Lessons Learned from PGA Caddies’ Lawsuit

By February 22, 2016 October 25th, 2018 Business Blog, Corey Van Houten

As an avid golfer, I follow the PGA Tour rigorously. A recent lawsuit involving the PGA Tour and professional caddies certainly caught my eye and it may provide employers with tools to help keep more money in their pockets (Hicks et al v. PGA Tour Inc., CV15-00489 (N.D. Cal., filed Feb. 2, 2015)). A class action lawsuit filed by PGA Tour caddies was recently dismissed with prejudice in federal court – the caddies claimed that they should be compensated for brandishing caddie bibs affixed with corporate logos during televised PGA tournaments. The Court’s ruling provides businesses with a reminder on how to avoid losing intellectual property battles with employees.

PGA Tour caddies find the television spotlight nearly every time their golfer is shown during a tournament. Corporate logos on caddie bibs are as much a part of their “uniform” as red Nike shirts once were for Tiger Woods, before he started missing cuts, and orange Puma gear currently is to Rickie Fowler. However, unlike these golfers, and myriad others, the judiciary has ruled that caddies are not entitled to payment for walking around as human billboards.

By contract, PGA tour caddies are required to wear tournament bibs. This requirement is set forth in their employment agreements, along with provisions pertaining to compensation for sponsorship branding. In terms of fairness, it could be argued that it’s unfair they get nothing and someone like Jordan Spieth can earn tens of millions in endorsements each year for essentially doing the exact same thing. However, from a legal perspective, this decision was correctly decided because the caddies had signed contracts with the PGA setting out their rights relative to this issue.

Employers should take note and be certain that their employment contracts clearly define employee rights so that employees know what they are getting when they “sign-up.” In this case, the Court found that the caddies knew they had to wear the tournament bibs for each tournament and that by the terms of their employment contracts, the PGA Tour had no duty to dispense any corporate sponsorship revenue to caddies based on their publicity rights.

Establishing clear boundaries for intellectual property rights are very common in today’s employment contracts. All employers should ensure their employment contracts are vetted for looming intellectual property issues. Being a PGA Tour caddie is a good gig, but it’s not nearly as good as it could be because the PGA Tour spent the time and money to draft thorough employment contracts.