Why the Caddies Lost Their Lawsuit Against the PGA Tour

February 11, 2016

If PGA Tour caddies become human billboards by wearing bibs that display corporate logos and insignia, that’s the caddies’ fault — even if they’re not adequately compensated by the Tour.

So ruled U.S. District Judge Vince Girdhari Chhabria, who has dismissed a federal lawsuit brought by Mike Hicks and 167 other caddies against the Tour. Judge Chhabria’s dismissal — which was “with prejudice,” meaning the same lawsuit cannot be refiled — can be appealed to the U.S. Court of Appeals for the Ninth Circuit, the same federal appeals court that recently ruled in favor of Ed O’Bannon in a conceptually similar case involving the NCAA’s use of Division I men’s basketball and football players’ name, image and likeness rights. The caddies and their attorneys might develop different legal theories to use against the Tour in a separate lawsuit, but for the time being, the caddies have lost and the Tour has won.

The caddies’ lawsuit traces back to February 2015, when they sued to raise contract, antitrust and intellectual property claims against the Tour. The key fact in the litigation centers on the Tour’s contractual requirement that caddies — who work directly for players but nonetheless contract with the Tour and who often appear on televised Tour broadcasts — wear bibs that display Tour sponsorships. The caddies assert that the law should compel the Tour to compensate the caddies for wearing them.

Although finding merit in the caddies’ core policy contention of “poor treatment” by the Tour, Judge Chhabria nonetheless found the caddies’ legal claims to be deficient. The main problem, according to the judge, is that caddies contractually assent to wear a “uniform,” which traditionally has included a bib. In other words, the caddies agreed to wear the item of clothing they’re now complaining about.

The voluntary decision of caddies to accept a contractual uniform requirement also works against their contention that they have been victimized by economic duress. The caddies insist that because they “lack viable employment alternatives” to caddying on the Tour, they have no viable choice but to accept the uniform requirement. Put another way, the caddies charge that their contractual assent should be rescinded because it reflects an illusory choice: No caddy can negotiate out of wearing a bib because it is a take-it-or-leave-it proposition. Although this argument appears factually true — the uniform is non-negotiable — Judge Chhabria wasn’t convinced. He reasoned that caddies knew what they were getting into by entering this profession.

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Judge Chhabria was also highly critical of the caddies’ arguments under the “right of publicity,” which protects individuals from unauthorized use of their names, images and likenesses. He again found the caddies’ contractual assent to be determinative, highlighting how “caddies have consented to the use of their images at tournaments to display what is on the bibs” and have “granted and assigned to the Tour their ‘individual television, radio, motion picture, photographic, electronic, … and all other similar or related media rights with respect to’ their participation in Tour events.”

Judge Chhabria likewise rejected the caddies’ arguments sounding in federal antitrust and trademark laws. The antitrust argument centers on the Tour’s extensive — if not monopolistic — control over caddies’ employment opportunities and the inability of caddies to negotiate with sponsors over the same space used by Tour sponsors on the bibs. The caddies charge that this dynamic constitutes an unlawful restraint of trade under the Sherman Antitrust Act. Judge Chhabria disagreed, holding that the caddies failed to adequately identify how consumers are harmed by the bib policy. While the caddies insist that the markets for golf endorsements and advertisements are harmed by a bib policy that diminishes competition for bib space, Judge Chhabria reasoned that the relevant markets of analysis are far broader than those envisioned by the caddies and that they are not sufficiently impacted by the bib policy. If the caddies appeal, expect a fight over how relevant markets were assessed by Judge Chhabria.

The caddies also maintain that the Tour tricks consumers into believing that the caddies have endorsed the companies whose logos and insignia appear on bibs when in fact there is no contractual relationship between the caddies and those sponsoring companies. This type of claim is sometimes called a “false endorsement” claim, and it invokes the federal Lanham Act. Generally speaking, the Lanham Act prohibits endorsements that tend to cause consumer confusion. Judge Chhabria rejected a false endorsement theory, reasoning that the caddies contractually assented to wear the bibs, thereby providing a sufficient nexus between the caddies and the sponsoring companies.

While Hicks v. PGA Tour was unsuccessful at the district court level, there could be an appeal. Either way, the ruling may not be the last word on how caddies are compensated by the Tour.

Michael McCann is a legal analyst and writer for Sports Illustrated. He is a Massachusetts attorney and the founding director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law. Follow him on Twitter @McCannSportsLaw.