What is the test of the rule of reason in the context of a membership application?

However, the availability of judicial review does not prevent the board from setting reasonable standards for admission. The issue becomes the type of standards which are permissible. In Pinsker v. Pacific Coast Society of Orthodontists (1974) supra, 12 Cal.3d 541, 550, 116 Cal.Rptr. 245, 526 P.2d 253, we required only that an association's membership rules be rationally related to legitimate purposes and fairly applied. But in Pinsker we did not deal with allegations of antitrust violations and thus were not confronted with the same policy considerations facing us today. In the present case, it has been demonstrated that the board's 'primarily [16 Cal.3d 939] engaged' rule poses serious anticompetitive dangers to society. In such a case, the rule of reason requires not only a demonstration that the anticompetitive practice relates to a legitimate purpose, but also that it is reasonably necessary to accomplish that purpose and narrowly tailored to do so.

In Union Circulation Company v. Federal Trade Com'n (2d Cir. 1957) supra, 241 F.2d 652, a federal court used the rule of reason to invalidate an agreement among magazine subscription solicitation agencies not to hire any salesman who had been employed by another agency during the past year. The agencies argued that the agreement was enacted to police the industry and was directed at personnel who had engaged in deceptive sales practices. But the court, noting that the agreements could be invoked against salesmen with unblemished records as well as against those targeted, declared, 'The agreements here went beyond what was necessary to curtail and eliminate fraudulent practices.' (Id. at p. 658.)