Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Caddies sue PGA Tour for allegedly coerced, uncompensated sponsor endorsements, (Feb 4, 2015)

By Linda O’Brien, J.D., LL.M.

The PGA Tour, the most prominent organizer of professional golf tournaments, has compelled caddies employed by professional golfers to wear the logos of corporate tour sponsors, which generate millions of dollars in advertising revenue, without compensation to the caddies, according to a complaint filed in the federal district court in San Francisco (Hicks v. PGA Tour, Inc., February 3, 2015).

PGA Tour, Inc. organizes and promotes three tours of professional golf tournaments held across the United States. Spectators in attendance view the tournament live, and tournaments are generally televised, broadcast on the Internet, and viewed on video-on-demand platforms. William Michael Hicks and Kenneth Harms are independent contractors employed as caddies for professional golfers who compete in professional golf tournaments organized and promoted by PGA Tour, Inc.

The complaint states that the PGA Tour’s player handbook includes an endorsement policy limiting placement and size of sponsor logos. Pursuant to the policy, players negotiate exclusive endorsement deals and wear sponsor logos on their attire. Caddies are permitted to endorse products under the endorsement policy to the same extent as players. However, the defendant has constricted the caddies’ endorsement potential and usurped their endorsement opportunities.

Notwithstanding the language of the endorsement policy, the PGA Tour compels caddies to wear “bibs” bearing tour sponsor logos during professional golf tournaments. The sponsor that is represented by the logos pay the defendant for bib space and receive significant exposure to live tournament, television, and webcast audiences. Although the revenue generated from the bib advertising is approximately $50 million annually, the caddies receive none of that revenue and have never consented to the defendant’s commercial use of their likenesses and images. Moreover, the defendant has threatened to prohibit caddies refusing to wear the bibs from providing services at tournaments organized by PGA Tour and has contacted tour players to determine if they would be willing to terminate their agreements with caddies who refuse to wear the bibs, the complaint alleges.

According to the plaintiffs, the PGA Tour has known that caddies expect payment for wearing corporate logos. Caddies have the option to wear caps bearing the logo of one the Tour’s corporate sponsors, and the defendant has created a formula for compensating caddies who wear those caps during tournament play. Thus, the defendant cannot reasonably deny knowing that caddies expect to be paid to endorse sponsors on their other attire, including bibs.

The defendant has made a calculated decision to use caddies’ likenesses and images to endorse tour sponsors. By forcing caddies to wear the bibs, PGA Tour benefits from the commercial use of caddies’ likenesses and images and their status as professional caddies.

The plaintiffs assert claims for right of publicity and misappropriation of likeness, breach of contract, unjust enrichment, duress, and violations of Sections 1 and 2 of the Sherman Act, Lanham Act, and California’s Unfair Competition Law. The action seeks injunctive relief, treble and punitive damages, disgorgement, pre- and post-judgment interest, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 3:15-cv-00489-VC.

Attorneys: Lee Cirsch, W. Mark Lanier, Eugene R. Egdorf, Benjamin T. Major, Ryan D. Ellis, and Arthur R. Miller (The Lanier Law Firm, PLLC) for William Michael Hicks and Kenneth Harms.

Companies: PGA Tour, Inc.

News: Antitrust CaliforniaNews