The Impact of New State & Federal Labor Laws & Rules on Your Caddie Program

The first few months of 2024 have seen two new laws go into effect at the federal and state level that could impact the administration of your caddie program. The Federal Trade Commission (FTC) is also expected to release a new rule affecting competition and caddie non-compete agreements. Here is a quick summary of the recent laws and pending rule changes.

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1. U.S. Department of Labor (DOL) Independent Contractor (IC) Classification Ruling

The newly published rule outlines various factors that clubs and caddies should consider when determining if a caddie is an employee or IC. While this weighting of multiple factors is far better than the more extreme “ABC Test” used in several states, the new focus on evaluating the worker relationship as a whole provides opportunities and threats to caddie programs. The newly defined factors, as related to golf clubs with a caddie program, include:

Degree of control by club
Opportunity for profit or loss by caddie
Caddie investment in work-related materials
Permanence of relationship between the caddie and club
Necessity of the caddie to the club’s business
Level of skill and initiative by caddie

What Does This Mean for My Club?

Your caddies may pass the IC test on three to five of the above factors but fail on the other two to three. In court, each of these factors would be weighed on a case-by-case basis to determine whether the caddie/club relationship is that of employee or contractor.

There may be no easy or cut and dry answer when evaluating your caddie program for these factors. CaddieNow recommends consulting with your club’s legal counsel to evaluate the scenarios specific to your club.

The caddie management company you choose should insure caddies, protect members, and fully indemnify the club with regards to caddie misclassification, wage, and personal injury. When you partner with CaddieNow, the liability associated with your club’s caddie employment status is taken off your plate in the form of club indemnification, caddie injury insurance, and general liability coverage. What’s more, CaddieNow helps clubs institute the proper processes, record payments, and track the performance of IC caddies to ensure compliance and protection.

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a golfer and a caddie fist bumping on a golf course

2. New Jersey Law Change on Who Can Sue Clubs

This New Jersey ruling expanded the parties who can sue clubs in state court related to employee/caddie misclassification. Previously, labor misclassification lawsuits needed to be brought by an affected party. This new ruling allows any golfer, guest, or outside entity/party/ law firm who believes a law has been broken to file suit. This ruling has the potential to expose every caddie club in New Jersey to legal action and lead to a dangerous precedent that other states may follow. Over 20 lawsuits have been brought in New Jersey over the past two years by caddies and one specific law firm alone.

What Does This Mean for My Club?

This rule change could create even more turmoil in New Jersey’s caddie programs. If a “concerned citizen” sees problems at your club with how caddies are being treated (in their opinion), they have the option to sue. This is an additional risk that clubs are unlikely to want to absorb.

To fully protect your club, members, and caddies from the wage and hour, personal injury, and worker classification issues present in every caddie program, you need a caddie service provider. CaddieNow fully understands the implications of this ruling and will work with your club to ensure every issue is addressed and compliant from top to bottom.

a golfer and a caddie exchanging a fist bump on a golf course

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3. Federal Trade Commission (FTC) Proposes Rule to Ban Non-Competes

In January of 2023, the FTC proposed a new rule that would completely eliminate non-compete agreements that negatively affect workers. According to the FTC Chair, they have received overwhelming support during the comment period to ban non-competes. A ruling is expected this spring.

What Does This Mean for My Club?

The positive impact of this ruling is that non-competes for caddies or companies offering caddie services would become obsolete. Clubs that signed non-compete or non-solicit (which is essentially a non-compete in another form) agreements in the past for their caddie programs have found their hands tied when trying to switch caddie service providers. Why? These agreements essentially tie the club to that caddie provider in perpetuity by restricting them from using the caddies managed by that provider for one year (or more) following the termination of the Club’s caddie service agreement.

It’s typically not in your club’s best interest to sign non-solicit or non-compete agreements affecting your caddie pool. CaddieNow recommends you review your caddie service contracts closely and ensure no party can restrict or impede your ability to manage your caddie program long term.

CaddieNow Can Help

CaddieNow has a decade of experience in understanding the impact of labor law rulings on caddie programs. When CaddieNow partners with a club, the partnership insures the caddies, protects the members, and fully indemnifies the club regarding caddie misclassification, wage and hour, and personal injury issues. CaddieNow puts the proper processes, paperwork, and compliance in place to ensure all parties are protected from a lawsuit related to your caddie program.