Barak Richman on Rabbinic Cartels

Much to my delight, my colleague Barak Richman has been stirring up a whole heap of trouble lately.  I’m always happy to see someone using the tools of antitrust law to really get on the wrong side of a powerful interest group, and this one is particularly fitting: it was Barak who first piqued – and then supported – my interest in the application of the Sherman Act to the oocyte industry.

Also not content to limit himself to the usual antitrust targets, Richman has been doing battle with the three non-Orthodox rabbinical associations.  You think reproduction is a sacred cow?  Try the rabbis.  (Yes, probably the wrong metaphor, I realize, but I don’t know any better ones). 

In a paper recently posted to SSRN, Saving the First Amendment from Itself: Relief from the Sherman Act Against the Rabbinic Cartels, Barak takes on America’s rabbis, who he argues currently organize cartels that control their placement across the nation in a manner that flagrantly violates the Sherman Act, inflates rabbinic wages, and hinders Jewish communities from seeking their preferred spiritual leader.  Before I get to the details of the paper, let me give just a bit of background. 

The project began when Richman served as a member of his synagogue’s rabbi search committee, which I gather is governed by the rules imposed by the Rabbinical Assembly (RA), the Conservative movement’s governing rabbinical body.  The restrictive rabbinic search rules were troubling to the congregation, an eclectic community that finds appeal in different Jewish denominations, and who felt that the rules barred a broad search for the spiritual leader who would best suit the community.  Those restrictions include, in brief:

•            A congregation may search for a rabbi only through the offices of the Placement Commission.

•            A congregation served by the Commission shall not advertise in the media for a rabbi. If a congregation advertises, it will be removed from the Placement List.

•            If a congregation interviews a non-Rabbinical Assembly rabbi without the specific written approval of the Commission, the congregation will be removed from the Placement List.

•            If a congregation engages a non-Rabbinical Assembly rabbi without the specific written approval of the Commission, the congregation will lose placement privileges for at least a year the next time it seeks a rabbi. Other consequences may apply. Similar rules apply to rabbinic candidates as well

According to Richman, the RA filters candidates for individual placement according to a stated set of rules that give priority to seniority and other RA priorities. For example:

(a) Congregations with rabbis with the titles of “assistant rabbi” or “associate rabbi” are prohibited from promoting those rabbis to a senior position without permission from the Placement Commission;

(b) Congregations who have hired an “Interim Rabbi” to temporarily assume pulpit duties may not consider him/her for the permanent rabbinic position, even if both the congregation and the interim rabbi desire to continue the pulpit relationship;

(c) Rabbinic candidates need to have a minimum number of years of experience before being permitted to apply to mid-size and large congregations, and conversely, mid-size and large congregations are only permitted to interview candidates with a requisite number of years of experience; new members of the RA are considered to have no more than two years of seniority, regardless of their actual professional experience, thus limiting their application possibilities.

So, Richman’s congregation was troubled by these restrictions – presumably not the first congregation to feel this way.  But this congregation also happened to have an antitrust specialist on its search committee (Barak), who wrote an opinion piece in The Jewish Daily Forward, arguing that, after serving on the search committee, he “was fascinated to find an unexposed island of unequivocal antitrust violations.”  The piece prompted a response from the RA, which as Barak points out in his paper, raises a set of arguments well-known to anyone familiar with the professional association Sherman Act cases.  Of course, quality improvement is a procompetitive justification recognized by antitrust law, and a restraint might withstand antitrust scrutiny if its purported quality improvements outweigh any inefficiencies the restraint otherwise creates.  But in this case, argues Richman, they do not – instead the RA raises the same “tired argument on expertise and quality” common to unsuccessful professional association cases.

For example, the RA argues that a rabbi’s job, and therefore the rabbinic job placement process, involves unique and complex features that justify unusual control and intervention in the labor market.  Richman labels this a species of a market failure argument, in which a restraint is justified as achieving a superior market outcome, of the same type unsuccessfully invoked by physicians, engineers, and other professionals who have requested immunity from the Sherman Act.

The RA’s arguments also hint at the paternalism common in professional association defenses of restraints on trade.  For example, Richman notes that the RA presumably claims that the exceptionalism of rabbinic services requires the RA to restrain the hiring market, perhaps because congregations are incapable of taking “a long-term view to placement” or of handling the “exceptionally complex process” that involves hiring a rabbi. But professional associations commonly raise – and the Supreme Court repeatedly rejects – arguments that restraints on competition are justified because they protect consumers from a market’s complexity and exceptionalism.   

Lastly, the RA makes an additional type of quality argument, claiming that its restrictive placement system is necessary to “encourage[ ] talented individuals to enter and remain in the profession.”  But, says Richman,

this argument is akin to long-rejected “ruinous competition” arguments, which was most famously advanced in 1897 by an early railroad trust that claimed that forcing the cooperating railroads to compete would lead to the economic demise of several.  The Sherman Act requires that competitive forces, not monopolistic restraints, attract entry into a labor market.

A large chunk of the paper, as you would expect, deals with the First Amendment issues. Though the rabbinic organizations implementing the restrictive policies claim that the First Amendment immunizes them from Sherman Act scrutiny, Richman argues that there is much that is troubling about such a claim.  First, he contends that it fails to account for the decentralization that has sustained Jewish communities worldwide for nearly two millennia.  Second, it invokes the First Amendment to sanitize what Richman argues is little more than the suppression of religious expression.  Concludes Richman, “the First Amendment may not, and ought not, be used to subvert itself.”

Read the whole thing here!

Comments

[twitter.com/slycivilian]

It would be interesting to see if church where clergy are primarily placed, not chosen by congregations, has a similar salary pattern. But all the examples i know there is much greater organizational control by a central church...eg: methodist churches where pastors are placed by the bishops.

My understanding is that the UMC does have higher salaries...but the organization that makes the clergy selections has much more control over the local, vs a situation of competing and independent synagogues.

[DrGrishka]

Isn't this exactly the same thing that medical schools and residency programs do? Of course I argued that the National Residency Matching Program is anti-competitive and violative of Sherman Act (at least it did until Congress gave the NRMP blanket antitrust immunity).

[Kim Krawiec]

Hi Dr – I think my answer has to be that I don’t know enough about the medical residency matching program to really answer your question meaningfully. I have certainly always assumed that the residency matching program was not anticompetitive in either intent or effect – or, at least, that any anticompetitive effects are outweighed by the pro-competitive benefits associated with generating better matches. But it sounds as if you have reason to believe differently. Does the residency-matching program operate as a group boycott? Are there penalties against non-participants?

I can say that the paper does not at all suggest that all centralized placement or matching programs would – or should – run afoul of the Sherman Act. Merely that the particular restrictions (and means of enforcing them) adopted by the RA do not further the stated pro-competitive goals, and that some of the stated goals are, in any event, not ones supported by Sherman Act case law. The paper goes into more detail about the reasons for this than I can really do justice to in a blog post.

You raise a good question, slycivilian. The paper does mention some comparative salary statistics for other religious clergy. But it doesn’t go into any detail that I recall in terms of comparing the various placement methods.

[Eric Muller]

Up until now I've used the "murderer-of-parents-pleading-for-court's-mercy-because-he's-an-orphan" definition of "chutzpah," but Barak's taking on The Rabbinate might just displace it! :-)

[Joe]

Good one, Muller! But Richman is dealing with a religious organization here. I'm not surprised at all that the RA wants to have it's religion and its churches run a certain way and to have a certain feel.