Kind of an aside to the OP but still regarding ethics. Don't know if this has happened in other parts of the U.S. but I don't see why not. ASCAP or BMI (not sure which, maybe both) have hired local musicians to go undercover and search out clubs that don't pay royalty fees and then rat them out along with the musicians that play those clubs. I know of several musicians who lost regular long-term weekly gigs due to this. The question is who deserves the term 'unethical' to be attached to their name the most, ASCAP or BMI for coming up with the idea, the club owner for not paying royalty fees, or the musician(s) doing the ratting-out?
What does a musician have to do with paying Ascap or BMI? To my knowledge, we don't. Clubs do. If clubs play cover songs, they are required to have a license and it's been that way for decades. The club is responsible, not musicians, right?
Now, if the club fired bands who play cover songs because the venue was too cheap to pay the license, who's the bad guy? I dunno, seems to me that a club that genuinely cannot afford a license is either lying, too cheap to fork it over, or about to go under anyway. I don't think licenses cost that much, in the big scheme of things, which is a club's annual budget. Correct me if I'm wrong.
The copyright laws seem pretty straight-forward... if you (venue) profit from the intellectual property rights of others (songwriters), you must buy a license so that royalties can be paid to those who created the intellectual property. As for Ascap and BMI and the way they operate (which some say is inconsistent but I have no way of knowing that), I don't have an allegiance to them, only to the principle.
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