Falciglia v. Gallagher, 164 Misc. 838, 299 N. Y. S. 890 (1937). It applies only to bona fide employee groups, not to employer groups masquerading as employees. People v. Distributor's Division, S. F. W. U., 169 Misc. 255, 7 N. Y. S. (2d) 185 (1938). It has been stated that a strike for purposes other than to maintain or better wages is not within the exemption of Penal Code, section 582. Grassi Contracting Co. v. Bennett, 174 App. Div. 244, 160 N. Y. S. 279 (1916). However, an agreement between a union of jobbers and the manufacturers of ladies coats, limiting amount of work in outside shops and fixing wages and working conditions does not violate General Business Law, section 340, nor Penal Law, sections 580 and 582, from which labor unions are specifically exempted. Maisel v. Sigman, 123 Misc. 714, 205 N. Y. S. 807 (1924). See also American Cloak & Suit Mfrs'. Assn. v. Brooklyn Ladies' Garment Mfrs'. Assn., 143 Misc. 319, 255 N. Y. S. 614 (1931); Farulla v. Ralph A. Freundlich, Inc., 152 Misc. 761, 274 N. Y. S. 70 (1934). An agreement by a union controlling 98 percent of the fur workers in New York City to furnish labor only to members of a manufacturers' trade association is exempt from General Business Law, section 340. American Fur Mfrs'. Assn. v. Associated Fur C. & T. Mfrs., 161 Misc. 246, 291 N. Y. S. 610 (1936), aff'd mem. op. 251 App. Div. 708, 296 N. Y. S. 1,000 (1937). See also People v. Herson, 255 App. Div. 645, 8 N. Y. S. (2d) 887 (1939). The burden of proving that portions of a collective bargaining agreement were not a bona fide labor contract but a subterfuge to evade the provisions of General Business Law, section 340, is upon the plaintiff. Sainer v. Affiliated Dress Manufacturers, 168 Misc. 319, 5 N. Y. S. (2d) 855 (1938). C. SPECIAL ANTITRUST LAWS 1. Special Industry Antitrust Acts General Business Law (McKinney) Sections 350 and 351 provide that any foreign corporation or any partnership, association, or person whatsoever, engaged in the transportation business in this state shall be guilty of a misdemeanor if it creates, enters into or becomes a member of, or a party to any pool, trust, agreement, combination, or understanding with any other corporation, partnership, or person, to control the volume of transportation between this country and Europe, or to control, limit, regu 210235°-40-vol. 1-38 late, or fix the rates thereof, or who shall refuse to sell to any person, on demand transportation between the United States and Europe, either eastbound or westbound. Any contract in violation hereof shall be void. Any foreign corporation violating any of these provisions shall forfeit its right to do business in the state. Agriculture and Markets Law (McKinney): Milk Sections 252 to 258j, as amended Supp. 1939, providing for the licensing of milk dealers, give the Commissioner of Agriculture the power to refuse to grant or renew, or revoke or suspend, the license of any milk dealer who has been a party to a combination to fix prices. Sections 258k to 258n, as amended Supp. 1939, authorize the organization of milk producers' bargaining agencies and milk distributors' bargaining agencies, and the making of marketing agreements concerning the amount of milk which may be handled and the prices to be paid by the distributors to the producers. Section 258m expressly provides that if the Commissioner of Agriculture has reason to believe that any such marketing agreement results in a monopoly or restraint of trade to such an extent that the price of milk is unduly enhanced thereby, he shall serve a complaint upon the parties to such an agreement, grant a hearing, and if he finds that the agreement has such results, shall issue a cease-and-desist order. If such order is not obeyed, the commissioner shall file the order and proceedings with the attorney general who may apply to the supreme court for action. However, the law also provides that the activities of such agencies, and the agreements and arrangements made by them as authorized hereby, shall not be deemed conspiracies, combinations, contracts, or agreements in restraint of trade or commerce or an illegal monopoly. See Exceptions to General Antitrust Laws, supra. See also Vol. State Price Control Legislation: Administrative Price Control. Alcoholic Beverages Control Law (McKinney Supp. 1939) Section 101 provides that it shall be unlawful for a manufacturer or wholesaler (a) to be interested directly or indirectly in any prem ises where any alcholic beverage is sold at retail; or in any business devoted wholly or partially to such sale at retail by stock ownership, interlocking directors, mortgage or lien on any personal or real property, or by any other means; or (b) to make, or cause to be made any loan to any person engaged in the manufacture or sale of any alcholic. beverage at wholesale or retail. Any lien, mortgage, or other interest or estate, now held by a manufacturer or wholesaler on the real property of any licensee, acquired on or before December 31, 1932, shall not be included within the provisions of this section. Section 105 (16) provides that no retail licensee for off-premises consumption shall be interested, directly or indirectly, in any premises, other than those for which he is licensed, where liquors, wines, or beer are manufactured or sold at wholesale or retail, or in any business devoted wholly or partially to the sale of such beverages at wholesale or retail, by stock ownership, interlocking directors, mortgage or lien on any personal or real property or by any other means. Any lien, mortgage, or other interest or estate now held by such retailer on or in the personal or real property of such premises, acquired on or before December 31, 1932, shall not be included within the provisions of this subdivision. Section 106 (13) makes similar provisions concerning retail licensees for on-premises consumption. Section 105 (17) provides that no retail licensee for off-premises consumption shall make or cause to be made any loan to any person engaged in the manufacture or sale of liquors, wines, or beer at wholesale or retail. Section 106 (14) makes similar provisions concerning retail licensees for on-premises consumption. Section 118, as amended by L. 1938, c. 329, provides that any license or permit issued pursuant to this chapter may be revoked, cancelled, or suspended for cause, and must be revoked if, within a period of 2 years, there shall have been two convictions for any violation of this chapter by a licensee or permittee or any of their clerks, agents, employees, or servants on such licensed premises. Violation of the provisions of section 101 of this chapter shall cause a forfeiture of the license or permit of all parties participating or concerned in the violation. Section 130 (3) provides that any violation by any person of any provision of this chapter for which no punishment or penalty is otherwise provided shall be a misdemeanor. See Tying Contracts and Exclusive Dealing Arrangements, infra. 2. Public Contract Provisions Highway Law (McKinney) Section 39 provides that no patented article or material or any other material or article shall be specified, contracted for, or purchased in the construction of state highways, except under circumstances that there can be fair and reasonable opportunity for competition, the conditions to secure which shall be prescribed by the superintendent of public works. See projected Vol. Governmental Purchasing. No provisions. 3. Anticoercive Financing Statutes Judicial Decisions Public Contract Provisions. An arrangement whereby one bidder on a public contract pays another a consideration in exchange for the latter withdrawing or altering his bid is illegal. The State may recover the damages sustained thereby, and no recovery will be permitted between the parties to such an unlawful contract. Sharp v. Wright & McDonald, 35 Barb. 236 (1862); People v. Lord & Leahey, 6 Hun. 390 (1876), affd. 71 N. Y. 527 (1878); Baird v. Sheehan, 38 App. Div. 7, 56 N. Y. S. 228 (1899). affd. per cur. 166 N. Y. 631, 60 N. E. 1107 (1901); Woodworth v. Bennett, 43 N. Y. 273 (1870); People v. Connolly, 253 N. Y. 330, 171 N. E. 393 (1930). Agreements between two or more bidders to share profits or work is illegal, if made for the purpose of preventing competition and affecting the price by removing bidders. Atcheson v. Mallon, 43 N. Y. 147 (1870); Kelly v. Devlin, 58 How. Pr. 487 (1879), aff'd. 15 Jones & S. 555 (1881). However, agreements to share work, profits, or losses are valid where they do not unreasonably infringe the competition for the award involved. Briggs v. Tillotson, 8 Johns 304 (1811); Dutch v. Harrison, 5 Jones & S. 306 (1874) (where one bidder subcontracted before entering bid); Kohart v. Skou, 163 App. Div. 899, 147 N. Y. S. 509 (1914). In Marsh v. Russell, 66 N. Y. 288 (1876) an agreement by four persons to share the profits and losses of contracts with municipalities to furnish recruits for the civil war, each agreeing to make no contract for less than $500 per man, was held valid and enforceable. A lawful business can be carried on by a firm as well as by individuals, and members of a firm can regulate the price at which they will deal. The real question is whether such agreement is made for the purpose of preventing fair competition and affecting the price by removing bidders. A contract by an asphalt company to sell exclusively to one person in New York City for the purpose of paving streets is valid in the absence of a combination to stifle bids. Stemmerman v. Kelly, 150 App. Div. 753, 135 N. Y. S. 827 (1912). Where the specifications for asphalt for a public highway contract are so framed that only one company can qualify therefor, the manufacturer of asphalt of equal quality may enjoin the letting of the contract on the ground that it cannot be let under competition as required by Laws 1913, chapter 80, sections 14 and 25. Warner-Quinlan Asphalt Co. v. Carlisle, 158 App. Div. 638, 144 N. Y. S. 70 (1913). The choice of a patented street pavement was not unlawful when authorized by the city charter, where patentees offered to sell at a stipulated price to the successful bidder, although patentees were unsuccessful in bidding on the same contract. Adams v. Van Zandt, 199 N. Y. S. 225 (1923). II. CONTRACTS NOT TO COMPETE No statutory provisions. Judicial Decisions Restrictive Covenants Ancillary to the Sale of a Business. Contracts not to compete ancillary to the transfer of an interest in a business are valid when reasonable in reference to the interest protected. The reasonableness of the time and space limits of such contracts vary with the circumstances. The test has been said to be whether the restraint is such only as to afford a fair protection to the interests of the party in favor of which it is given, and not so large as to interfere with the interests of the public. Covenants held to be valid and enforceable: Nobles v. Bates, 7 Cowan 307 (1827) (partner selling his interest in harness business agreed not to compete within 20 miles); Chappel v. Brockway, 21 Wend. 157 (1839) (covenant not to engage in packet business at any time thereafter between Rochester and Buffalo); Noah v. Webb, 1 Edw. Ch. 604 (1833) (not to engage in the newspaper business for S years in certain cities); Jarvis & Lobdell v. Peck, 1 Huff. Ch. 479 (1840), aff'd 10 Paige 118 (1843) (in dissolution of partnership, agreement by one partner not to disclose trade secrets); Dunlop v. Gregory, 10 N. Y. 241 (1851) (covenant not to run a steamboat above a point on the Hudson); Alcock v. Giberton & Binsse, 12 N. Y. Sup. Ct. (5 Duer) 76 (1855) (not to use secret mode of conducting business, nor to teach secret process to others, nor to manufacture certain porcelain teeth); Shearman v. Hart, 14 Abb. Pr. 358 (1862) (partners agreed that in the event of dissolution neither should continue lithographic business in the building used by firm, or at any place within one block, for 6 months, without the consent of the other); Muller v. Vettel, 25 How. Pr. 350 (1862) (oral agreement not to engage in butcher business for 10 years within six blocks of business sold); Ewing v. Johnson, 34 How. Pr. 202 (1864) (not to "interfere, hinder, or obstruct" tobacco business and trade routes in two cities. and several villages wherein business sold was carried on); Hard v. Seeley, 47 Barb. 428 (1865) (not to engage in vending or manufac |