In 1969, Tom Di Noto founded Tuesday Productions Inc., a San Diego, Calif., company that creates musical jingles for television and radio commercials. At first he worked for small local retailers. Neither they nor he could afford union scale, so he hired nonunion musicians.
As his reputation grew, he produced and arranged jingles for Anheuser-Busch (including "This Bud's for You"), AT&T, and Honeywell, among others. This year his billings will reach about $2 million. As a "jingle house," -- the advertising term for this type of firm -- Tuesday Productions now works mainly as a subcontractor to other ad agencies.
But Tom Di Noto's success has created a conflict. Most large advertisers and agencies have signed an agreement with the American Federation of Television and Radio Artists (AFTRA) requiring them to deal only with other signers and to pay AFTRA union wages.
If Di Noto had signed, he would have had to give up his local clients who had not signed the AFTRA agreement -- the very people who helped him get started and who still are an important part of his business. He would also have had to force his own employees to join AFTRA so they could perform on union contracts. Rather than do that, he figured he could resolve the conflict simply by paying union scale when working for large clients that were signatories of the agreement.
But Di Noto began to find it tough to recruit more national clients. He charged that the union was blacklisting him -- threatening to withhold business from ad agencies and musicians that worked with him. So in 1978, Tuesday Productions filed a labor suit against AFTRA in federal court in San Diego, and in 1979, the suit was amended to accuse the union of violating the Sherman Antitrust Act, which prohibits secondary boycotts. "It was a matter of survival," Di Noto says.
Unions traditionally have been immune to antitrust prosecution. But earlier this year, the judge ruled that various provisions of the AFTRA contract telling signatory parties not to deal with nonsigners are illegal. A jury found the union in violation of the Sherman Act and Tuesday Productions was awarded $3.1 million in compensatory damages -- which, according to antitrust law, were trebled. AFTRA also was ordered to pay Tuesday's attorneys' fees and court costs of approximately $1.2 million.
If uphcld on appeal, the decision is expected to have wide repercussions for labor relations in the entertainment and advertising industries, and perhaps other industries as well. AFTRA attorney Ken Poovey said after the verdict that it "strikes at the collective bargaining process." Tuesday's attorney, John Collins, noted: "If the parties can't agree to a settlement, then it's likely that the Supreme Court would ultimately take this case because of the precedent it would set."
The ruling brings Di Noto immediate relief. "The appeal procedure may take five or six years, and there's no guarantee that $9 million will be the final amount awarded," he says. But "we can go about our business without. . . misinformation being fed to advertising agencies who are our main source of business."