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Section 1 of the Sherman Act, which is codified at 15 U.S.C. \u00a7 1, forbids any restraint of trade imposed by contract, combination, or conspiracy. A few trade restraints are unlawful per se, but most trade restraints are condemned under Section 1 only if they are shown to lessen competition substantially in a properly defined relevant market.<\/p>\n
The term \u201crestraint of trade\u201d was developed at common law in England and refers to conspiracies in restraint of trade<\/em> and contracts in restraint of trade<\/em>, which are distinct categories of trade restraints.<\/p>\n A conspiracy in restraint of trade refers to competing sellers (or competing buyers) who collude with one another to allocate sales or fix prices rather than compete for the business of customers (or suppliers).<\/p>\n A contract in restraint of trade typically refers to restrictive covenants set forth in a contract that protect the covenantee from the future competition of the covenantor. Under classical antitrust law, these contracts were illegal restraints of trade when the restriction of future competition was not narrowly tailored to promote the success of a legitimate transaction or collaboration memorialized by the contract: the restriction must have been truly ancillary and subordinate to a legitimate purpose (e.g., the sale of a business, a partner\u2019s departure from a business, an employee\u2019s departure from a business, etc.). It must also have been narrowly tailored to facilitate the success of the legitimate purpose, or else it was unlawful per se in violation of Section 1.<\/p>\n Under modern standards, a contract in restraint of trade can be deemed a violation of Section 1 only if the restraint is wholly unrelated to the underlying transaction or contract or when it is accompanied by a showing of \u201charm to competition\u201d under the consumer-welfare standard.<\/p>\n We have litigated and advised clients about many different kinds of trade restraints during the past thirty-five years. Our particular focus has been contracts in restraint of trade, including the following categories of contractual restraints:<\/p>\n \u2022 Platform restraints \u2013 i.e., restrictive conditions imposed by platform operators on those who use their platforms.<\/p>\n \u2022 Non-compete restraints, which include non-compete covenants, non-solicitation covenants that operate as de facto non-compete covenants, and no-poaching restraints (agreements between rival employers not to compete for employees).<\/p>\n \u2022 Tying arrangements.<\/p>\n \u2022 Exclusive-dealing provisions, including provisions that establish de facto exclusive dealing.<\/p>\n \u2022 Product-bundling provisions and loyalty discounts.<\/p>\n \u2022 MRP and MAP provisions \u2014 i.e., contracts that oblige resellers to charge minimum prices.<\/p>\n We also have substantial experience litigating and advising clients about the following kinds of conspiracies in restraint of trade:<\/p>\n \u2022 Group boycotts.<\/p>\n \u2022 Horizontal price-fixing.<\/p>\n \u2022 Horizontal market-allocation.<\/p>\n \u2022 Bid-rigging.<\/p>\n \u2022 Misuse of standard-essential patents.<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" Unlawful Restraint of Trade under Federal LawSection 1 of the Sherman Act, which is codified at 15 U.S.C. \u00a7 1, forbids any restraint of trade imposed by contract, combination, or conspiracy. A few trade restraints are unlawful per se, but most trade restraints are condemned under Section 1 only if they are shown to lessen […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":26545,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":" Section 1 of the Sherman Act, which is codified at 15 U.S.C. \u00a7 1, forbids any restraint of trade imposed by contract, combination, or conspiracy. A few trade restraints are unlawful per se, but most trade restraints are condemned under Section 1 only if they are shown to lessen competition substantially in a properly defined relevant market.<\/p> The term \u201crestraint of trade\u201d was developed at common law in England and refers to conspiracies in restraint of trade<\/em> and contracts in restraint of trade<\/em>, which are distinct categories of trade restraints.<\/p> A conspiracy in restraint of trade refers to competing sellers (or competing buyers) who collude with one another to allocate sales or fix prices rather than compete for the business of customers (or suppliers).<\/p> A contract in restraint of trade typically refers to restrictive covenants set forth in a contract that protect the covenantee from the future competition of the covenantor. Under classical antitrust law, these contracts were illegal restraints of trade when the restriction of future competition was not narrowly tailored to promote the success of a legitimate transaction or collaboration memorialized by the contract: the restriction must have been truly ancillary and subordinate to a legitimate purpose (e.g., the sale of a business, a partner\u2019s departure from a business, an employee\u2019s departure from a business, etc.). It must also have been narrowly tailored to facilitate the success of the legitimate purpose, or else it was unlawful per se in violation of Section 1.<\/p> Under modern standards, a contract in restraint of trade can be deemed a violation of Section 1 only if the restraint is wholly unrelated to the underlying transaction or contract or when it is accompanied by a showing of \u201charm to competition\u201d under the consumer-welfare standard.<\/p> We have litigated and advised clients about many different kinds of trade restraints during the past thirty-five years. Our particular focus has been contracts in restraint of trade, including the following categories of contractual restraints:<\/p> \u2022 Platform restraints \u2013 i.e., restrictive conditions imposed by platform operators on those who use their platforms.<\/p> \u2022 Non-compete restraints, which include non-compete covenants, non-solicitation covenants that operate as de facto non-compete covenants, and no-poaching restraints (agreements between rival employers not to compete for employees).<\/p> \u2022 Tying arrangements.<\/p> \u2022 Exclusive-dealing provisions, including provisions that establish de facto exclusive dealing.<\/p> \u2022 Product-bundling provisions and loyalty discounts.<\/p> \u2022 MRP and MAP provisions \u2014 i.e., contracts that oblige resellers to charge minimum prices.<\/p> We also have substantial experience litigating and advising clients about the following kinds of conspiracies in restraint of trade:<\/p> \u2022 Group boycotts.<\/p> \u2022 Horizontal price-fixing.<\/p> \u2022 Horizontal market-allocation.<\/p> \u2022 Bid-rigging.<\/p> \u2022 Misuse of standard-essential patents.<\/p>","_et_gb_content_width":"","footnotes":""},"class_list":["post-32542","page","type-page","status-publish","hentry"],"yoast_head":"\n