Distributors cannot conspire with their common supplier to block the supplier from selling to a competing new market entrant.

If the supplier-distributor relationship is in jeopardy, each party should assess its rights and obligations. If termination is inevitable, an agreed-to separation is the preferred alternative to protracted, expensive and disruptive litigation.

Absent an enforceable post-employment contractual restriction, a company is generally free to recruit an employee away from a competitor. This right is not absolute, where the disclosure of trade secrets may be involved or where recruiting multiple employees away from the competitor constitutes unfair competition.

A mere discussion about pricing with a competitor may violate the Federal Trade Commission Act’s prohibition against “unfair methods of competition,” even if the exchange does not result in price fixing or cause any actual harm to competitor. (Federal Trade Commission v. Bosley, No. 121-0184).

The FTC has prohibited major recording companies from enforcing similar policies which conditioned coop advertising funds on the customer's promise to observe the recording company's minimum resale prices in all media advertising, even advertising funded by the retailer.

A trade association faces potential liability for its negligence when publishing or updating its safety standards.

Most manufacturers would be surprised to learn that a typical independent distributor, who buys and resells the manufacturer's products, may be protected from termination under state law as a franchisee. Over 20 states have some sort of franchise law on the books, the terms of which do vary considerably. Recently an Illinois forklift dealer recovered $1.5 million when an exclusive manufacturer terminated the distributorship without good cause. The jury ruled the dealer was a franchisee protected under state law.

A Connecticut-based electrical distributor was protected under the state franchise law from a crucial supplier's termination without good cause.

Product recalls ordered by the Consumer Product Safety Commission can be a substantial financial liability. Recalls can affect any sellers of the product, not just its manufacturer.

Distributorship agreements where the distributor agrees to deal exclusively with a particular supplier are generally viewed as lawful under the antitrust laws. There are some exceptions.

To survive and be successful, a company must not only sell its goods, it must also receive timely payment from its customers. There are a variety of legal tools available to the unsecured seller which facilitate payment on open account sales. So its caveat venditor – or let the seller beware.

State laws vary considerably when it comes to judging the validity of post-employment non-compete agreements. There are several key factors that courts evaluate when determining a restriction's reasonableness and thus its enforceability.

Provides a general overview of the four basic federal antitrust laws, enforcement actions and sanctions. When interacting with competitors, caution is advised on topics such as pricing, terms of sale, future price movements, relations with a supplier or customer, production plans and bidding practices. When dealing with customers, sensitive topics include resale price arrangements, non-price resale restrictions, price discrimination, termination and other arrangements. General antitrust guidelines in each area are offered.
— Booklet content (61 KB PDF file)