Report regarding investigation directed to be made by the President in his Executive Order of November 27, 1933, approving the Code of Fair Competition for the motion picture industry (July 1934)

efits and advantages arising out of the contractual relationship, the code provides that no offers shall be made by a producer to or for such employees of another producer until 30 days before the expiration of the then existing contractual relationship. The code further provides that as and when a firm bona fide offer has been made by the then employing producer to the employee involved, that during the last 30 days of the strictly contractual relationship such then employing producer shall receive notice of offers from the competing producer, so that the bidding for services shall take place in the open and the then employing producer shall have an opportunity to meet any offers made by a competing producer, and thereby, but only upon the free choice of the employee, be able possibly to continue in his own employment such employee. The employee's choice as between such offers made is entirely preserved. Such is the procedure provided for by the code up to the expiration of the contractual relationship. (Part 5.) "Before continuing with the further provisions of the code upon this subject, it is pertinent to point out that the further provisions relate primarily to a theory of prior repute, that is, the theory of producers that those employees receiving very substantial compensation have been enabled to a large degree to secure for themselves such large compensation by reason of the efforts and facilities of their producer employers, and that by reason of such fact the producer employers have an ethical and moral right to be made acquainted for a stipulated period of time after the expiration of the contractual period of employment with offers made for the services of such former employees by competing producers, in order that the last employing producer may be able to meet such offers or at least negotiate with such former employee for a continuance of the employment with the last employing producer; and if such negotiations are successful, thereby preserving to the last employing producer an asset of undoubtedly great value. "These further provisions, relating to a time after the contractual relationship has ended, are presently opposed by organizations of the employees affected, upon the ground that such provisions will tend to decrease bidding for services and thereby directly tend to limit the compensation which such employees might expect to receive, if such provisions for open bidding were not embraced within this code. Your Deputy offers no opinion with respect to this theory of prior repute, advanced by producers, nor with respect to the arguments adduced by employees opposing such provisions, except to say that the provisions in the code relating to such subject matter are not, in his opinion, such as to work a hardship on either producers or such employees, and that the treatment of such proposals is entirely from the standpoint of fair practice on the part of producers, with entire freedom of/ choice left to the employees with respect to their acceptance or rejection of offers. "Briefly, the proposals immediately above referred to are that when the last employing producer has made a bona fide firm offer for the services of such employee who has received compensation of from $500 per week to $1,000 per week, or of from $5,000 per picture to $10,000 per picture, the last employing producer shall have notice of offers made by competing producers for a period of three months following the expiration of the employment ; and in cases where the compensation of such employees was more than $1,000 per week or more than $10,000 per picture, the period during which such last employing producer shall be entitled to receive notice shall be six months following the expiration date of the contractual relationship previously existing. (Part 5, section 4.) "Provision is made with respect to the determination of the good faith of offers made so as to entitle producers to notice of subsequent offers, and procedure is also devised whereby after notice has been given to the last employing producer he shall have the very shortest reasonable time within which to negotiate to meet an offer made by a competing producer, together with adequate safeguards for the exercise by the former employee of his free choice in acceptance or rejection of Offers. (Part 5, section 6.) "One further provision with respect to the contractual relationship existing between producers and such above described employees is deserving of special comment. Such provision declares that if the Code Authority, or any committee appointed by it for that purpose, after notice and hearing, shall find that any employee of any producer has refused without just cause to render services under any contract of employment, the Code Authority shall have full power, with the approval of the Administrator, to order all producers to refrain from employing any such person for such period of time as may be designated by the Code Authority, and making it an unfair trade practice for any producer to employ such person in violation of such order, or for any distributor or exhibitor, respectively, to distribute or exhibit any picture produced during the period prescribed by the Code Authority by or with the aid of such person. The interests of all parties concerned have been safeguarded with respect to the application of such provision of the code. (Part 5, section 7.) "The foregoing provision is especially designed to meet instances where, without just cause, an employee under contract has declined to render his services, thereby in effect wasting the assets of the employing producer and otherwise jeopardizing or impairing his business, with resultant loss not only to the employing producer but also to his other employees and to all those interested in his business. The provision, while drastic, is supportable upon the theory that if an in