Brooks Koepka’s departure from the Professional Golfer’s Association and his decision to take part in the upcoming LIV golf series marks the most recent chapter in what is expected to be a continued saga between the rival golf tours. Since the announcements of golfers like Dustin Johnson and Phil Mickelson joining the LIV in exchange for vast sums of money from the Saudi Arabian Public Investment Fund, the subject has been dominating headlines in sports media. However, there is a critical element missing from the discourse: employee misclassification.
Developments in the Golf World
The implications of the golfers’ defections to the LIV series are not yet entirely known, but the topic is ripe for speculation. As the world’s top golfers begin migrating to the LIV, some are expecting a cascading effect in which an increasing number of established names follow suit to chase the growing competition and surplus cash.
The PGA responded to the recent defections of its members by suspending their ability to return to the tour or participating in tour events and threatened potential defectors with the same sanctions. PGA Tour Commissioner Jay Moynahan cited these players’ violation of PGA tournament regulations as well as their failure to receive or apply for the necessary conflicting event and media rights releases as reasons for the suspensions. In response, the LIV described Moynahan’s statement as ‘troubling’ and ‘restrictive’, claiming that the future of the industry would be characterized by an increase in agency for its athletes.
Inevitably, the discussion returns to worker classification, a subject at the heart of employment law. PGA golfer Rickie Fowler asked the question that introduces this legal debate: are golfers independent contractors or employees? This distinction may play a role in determining the potential liability of the PGA for punishing the departing golfers. To better understand this topic, it is important to be aware of the key differences between employees and independent contractors, and the legal implications of misclassifying individuals.
The Misclassification of Golfers
The difference between employees and independent contractors was explained in my previous article about UFC fighters. In short, businesses might hire both employees and contractors, but there are many differences in their terms of employment. For example, while employees enjoy the stability and statutory benefits of being a member of a company, contractors are retained for specific projects without formal membership, meaning they are not provided the same protections or given the same limitations. Understandably, misclassifying workers (listing employees as contractors, and vice versa) can create legal risks for employers.
Golfers in the PGA are independent contractors. As a result, one might expect that they would have a higher degree of control over their ability to provide services. This might include the freedom of the players to choose which tours to play in, or their ability to play in multiple tours simultaneously. However, the PGA’s punishment of golfers such as Dustin Johnson seems to suggest that this freedom is not necessarily afforded to its members.
To add a further twist, it is arguable that an independent contractor status triggers protection of the PGA from anti-trust scrutiny. Since the NFL and other major sporting leagues’ players are employees of their team and are union members, their employment conditions are obtained through collective bargaining. To the benefit of the leagues, employing union members protects the leagues from anti-trust allegations. However, this protection doesn’t necessarily apply to the PGA because its members are independent contractors.
In effect, any PGA action to stop or punish a former member for playing in the LIV could constitute anti-competitive practices. Players might be able to pursue anti-trust litigation, arguing that the PGA Tour is attempting to establish a monopsony as the sole purchaser of labour.
Takeaway
This article provides a brief explanation of the difference between employees and independent contractors in the context of the developing rivalry between the PGA Tour and the LIV and explores the legal implications of what may unfold in the golf world.
It is important for both employers and employees to be aware of the legal risks associated with worker misclassification. As mentioned, misclassifying workers can undoubtedly create liabilities for employers, so establishing clear terms of employment can go a long way in mitigating legal risks for businesses.
If your business is dealing with employment issues, whether they are from improper employment contracts or a developing misclassification incident, our experienced employment advisors can help.