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November 2014

Dear NATS Member:

As you may know, the Federal Trade Commission conducted an investigation concerning the provision in NATS's Code of Ethics that stated:

Members will not, either by inducements, innuendoes, or other acts, proselytize students of other teachers.

The Federal Trade Commission alleges that this provision in the Code of Ethics violates the Federal Trade Commission Act because it unnecessarily restricts members of NATS from competing for students, thereby depriving students of the benefits of competition among teachers of singing.

To end the investigation expeditiously and to avoid disruption to its core functions, NATS voluntarily agreed, without admitting any violation of the law, to the entry of a Consent Agreement and a Decision and Order by the Federal Trade Commission. As a result, NATS is in the process of revising its Code of Ethics and will implement an antitrust compliance program.

In general, the Federal Trade Commission has prohibited NATS from maintaining bylaws, code of ethics, operational policies, or membership requirements that restrict members from soliciting students or other teaching work, including restricting members from offering services directly to students who may be receiving similar services from other teachers of singing.

Some chapters that are affiliated with NATS have codes of ethics or similar documents that contain provisions that restrict its members from: (a) soliciting students or other teaching work, (b) advertising prices or other terms of teaching services, or ( c) competing on price-related terms. The Federal Trade Commission has prohibited NATS from accepting or maintaining as a chapterany association that has such a code of ethics or similar document that contains these prohibited restrictions.

In order to maintain its affiliation with NATS, each chapter must review its constitution and bylaws, code of ethics, operational policies, and membership requirements to determine if they contain any of these prohibited restrictions on members. Examples of these prohibited restrictions would include:

• Restricting a member from proselytizing pupils of another teacher by inducement, innuendo, insinuations, or other acts.
  
  
• Restricting a member from accepting as a student anyone who has not satisfied financial obligations to another member.
  
  
• Restricting a member from advertising or offering free scholarships or free tuition.

Chapters that are affiliated with NATS and that have any of these prohibited restrictions in their constitution and bylaws, codes of ethics, operational policies, membership requirements, or elsewhere will have the opportunity to remove them. If a chapter does not certify to NATS that it does not have such restrictions prior to the deadline set forth in the Decision and Order, NATS will have to remove it as a chapter until such time as the chapter complies with the Decision and Order.

The Decision and Order does not prohibit NATS or its affiliates from adopting and enforcing Codes of Ethics or similar documents that govern the conduct of members with respect to representations that NATS reasonably believes would be false or deceptive within the meaning of Section 5 of the Federal Trade Commission Act.

Click here to see a copy of the Decision and Order. It is also available on the Federal Trade Commission website at www.FTC.gov, and through the NATS web site.