The hospitality industry in Portland, Oregon, instituted an organization that was designed to bring convention business to the city. Association members made fixed contributions to the organization and companies in the supply business were expected to donate funds based on a percentage of their sales. Supply companies that did not contribute were boycotted by the membership. This boycott was a clear violation of the federal Sherman Antitrust Act.
Both the president of Hilton Hotels Corporation and the manager of the Portland Hilton ordered the purchasing agent of the Portland Hotel to ignore the boycott entirely and to make purchases based only on the quality of the products and service from suppliers.
The purchasing agent for the Portland Hilton, however, out of personal resentment toward the sales rep of a particular supplier, enforced the boycott. After being found guilty of violating federal law, Hilton appealed, arguing that the trial court misinterpreted the law because the corporation could only be held liable if the purchasing agent committed a crime within the scope of employment with the intention that the corporation gain some benefit from that crime.
In this case, it was clear that the agent had committed a crime but the acts were not within the scope of employment because he had been expressly forbidden to continue the boycott. What was the result on appeal? Explain.
United States v. Hilton Hotels Corporation, 467 F. 2d 1000 (9 th Circuit)