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Wednesday, May 11, 2022

The Tour Draws a Line in the Sand...

...and things are about to get messy.

LIV Golf promo

With the PGA Tour denying player wavers into the first LIV Golf event in June, I think it's pretty clear that this will likely become a legal battle after all.

PGA Tour members are generally considered 'independent contractors.' But to play regular schedules on the Tour, players do have to sign a contract agreeing to follow the Tour's rules... and those rules limit when and where they can play outside the PGA Tour. And the legal issue in question, I think, is a very simple one:

Are independent contractors bound by contracts they sign to get and keep a job?

To me this seems like a no-brainer. The obvious answer is YES, because this is a legal business agreement and I don't see how any court could rule otherwise without completely destroying a basic tenet of business all over the world. It would throw EVERY business into chaos because it would mean, in effect, if you sign a contract and decide you don't want to follow it, then you can break your contract without any repercussions.

No business people in their right minds would allow the people they work with, either employees or contractors, to take the things that give their businesses an advantage over their competitors. That would destroy the competitive advantages that allow businesses to grow and evolve. To make such a ruling would create an unheard-of precedent, inundating the court system with millions of cases representing literally decades of standard business practice. The world economy would collapse.

In addition, the PGA Tour is a 501(c)(6) organization... and if I understand the law, that makes it a non-profit organization. Does the government want to meddle in the affairs of non-profits responsible for thousands of jobs and billions of dollars in charitable donations, again destroying decades of legal precedents? Again, I don't think so..

But will this end up in court? I'm afraid it probably will and, although I hate to say so, I think it will do so simply because Greg Norman -- who has always been one of my favorite golfers -- has apparently had an axe to grind with the PGA Tour since the 1990s over the whole idea of a world tour.

Do I think the courts will rule in his favor? If the rule of law and cool heads prevail, I don't see how it can. This idea that a competing tour has to be given special concessions that other businesses would not dream of asking for is absolutely ridiculous. But this whole thing appears to be less about creating an actual tour with a value of its own and more about egos and politics.

Buckle up, folks. Things are about to take a nasty turn. I just hope it doesn't ruin the improved social reputation that modern golf has spent so much time trying to build, just for the sake of a few people with massive egos and political agendas.

2 comments:

  1. I am not sure what your credentials are in making this comment, but it is apparent that you are not analyzing existing antitrust law. It is very likely that the PGA rules violate US antitrust laws and that they will not be upheld. Is that certain - clearly not. But if legal authorities for the last 70 years are not overturned or distinguished, the PGA should lose. And to be clear, this is not just about golfers, it is about all independent contractors. The entire point of independent contractor status is that the workers are not employees and not subject to the control of those they work for. The Tour cannot have it both ways. Either they must pay pros as employees, or they have to grant them the same rights as all other independent contactors. Think of them as any other contractor - the plumber, accountant, A/C repair or painter. Why would golf be any different? The issue is whether the contract terms that you refer to are legal and enforceable. I submit they are not.
    I also submit this dispute is as much about the touring pros that make little or nothing as compared to the top 50. It seems like the top 50 are pushing the agenda - and that is fine. But the real benefit is likely to be for those outside the top 50. We will see.

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    1. JM, I don't have any credentials beyond owning a small one-man business. But I'm glad you decided to comment because I love it when people who know more about a topic add their expertise to my posts which, admittedly, are based on my own observations and opinions. So let me add why I think this would be a tough case for LIV to win.

      It seem to me that businesses have a right to require contractors to not work against the business's interests while in their employ. As far as I can see, the very term "contractor" means you are temporarily employed by the one who contracted you, with the contract defining the terms of your brief employment. You are "independent" in the sense that you aren't required to work for them -- i.e., you can work somewhere else. As I understand it, the PGA Tour's contractors are under contract to play PGA Tour events rather than conflicting events from other tours, providing that the players and the Tour don't make other arrangements (such as receiving a waiver to play another tour's event in exchange for playing a two or three PGA Tour events they wouldn't normally play in a given time period).

      I don't see this as an antitrust case, simply because the PGA Tour isn't the only game in town. It's not like the old Bell Telephone system where the only phone service you could use HAD to go through Bell; there are other tours not associated with the PGA Tour on which a player could play.

      And I think some of the players recognize this. DJ and Kevin Na, for example, have resigned from the PGA Tour because they realize they would be in breach of contract if they didn't. And I suspect they believe that by taking this action, they will have honored the terms of the contract and, should they decide they want to come back, they will be treated differently than players who tried to have it both ways.

      To sum up my thoughts, (1) this isn't an antitrust case because the PGA Tour isn't a monopoly, (2) an independent contractor is a temporary employee whose terms of employment are determined by a contract they agreed to and (3) if those two things are true, failure to live up to the terms of that contract is legally a breach of contract and no court is going to rule in favor of the contract breaker. I think the first two are where we disagree here. If LIV expects to prove that the PGA Tour is a monopoly, I think they're in for a tough battle. After all, based on what we know, LIV's contracts appear to be even more controlling than the PGA Tour's.

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