[Federal Register Volume 60, Number 127 (Monday, July 3, 1995)]
[Notices]
[Pages 34537-34540]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16254]



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FEDERAL TRADE COMMISSION
[File No. 941-0007]


Council of Fashion Designers of America et al.; Proposed Consent 
Agreement With Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
prohibit, among other things, two New York based corporations or their 
members from attempting to fix or reduce modeling fees, and would 
require them to take steps to educate fashion designers that price-
fixing is illegal.

DATES: Comments must be received on or before September 1, 1995.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:
Michael Antalics or Karen Mills, FTC/S-2627, Washington, DC 20580. 
(202) 326-2821 or (202) 326-2052.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the 
Commission's rules of practice (16 CFR 2.34), notice is hereby given 
that the following consent agreement containing a consent order to 
cease and desist, having been filed with and accepted, subject to final 
approval, by the Commission, has been placed on the public record for a 
period of sixty (60) days. Public comment is invited. Such comments or 
views will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
Sec. 4.9(b)(6)(ii) of the Commission's rules of practice (16 CFR 
4.9(b)(6)(ii)).

Agreement Containing Consent Order To Cease and Desist

    In the Matter of: The Council of Fashion Designers of America, a 
corporation; and 7th on Sixth, Inc., a corporation. File No. 941-
0007.

    The Federal Trade Commission (``Commission''), having initiated an 
investigation of certain acts and 

[[Page 34538]]
practices of the Council of Fashion Designers of America and 7th on 
Sixth, Inc., hereinafter sometimes referred to collectively as 
``proposed respondents,'' and it now appearing that the proposed 
respondents are willing to enter into an agreement containing an order 
to cease and desist from engaging in certain acts and practices being 
investigated,
    It is hereby agreed by and between proposed respondents, by their 
duly authorized officers and attorneys, and counsel for the Commission 
that:
    1. Proposed respondent Council of Fashion Designers of America 
(hereinafter ``CFDA'') is a not-for-profit corporation organized, 
existing, and doing business under and by virtue of the laws of the 
State of New York, with its office and principal place of business 
located at 1412 Broadway, New York, New York 10018.
    2. Proposed respondent 7th on Sixth, Inc. (hereinafter ``7th on 
Sixth'') is a not-for-profit corporation organized, existing, and doing 
business under and by virtue of the laws of the State of New York, with 
its office and principal place of business located at 1412 Broadway, 
New York, New York 10018.
    3. Proposed respondents admit all the jurisdictional facts set 
forth in the draft of complaint.
    4. Proposed respondents waive:
    (a) Any further procedural steps;
    (b) The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law;
    (c) All rights to seek judicial review or otherwise to challenge or 
contest the validity of the order entered pursuant to this agreement; 
and
    (d) Any claim under the Equal Access to Justice Act.
    5. This agreement is for settlement purposes only and does not 
constitute an admission by proposed respondents that the law has been 
violated as alleged in the draft of complaint or that the facts as 
alleged in the draft complaint, other than jurisdictional facts, are 
true.
    6. This agreement shall not become part of the public record of the 
proceeding unless and until it is accepted by the Commission. If this 
agreement is accepted by the Commission it, together with the draft of 
complaint contemplated thereby, will be placed on the public record for 
a period of sixty (60) days and information with respect thereto will 
be publicly released. The Commission thereafter may either withdraw its 
acceptance of this agreement and so notify the proposed respondents, in 
which event it will take such action as it may consider appropriate, or 
issue and serve its complaint (in such form as the circumstances may 
require) and decision, in disposition of the proceeding.
    7. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Sec. 2.34 of the Commission's 
rules, the Commission may, without further notice to the proposed 
respondents, (1) issue its complaint corresponding in form and 
substance with the draft of complaint and its decision containing the 
following order to cease and desist in disposition of the proceeding 
and (2) make information public with respect thereto. When so entered, 
the order to cease and desist shall have the same force and effect and 
may be altered, modified, or set aside in the same manner and within 
the same time provided by statute for other orders. The order shall 
become final upon service. Delivery by the U.S. Postal Service of the 
complaint and decision containing the agreed-to order to proposed 
respondents' addresses as stated in this agreement shall constitute 
service. Proposed respondents waive any right to any other manner of 
service. The complaint may be used in construing the terms of the 
order, and no agreement, understanding, representation, or 
interpretation not contained in the order or the agreement may be used 
to vary or contradict the terms of the order.
    8. Proposed respondents have read the proposed complaint and order 
contemplated hereby. They understand that once the order has been 
issued, they will be required to file one or more compliance reports 
showing that they have fully complied with the order. Proposed 
respondents further understand that they may be liable for civil 
penalties in the amount provided by law for each violation of the order 
after the order becomes final.
Order

I

    It is ordered that, as used in this order, the following 
definitions shall apply:
    A. ``Respondents'' means the Council of Fashion Designers of 
America and 7th on Sixth, Inc.;
    B. ``Person'' means any individual, partnership, association, 
company, or corporation;
    C. ``CFDA'' means the Council of Fashion Designers of America, its 
directors, trustees, officers, members, representatives, committees, 
subcommittees, boards, divisions, agents, employees, successors and 
assigns;
    D. ``7th on Sixth'' means 7th on Sixth, Inc., its directors, 
trustees, officers, members, representatives, committees, 
subcommittees, boards, divisions, agents, employees, successors and 
assigns.

II

    It is further ordered that respondents CFDA and 7th on the Sixth, 
directly or indirectly, or through any corporate or other device, in or 
affecting commerce, as ``commerce'' is defined in section 4 of the 
Federal Trade Commission Act, 15 U.S.C. 44, forthwith cease and desist 
from entering into, attempting to enter into, organizing or attempting 
to organize, implementing or attempting to implement, or continuing or 
attempting to continue, any combination, agreement, or understanding, 
express or implied, for the purpose or with the effect of:
    A. Raising, lowering, fixing, maintaining or stabilizing the price, 
terms or other forms or conditions of compensation paid for modeling or 
modeling agency services; or
    B. Encouraging, advising, pressuring, assisting, inducing, or 
attempting to induce any person to engage in any action prohibited by 
this order.
    Provided, however, that it shall not be deemed a violation of this 
order for more than one member of CFDA and/or 7th on Sixth to employ or 
use the services of the same person where such employment or use is not 
otherwise in furtherance of any action prohibited by this order.

III

    It is further ordered that Respondents CFDA and 7th on Sixth each 
shall:
    A. Within thirty (30) days after the date on which this order 
becomes final, distribute by certified U.S. first-class mail a copy of 
this order and the accompanying complaint, and the notice attached in 
Appendix A hereto, to:
    1. Each of its members, officers, directors, and employees, and 
each fashion designer who has shown in the fashion shows organized by 
7th on Sixth;
    2. Each person to whom it has, at any time prior to the effective 
date of this order, communicated the benefits of membership in 7th on 
Sixth, or whom it has invited to join 7th on Sixth, as identified in 
Appendix B hereto;
    3. The International Model Managers Association, c/o David 
Blasband, Esq., Deutsch, Klagsbrun & Blasband, 800 Third Avenue, New 
York 10022;

[[Page 34539]]

    4. Each of the modeling agencies listed in Appendix C attached 
hereto; and
    B. For a period of five (5) years from the date this order becomes 
final, cause to be made minutes of all business meetings of its 
membership, its board of directors, its committees and subcommittees. 
Such minutes shall (i) identify all persons attending such meeting, 
(ii) include a certification, signed by the presiding officer and 
secretary under penalty of perjury, that states whether prices, terms, 
or other forms or conditions of compensation paid for modeling or 
modeling agency services were discussed at the meeting, and (iii) 
summarize what was discussed at the meeting. If prices, terms, or other 
forms or conditions of compensation paid for modeling or modeling 
agency services were discussed at any business meeting subject to this 
order, then the minutes of such meeting shall identify the participants 
in the discussion and state in detail the substance of the 
discussion(s). Minutes and the required certifications shall be 
retained for a period of five (5) years from the date the minutes were 
created. Such minutes shall be provided to the Commission upon request.
    C. Within sixty (60) days after the date on which this order 
becomes final, and annually thereafter for five (5) years, on or before 
the anniversary date of this order,
    1. Communicate either orally or in writing to its officers, 
directors, employees and members concerning their obligations under 
this order;
    2. Obtain from each of its officers, directors, and employees an 
annual written certification, that he or she (a) has read, understands 
and agrees to abide by the terms of this order, (b) is not aware of any 
violation of this order, and (c) has been advised and understands that 
failure of CFDA or 7th on Sixth, as defined in the order, to comply 
with this order may subject either or both of the respondents to 
penalties for violation of the order; and
    3. Retain the certifications required by Section III.C.2. Such 
certifications shall be provided to the Commission upon request.

IV

    It is further ordered that each respondent shall:
    A. Notify the Commission at least thirty (30) days prior to any 
proposed change in the respondent such as a dissolution, assignment, or 
sale resulting in the emergence of a successor corporation, the 
creation or dissolution of subsidiaries, bankruptcy, or any other 
change in the respondent which may affect compliance obligations under 
this order; and
    B. File a written report with the Commission within sixty (60) days 
after the date the order becomes final, and annually thereafter for 
five (5) years on the anniversary of the date the order became final, 
and at such other times as the Commission may by written notice 
require, setting forth in detail the manner and form in which the 
respondent has complied and is complying with the order.

V

    It is further ordered that, for the purpose of determining or 
securing compliance with this order, each respondent shall permit any 
duly authorized representative of the Commission:
    A. Upon reasonable notice to respondent access, during office hours 
and in the presence of counsel, to inspect and copy all books, ledgers, 
accounts, correspondence, memoranda and other records and documents in 
the possession or under the control of each respondent relating to any 
matters contained in this order; and
    B. Upon five days' notice to respondent and without restraint or 
interference from it, to interview officers, directors, employees, or 
agents of respondent, who may have counsel present.

VI

    It is further ordered that this Order shall terminate twenty (20) 
years from the date this Order becomes final.
Appendix A

    Dear ____________________: [Respondent] has agreed, without 
admitting any violation of the law, to the entry of a Consent Order 
by the Federal Trade Commission prohibiting certain conduct. A copy 
of the Order is enclosed.
    The Order spells out [Respondent]'s obligations in greater 
detail, but we want you to know and understand the following:
    The Council of Fashion Designers of America and 7th on Sixth, 
Inc. may not negotiate on behalf of fashion designers collectively 
with models or modeling or modeling agency services, and may not 
enter into or continue any agreement or understanding, express or 
implied, for the purpose or with the effect of affecting the prices 
paid for modeling or modeling agency services.
    Non-compliance with this Order may subject [Respondent] to 
penalties for violation of the order, and may be reported to the 
Federal Trade Commission.

    Sincerely,

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[Respondent]

Enclosure
Appendix B

Mr. Victor Alfaro, 130 Barrow Street, Suite 105, New York, N.Y. 
10014
Mr. Robert Danes, 488 Seventh Avenue, New York, N.Y. 10018
Ms. Gemma Kahng, 550 Seventh Avenue, New York, N.Y. 10018
Ghost, c/o Showroom Seven, 498 Seventh Avenue, New York, N.Y. 10018
Mr. Mark Eisen, 214 West 39th Street, New York, N.Y. 10018
Mr. Byron Lars, 29 West 57 Street, New York, N.Y. 10019
Ms. Mary McFadden, 240 West 35th Street, New York, N.Y. 10001
Magaschioni, Inc., 499 Seventh Avenue, New York, N.Y. 10018
The Next Generation, 242 West 38th Street, New York, N.Y. 10018
Mr. Mark Badgley, Badgley Mischka, 525 Seventh Avenue, New York, 
N.Y. 10018
Mr. James Mischka, Badgley Mischka, 525 Seventh Avenue, New York, 
N.Y. 10018
Ms. Jennifer George, Jennifer George, Inc., 530 Seventh Avenue, New 
York, N.Y. 10018
Mr. Fernando Sanchez, Fernando Sanchez Ltd., 5 West 19th Street, New 
York, N.Y. 10011
Ms. Joan Vass, Joan Vass NY, 117 East 29th Street, New York, N.Y. 
10016
Ms. Adrienne Vittadini, 1441 Broadway, New York, N.Y. 10018
Mr. Byron Lars, 29 West 57th Street, New York, N.Y. 10019
Appendix C

Ms. Bethann Hardison, Bethann Management Co., 36 North Moore Street, 
New York, NY 10013
Boss Models, 317 West Thirteenth Street, New York, NY 10014
Ms. Frances Grill, President, Click Model Management, 881 7th Ave., 
Suite 1013, New York, NY 10019
Mr. Michael Flutie, President, Company Ltd., 270 Lafayette St., 
Suite 1400, New York, NY 10012
Ms. Monique Pillard, President, Elite Model Management, 111 East 2nd 
Street, New York, NY 10010
Ms. Ellen Harth, Elite Runway, 149 Madison Avenue, New York, NY 
10016
Joseph Hunter, President, Ford Models, Inc., 344 East 59th Street, 
New York, NY 10022
Mr. Charles Bennett, Senior Vice President, International Management 
Group, 170 Fifth Avenue, 10th Floor, New York, NY 10010
Ms. Irene Marie, President, I'M New York, 120 Wooster St., New York, 
NY 10012
Ms. Irene Marie, President, Irene Marie, Inc., 728 Ocean Drive, 
Miami Beach, FL 33139
Ms. Milie Pellet, President, Next Management, 23 Watts Street, 5th 
Floor, New York, NY 10013
Now Model Management, 568 Broadway, Suite 504-A, New York, NY 10012
Pauline Bernatchez, President, Pauline's, 379 West Broadway, 5th 
Floor, New York, NY 10012
Ms. Natasha Esch, President, Wilhelmina Models, Inc., 300 Park 
Avenue South, 2nd Floor, New York, NY 10010
Women Model Management, 107 Greene Street, New York, NY 10012
Ms. Barbara Lantz, President, Zoli Management, 3 West 18th Street, 
New York, NY 10011

[[Page 34540]]


Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted an agreement to a 
proposed consent order from The Council of Fashion Designers of 
America, Inc. (CFDA) and 7th on Sixth, Inc.
    The proposed consent order has been placed on the public record for 
sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.
    The complaint alleges that CFDA, a trade association of fashion 
designers, and 7th on Sixth, a not-for-profit corporation, and their 
members, have engaged in acts and practices that have unreasonably 
restrained competition among fashion designers. The complaint alleges 
that CFDA and 7th on Sixth fixed prices for the hiring of runway 
models. The complaint alleges that this price fixing agreement among 
purchasers of modeling and modeling agency services violates Section 5 
of the Federal Trade Commission Act.
    CFDA and 7th on Sixth have signed a proposed consent agreement that 
requires them to cease and desist from any agreement which has the 
purpose or effect of fixing prices paid or terms of employment for 
modeling or modeling agency services and from encouraging others to 
engage in such activities. The proposed consent order requires that 
CFDA and 7th on Sixth distribute a copy of the complaint and a letter 
notifying their members and employees, modeling agencies and other 
designated parties listed in the order that neither the CFDA nor 7th on 
Sixth may negotiate on behalf of fashion designers collectively with 
models or modeling agencies, and they may neither continue nor enter 
into any agreement for the purpose of affecting modeling prices.
    The proposed order includes a proviso which makes clear that 
fashion designers who choose to employ or use the services of the same 
model will not be deemed in violation of the order, where such 
employment or use is not otherwise in furtherance of any action 
prohibited by the order. The proviso will permit fashion designers to 
hire models independently without fear that the fact that they hire the 
same model itself will result in liability. The order also permits two 
or more designers to agree to hire and use models jointly without 
violating the order, so long as they do not agree to do so in 
furtherance of the kind of prohibited agreement to which CFDA and 7th 
on Sixth were party.
    In order to deter future law violations and facilitate FTC review 
of compliance with the order, the proposed order requires CFDA and 7th 
on Sixth to make and keep minutes of all meetings of their membership 
board, committees or subcommittees, for five years. These minutes must 
indicate if prices or terms of modeling services are discussed at any 
meeting. CFDA and 7th on Sixth must provide these minutes to the FTC 
upon request. The parties must also communicate to their members, 
officers, directors and employees their obligations under this order. 
Officers, directors and employees must in turn provide annual written 
certification that they have received such notice.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 95-16254 Filed 6-30-95; 8:45 am]
BILLING CODE 6750-01-M