In an interesting turn of events earlier this year, Jack Nicklaus was sued by Nicklaus Companies.
Originally reported by Sports Illustrated, the complaint alleged tortious interference, breach of contract and breach of fiduciary duty while claiming Nicklaus was paid $145 million in 2007 to provide exclusive services and property to the Nicklaus Companies.
The suit accused the 18-time major champion of working directly against the company and said Nicklaus had failed to deliver on the terms of the deal struck 15 years ago.
One breach of contract mentioned in the suit was Nicklaus’ negotiations with the Saudi Arabia Public Investment Fund and the $100 million offer from LIV Golf to be its CEO.
An offer Nicklaus declined.
However, a New York Supreme Court judge, Justice Joel M. Cohen, weighed in this week with the following ruling until these matters are resolved at a full trial, possibly in 2023 (the calendar hasn’t been set yet):
… it is ORDERED that Plaintiff Nicklaus Companies, LLC’s (“Company”) motion for a preliminary injunction is GRANTED solely to the extent that during the pendency of this action, and subject to further order of the Court, Defendants GBI Investors, Inc. (“GBI”) and Jack W. Nicklaus (“Mr. Nicklaus”) along with their officers, directors, agents, shareholders, successors, employees, representatives, heirs, attorneys, and all other persons who are in active concert or participation with any of them, are enjoined from: (i) using or authorizing the use of Transferred Intellectual Property as defined in Section 4.10(a) of the Purchase and Sale Agreement (“PSA” [NSYCEF 113]), including Schedule 4.10(a) thereto, without the Company’s prior written
consent; and (ii) licensing Mr. Nicklaus’s name, image, and likeness for commercial endorsements without the Company’s prior written consent; provided, however, that nothing in this paragraph shall restrain Defendants from using or authorizing the use of Mr. Nicklaus’s name, image, and likeness to identify Mr. Nicklaus as a professional golfer, or for other personal, investment, and charitable purposes;it is further ORDERED that Plaintiff’s motion for a preliminary injunction is otherwise DENIED, including but not limited to the extent that it sought to enforce against Defendants any noncompete and non-solicitation provisions contained in the PSA, the Amended and Restated Limited Liability Company Agreement (NYSCEF 114) and Non-Competition Agreement (NYSCEF 115); for the avoidance of doubt, Defendants are free from contractual restrictions on competition and solicitation with respect to the Company other than the restrictions contained in the immediately preceding paragraph of this Order …
This means Nicklaus could, potentially, compete with his former home, Nicklaus Companies, for design work and other business — except commercial endorsements.
The name of Nicklaus’ new venture is 1-JN, LLC, a business co-owned by his wife, Barbara.
“It has been more than 50 years since my first course, but I am even more passionate than ever about golf course design,” Nicklaus said in a statement. “I strongly believe that my ideas and creativity are even better now than they have ever been, and I am inspired to continue producing memorable and sustainable golf experiences that can be enjoyed for years to come.
“You might say I have nothing to prove,” Nicklaus added, “but I have a lot left to give.”
A statement from the Nicklaus Companies indicated this is simply part of the legal process and precludes a trial in 2023.
“According to the court’s order, the injunction extends to all ‘officers, directors, agents, shareholders, successors, employees, representatives, heirs, attorneys, and all other persons who are in active concert or participation’ with Mr. Nicklaus or GBI Investors. This would include golf course developers, commercial sponsors, and any other entity who would look to exploit Mr. Nicklaus’ name, image or likeness, or any of the company’s intellectual property—including its “JACK NICKLAUS” trademarks—for commercial gain,” the statement said.
“It is also important to understand that while the court declined to issue a preliminary injunction as to whether Mr. Nicklaus can compete with Nicklaus Companies in designing golf courses, this is only pending a full trial to determine whether or not he has that right. Plus, any such design work would be subject to the court’s limitations on any use of the Nicklaus Companies’ intellectual property — or any use of Mr. Nickalus’ name, image and likeness — to endorse the golf course.
“All of these issues have yet to be litigated in full, and after hearing the evidence at trial, we will learn the final decision of the court.
“As we have said all along, our goal was to have the court sort out the legal responsibilities of the parties so that there is no confusion or misunderstanding going forward. The court’s injunction is a step in that direction.
“We still hope for a collaborative and amicable resolution to these matters. Despite the disparaging statements orchestrated by Mr. Nicklaus’ attorneys against Nicklaus Companies and Jack’s business partner, we continue to have great admiration for Jack and his accomplishments, and will use our rights to his name, image and likeness to keep his legend alive. We will do everything we can to ensure his legacy lives on for generations to come.”
(Editor’s note: This story has been updated to include a comment from the Nicklaus Companies, to include the judge’s ruling, and to clarify the status of the case.)
