conflicting relationship at times. At EU level, for example, the exemption was supported by the decisions of the European Court of Justice (ECJ) in the Albany, Brentjens and Drijvende Bokken cases. For instance, in Albany, the ECJ held that: “It is beyond question that certain restrictions of competition are inherent in collective agreements between organisations representing employers and workers. However, the social policy objectives pursued by such agreements would be seriously undermined if management and labour were subject to Article 85(1) of the Treaty [now Article 101(1) of the Treaty on the Functioning of the European Union (TFEU)] when seeking jointly to adopt measures to improve conditions of work and employment. It therefore follows from an interpretation of the provisions of the Treaty as a whole which is both effective and consistent that agreements concluded in the context of collective negotiations between management and labour in pursuit of such objectives must, by virtue of their nature and purpose, be regarded as falling outside the scope of Article 85(1) of the Treaty.”

These decisions, however, have been given a narrow interpretation and competition authorities in a number of countries have been particularly active lately, targeting some categories of workers which have concluded collective agreements on the grounds that these are agreements between “undertakings” that are aimed at “price-fixing” and therefore restrict competition. This has specially affected workers in the media, art and entertainment sectors (but not only), a number of which are “self-employed.”

One can argue that it would be enough to acquire the status of “employee” to avoid the proceedings conducted by competition authorities. However, the issue of the employment relationship may be crucial, as those of these workers who work as employees under a “work for hire” legislation automatically assign their intellectual property rights to their employer. In this latter case, the only way for workers to retain their IP rights is to declare themselves as “self-employed.”