- Hicks vs. PGA Tour—a lawsuit filed by more than 80 PGA Tour caddies over their being forced to wear branded bibs without compensation—didn’t persuade judges but helped to produce a resolution that benefits caddies. SI legal analyst Michael McCann breaks down the suit from both sides.
Three years after Mike Hicks and more than 80 other professional caddies told a federal court that they had become unpaid human billboards for companies sponsoring the PGA Tour, the caddies and tour have reached a resolution that improves their relationship. As reported by Golf Channel’s Rex Hoggard, the PGA Tour has agreed to offer caddies higher stipends for health care insurance. The resolution was facilitated by negotiations between PGA Tour president Jay Monahan and Association of Professional Tour Caddies president Scott Saitinac (the APTC is a trade association of Tour caddies).
Understanding the caddies’ legal claims
The genesis of the caddies’ grievance stems from the bibs they wear during rounds and the contractual relationship between caddies, golfers and the Tour. Caddies are employed by golfers as independent contractors. Caddies are not employed in any way by the Tour or the host golf course. However, in order to become eligible to loop for a golfer in a Tour-affiliated tournament, caddies must sign a “Caddie Registration and Regulations Form.” Among other things, this form explicitly states that caddies grant and assign to the Tour their Tour-related media rights.
The form also requires the caddie to comply with Tour-dictated uniform regulations. Such regulations include the provision that “caddies shall wear smooth rubber-sole shoes, preferably tennis or basketball shoes” and that “caddies are required to wear solid-colored, Khaki-style long pants, which touch the top of the shoe, or solid-colored, knee-length, tailored shorts or skorts and a collared shirt while on club property.” Though not enumerated in these regulations, the Tour has been requiring caddies to wear bibs with the tournament sponsor logo on them for years.
Sponsors view the bibs as worthy of their dollars because caddies are often situated near the golfer and are thus shown on television broadcasts and in commercial photographs seen by numerous consumers. Thus, the sponsors pay the Tour and the local host…but not the caddies. Consequently, some caddies feel as if they are endorsing products without their consent and without being compensated. This is particularly disconcerting to those caddies because, as noted by Chief Judge Sydney Thomas of the U.S. Court of Appeals for the Ninth Circuit, “with exposure to live tournament, television, and webcast audiences, advertising space on the bibs is valued at approximately $50 million annually…local hosts and the Tour receive the entirety of these revenues [while] the caddies receive none.”
The caddies who sued the PGA Tour did so in the U.S. District Court for Northern California. During the litigation, they asserted that the Tour’s no-pay bib arrangement violates several areas of law. One key area is the Sherman Antitrust Act. The caddies insisted that the bib policy unlawfully restrains competition since the only sellers of bib space are the Tour and the local host. If caddies could also sell their own sponsorships for the bibs, there would be more competition for logos and insignias on those bibs and thus a more competitive market. The caddies also maintained that by being used to market another entity’s sponsor, caddies’ images and likenesses are misappropriated by the Tour. Further, they charged that Tour-sponsored bibs lead to consumer confusion since consumers can falsely surmise that caddies endorse particular companies when in reality they don’t.
The caddies’ legal arguments were developed by Eugene Egdorf of the Houston-based Shrader and Associates, as well as by Mark Lanier, Benjamin Major, NYU law professor Arthur Miller and other attorneys at the Houston-based Lanier Law Group. The PGA Tour was defended by Jeffrey Mishkin, Anthony Dreyer, Jay Neukom and other attorneys at the New York-based Skadden Arps Slate Meagher & Flom.
Courts were unwilling to rule for the caddies
In 2016, U.S. District Judge Vince Girdhari Chhabria dismissed the caddies’ lawsuit but did signal that he was sympathetic to the notion that caddies are recipients of unfavorable treatment. Judge Chhabria stressed that although the bib arrangement may seem unfair, caddies voluntarily agreed to wear a uniform prescribed by the Tour. He was also unpersuaded by the caddies’ assertion that consumers were confused into believing the caddies endorsed the sponsored companies. Judge Chhabria noted that consumers shouldn’t be confused since the caddies agreed to wear the bibs.
The caddies appealed Judge Chhabria’s ruling to a three-judge panel on the U.S. Court of Appeals for the Ninth Circuit. The caddies had some reason for optimism. A year earlier, the Ninth Circuit had ruled in favor of Ed O’Bannon and his antitrust case over the use of Division I men’s basketball and football players’ names, images and likenesses in video games and other commercial products. O’Bannon proved that the NCAA and its roughly 1,300 member schools, conferences and other affiliated organizations unlawfully conspired to deny college athletes the opportunity to negotiate and receive pay for the commercialized use of their identities. By stressing how the NCAA prevented college athletes from being able to negotiate rules that denied them compensation, O’Bannon overcame arguments by the NCAA that these athletes had waived away any claims when agreeing to abide by amateurism rules.
The caddies were likely also encouraged to see that the three-judge panel included Chief Judge Sidney Thomas, who had ruled in favor of O’Bannon. Judge Thomas not only affirmed U.S. District Judge Claudia Wilken’s ruling in O’Bannon that the NCAA violated antitrust law, he also, in a separate opinion, maintained that Judge Wilken properly determined an appropriate remedy when she ordered the NCAA to permit up to $5,000 in deferred compensation above student-athletes’ full cost of attendance (the other Ninth Circuit judges, Jay Bybee and Gordon Quist, vacated that remedy).
Unfortunately for the caddies, Chief Judge Thomas, along with Ninth Circuit Judges Michael Hawkins and Kathleen O’Malley, endorsed Judge Chhabria’s reasoning. Writing for the three-judge panel last year, Chief Judge Thomas stressed that the caddies had clearly consented to wearing the bibs. He also failed to see any sort of duress on the part of caddies to agree the wear the bibs since “the Tour had required [caddies] to wear bibs for decades.”
However, the three-judge panel left open the door for the caddies to continue their litigation. The panel instructed Judge Chhabria to reconsider his decision to deny the caddies an opportunity to amend their antitrust and other claims. The panel highlighted that Judge Chhabria had dismissed those claims with prejudice—meaning the claims couldn’t then be re-filed—without adequately explaining why the caddies were not offered a chance to revise their theories. The caddies could have continued the litigation for an indefinite period of time. Instead, the caddies—who were unlikely to plead the necessary facts to establish viable legal claims—declined to pursue the litigation further. Subsequent to the caddies’ decision, the Tour improved stipends for caddies’ health care. While increased stipends do not necessarily address the caddies’ concerns about bibs, they do provide the caddies an important benefit of monetary value.
The resolution ends the legal dispute in a way that both sides can feel victorious. The caddies will receive new employment benefits they might not have obtained without suing, while the Tour can continue its bib policy and the sponsorship value it provides. However, as companies seek to identify new and different kinds of sponsorships, the relationship between caddies, clothing and the Tour will likely require continued discussion and negotiation.
Michael McCann is SI’s legal analyst. He is also Associate Dean of the University of New Hampshire School of Law and editor and co-author of The Oxford Handbook of American Sports Law and Court Justice: The Inside Story of My Battle Against the NCAA