Ben Gold - Antitrust Prosecution

Antitrust Prosecution

On November 6, 1933, Gold and about 80 other individuals were indicted for violations of federal antitrust law. Former IFWU presidents Morris Kaufman and Pietro Lucchi, the IFWU itself, several of IFWU locals and local leaders, as well as 68 employers and several organized crime figures were also included in the indictment. The indictment alleged that Louis "Lepke" Buchalter and Jacob "Gurrah" Shapiro—co-founders of the infamous Murder, Inc. murder-for-hire organization—formed a group of employers known as the "Fur Dressers Factor Corporation" to fix prices and eliminate competition. The employers allegedly paid higher wages to unions which agreed to participate in the scheme by striking uncooperative businesses, and Buchalter and Shapiro provided the muscle to force other furriers out of the business (which included bombings, acid throwing, kidnapping, arson and more).

After several defendants were granted their own separate trials and charges against others dropped, the court reached its verdict on December 16, 1937. Gold was convicted of violating the Sherman Antitrust Act and sentenced to one year in prison. It was the first conviction of a labor union official or labor union under the Sherman Act. After the convictions, the government undertook additional investigations against the IFWU and now-defunct NTWIU for violations of the Sherman Act.

But Gold and his union co-defendants appealed their convictions, and on December 19, 1938, the Court of Appeals for the Second Circuit overturned the convictions of all but three union officials. Gold's conviction was among those voided.

The government then reinstated charges in February 1940 against Gold, the NTWIU and 28 other labor leaders based on allegations not pursued in 1933. Charges against six labor leaders were dropped on March 20, 1940, and four others but Gold and 17 others were tried. Despite one witness recanting most of his accusatory testimony on the witness stand, Gold and IFWU Vice President Irving Potash were convicted of these additional antitrust charges. As the union raised a $100,000 defense fund for Gold and Potash, the government brought a fresh set of charges against Gold on May 17, 1940, accusing him of jury tampering during his first trial. As the jury deliberated Gold's fate, a group of employers sued Gold and the NTWIU for $3 million in damages under the Clayton Antitrust Act, and accusations of witness tampering were levied against Gold.

A mistrial occurred in the Gold jury tampering case on June 28, 1940, after the jury was unable to reach a verdict.

Gold's second jury tampering trial (which now included the witness tampering charge) began on July 1, 1940. Gold and his three co-defendants were acquitted on July 11, 1940.

Meanwhile, Gold's appeal on the second set of Sherman Antitrust Act violations was winding its way through the courts. On May 27, 1940, the Supreme Court of the United States issued its ruling in Apex Hosiery Co. v. Leader 310 U.S. 469 (1940). In that case, a union had engaged in a sit-down strike which shuttered a hosiery company's operations and prevented it from fulfilling its interstate contracts. The union was indicted and convicted for violating the Sherman Antitrust Act. But the Supreme Court disagreed:

The mere fact that strikes or agreements not to work, entered into by laborers to compel employers to yield to their demands, may restrict the power of such employers to compete in the market with those not subject to such demands does not bring the agreement within the condemnation of the Sherman Act.

Following the reasoning laid down by the Supreme Court in Apex Hosiery, the Court of Appeals for the Second Circuit once more voided the antitrust convictions imposed on Gold and the others in the case. The government declined to prosecute Gold further.