Caddies File Federal Lawsuit Against PGA Tour

by Brandon S. Ross

It is no secret that the PGA Tour is a multi-million dollar organization, with annual revenues consistently ranking in the hundreds of millions.[1] A significant portion of this revenue comes from corporate sponsors, who pay the PGA Tour tens of millions of dollars to have their logos plastered across the caddies’ bibs.[2] With the revenue continuing to pour in and the caddies reaping none of the benefits, they feel as though the PGA forces them to become unpaid human billboards for the advertisement of companies sponsoring the Tour.[3] On February 3, 2015, the caddies finally made their displeasure known by filing a multi-million dollar federal lawsuit against the PGA Tour in the Northern District of California.[4] The caddies are claiming the Tour unlawfully compels them to wear logos and other insignia of corporate sponsors on their bibs, and allegedly prevents them from sharing in tens of millions of dollars in annual advertising revenue.[5] In seeking redress from the federal court system,

[t]he caddies have petitioned the court to certify [Hicks, et al. v. PGA Tour Inc.][6] as a class action on behalf of all caddies residing in the United States who, without pay, wear or have worn bibs bearing the logos of the Tour’s sponsors during tournaments. This proposed class would include about [one thousand] caddies and potentially threaten the PGA Tour with hundreds of millions of dollars in damages.[7]

Although the enormity of a caddy’s role in a PGA tournament cannot be overstated,[8] the golfers, rather than the Tour, employ the caddies.[9] A contractual condition of participating in the tournaments, however, stipulates that caddies must adhere to Tour regulations.[10] This condition enables the PGA Tour to expect that the caddies wear bibs over their shirts, “which bear logos of companies paying the PGA Tour but not paying the caddies,”[11] and “are seen during television broadcasts of tournaments and are captured in photographs used in magazines and on websites.”[12] According to the caddies’ class complaint, “the bib provides the most valuable marketing medium between commercials during tournament broadcasts . . . . [And] the annual value of the bib exceeds $50 million.”[13] The caddies’ complaint also alleges that the PGA Tour

has threatened to prohibit caddies from receiving endorsement money from any sponsor that competes with Defendant’s sponsors or from any of Defendant’s sponsors who reduce their investment in Defendant because of an endorsement agreement with one or more of the Plaintiffs. Believing they have no reasonable choice but to comply with Defendant PGA [Tour’s] demands, Plaintiffs have continued to wear the bibs without compensation.[14]

The caddies’ lead attorney, Eugene Egdorf, stated that, “the PGA Tour imposes all sorts of restrictions on caddies for its benefit, yet refuses to provide the most basic of benefits . . . . [T]he caddies want their fair share of the value they provide.”[15] In addition to intellectual property and contract law claims, the caddies contend that, “the Tour has monopoly control over employment opportunities for caddies in the U.S. and has conspired with local tournament organizers to force caddies to wear bibs. These local tournament organizers, according to the caddies, selfishly stand to profit by enforcing the Tour’s rules.”[16] While the initial filing of the caddies’ federal lawsuit is merely the first step in what will assuredly be a grueling legal process, if the caddies can advance past a motion to dismiss, their hope is that the PGA Tour will opt to settle the lawsuit, rather than move forward with pretrial discovery.[17] This would likely mean, at the very least, a change in the bib policy, and perhaps substantial compensation.[18]

[1] See Monte Burke, The PGA Tour: A Not-For-Profit Money Machine, Forbes (May 8, 2013, 10:00 AM), http://www.forbes.com/sites/monteburke/2013/05/08/the-pga-tour-a-not-for-profit-money-machine/ (“According to the PGA Tour’s 990 tax form, revenues in 2011, its most recent reporting year, were $973 million.”); Beyond Tiger, The Economist (June 11, 2011), available at http://www.economist.com/node/18805531 (“Total direct revenues fell a bit between 2008 and 2010, from $486 [million] to $461 [million].”).

[2] See Darren Heitner, Golf Caddies Sue PGA Tour for Piece Of Revenue from Ads They Wear on Bibs, Forbes (Feb. 8, 2015, 12:09 PM), http://www.forbes.com/sites/darrenheitner/2015/02/03/pga-tour-sued-by-golf-caddies-for-pocketing-tens-of-millions-of-dollars/ (“The PGA Tour allegedly receives tens of millions of dollars from corporate sponsors in exchange for the advertising on the bibs.”).

[3] Michael McCann, Caddies File $50 Million Lawsuit Against PGA Tour, GOLF (Feb. 3, 2015), http://www.golf.com/tour-and-news/caddies-file-multi-million-dollar-lawsuit-against-pga-tour.

[4] See id.

[5] See id.

[6] Plaintiffs’ Original Class Action Complaint for Damages, Hicks, et al. v. PGA Tour, Inc., No. 3:15-CV-00489 (N.D. Cal. Feb. 3, 2015), 2015 WL 436042.

[7] McCann, supra note 3.

[8] See id. (“From the vantage point of a golfer, caddies are instrumental. Golfers rely on caddies for their expertise on clubs, swing techniques and course topography, among other crucial aspects of competitive golf. Caddies are also famously known for lending emotional support and counsel.”).

[9] Id.

[10] See id.

[11] Id.

[12] Id.

[13] Hicks, supra note 6.

[14] Id.

[15] McCann, supra note 3.

[16] Id.

[17] See id.

[18] See id.

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