According to an ESPN analyst, the PGA Tour “treats its caddies like outside dogs.”  In apparent sympathy with the caddies’ plight, Judge Vince Chhabria of the U.S. District Court for the Northern District of California cited that statement in his recent opinion involving the caddies’ bibs.  Nevertheless, the Court dismissed with prejudice the caddies’ class action complaint that alleged that the Tour’s practice of requiring that they wear bibs displaying corporate logos without compensation violated California law.  Hicks v. PGA Tour, Inc., Case No. 15-CV-00489-VC (N.D. Cal. Feb. 9, 2016).

Background

PGA Tour caddies have been required to wear bibs for decades.  So, according to the Court, they knew when they entered the profession that wearing a bib during tournaments was part of the job.  The bibs display the name of the golf tournament, the name of the golfer for whom the caddie works, and often corporate logos.  Id. at 1-2.  The caddies alleged that the Tour could not require them to wear the bibs during tournaments, or at least that the Tour must compensate them for doing so, because of the publicity the bibs provide for the Tour and it sponsors.  Their class action complaint asserted claims for breach of contract, including duress and unjust enrichment, and for violation of the “right of publicity,” federal antitrust laws, the Lanham Act and the California unfair competition law.

The Court’s Opinion

For each tournament in which the caddies participate, they are required to sign form contracts with the Tour.  But, according to the Court, the agreements did not prohibit the Tour from requiring the caddies to wear bibs.  To the contrary, the Court interpreted the contracts to require the caddies to wear uniforms, including bibs, as prescribed by the host tournament and the PGA Tour.  By consenting to wear bibs, the caddies relinquished any right they otherwise would have had to display endorsements on the parts of their shirts covered by the bibs, and therefore they had no claim for breach of contract.  Id. at 3-6.  The Court also rejected the caddies’ argument that they were forced to sign the contracts under duress because they had no preconceived notion that a significant portion of their income would be derived from logos displayed on their shirts.  Finally, there was no unjust enrichment claim because they agreed in their written contracts to wear the bibs.  Id. at 7-8.

The consent given in the written agreements was also fatal to their claims for violation of the “right of publicity,” the Lanham Act and the California unfair competition law.  The “right of publicity” claim was based upon the argument that the Tour had misappropriated their right to seek endorsements.  But the misappropriation claim required “lack of consent” which was freely given in their written contracts.  Id. at 9-10.  The Lanham Act claim was based on a theory that the Tour was misleading golfing audiences to believing that the caddies endorsed the products or services of the bibs’ sponsors.  But such a claim can prevail only if the use of the caddies’ identity was unauthorized.  Here, the consent given in the contracts authorized that use.  Id. at 14.  Finally, the Court noted that the California unfair competition law overlapped the claims for breach of contract, misappropriation of their likenesses, and the antitrust violations.  Since those claims failed, so did the unfair competition claim.  Id. at 15.

While the consent given did not defeat the caddies’ antitrust claim, the inability to allege a plausible relevant market did.  To state a claim for violation of the antitrust laws, the plaintiffs must allege harm to competition, and not merely harm to competitors.  In an attempt to do so in this case, the caddies alleged harm in two very narrow markets: an Endorsement Market, consisting of the national market for the endorsement of products and services by participants in professional golf tournaments; and the Live-Action Advertising Market, consisting of the national market for in-play or in-action commercial advertising at professional golf events between commercial breaks.  Id. at 11-12.  However, the Court found that neither of these markets was plausible.  The Court concluded that if the alleged restraint on the caddies’ right to endorse and advertise products or services on their shirts during golf tournaments restrained competition to the extent that prices increased within those markets, advertisers could easily shift to other forms of advertising to reach their intended audiences.  Thus, the caddies’ antitrust claims were dismissed as well.  Id. at 12-13.

Implications

Central to the caddies’ alleged claims in this case is the allegation that they are employees of the golfers playing in the tournaments rather than the PGA Tour itself.  Clearly, if the caddies were employees of the Tour, then the Tour could dictate the caddies’ uniforms regardless of what the contracts said.  But if the outcome of these claims is upheld on appeal, the caddies might switch theories.  Under the broader definitions of joint employment being urged by both the Department of Labor and the National Labor Relations Board, they might seek to assert rights against the PGA Tour as a joint employer.