In the wake of Justin Thomas uttering a homophobic slur after missing a putt at the Sentry Tournament of Champions in Hawaii on Jan. 9, Ralph Lauren announced on Friday that it had “discontinued” its sponsorship relationship with the 27-year-old golfer.
The remark by Thomas, winner of the 2017 PGA Championship and the world’s number one ranked golfer as recently as 2018, was caught by an on-course microphone. He repeatedly apologized afterwards and acknowledged his utterance was “terrible” and “inexcusable”. Thomas insisted the word didn’t reflect his values and was a momentary lapse in judgment.
Ralph Lauren, a publicly traded fashion company headquartered in New York City, wasn’t assuaged. The company explained its decision by citing “the responsibility we have to all of our stakeholders”. Ralph Lauren suggested it might resume its relationship with Thomas should he “do the hard and necessary work” by “truly examining this incident, learning, growing and ultimately using his platform to promote inclusion.”
Ralph Lauren markets a variety of golf apparel products bearing Thomas’s name. They include caps and shirts. “Justin Thomas”, company CEO Patrice Louvet was quoted as saying in 2018, “is a terrific individual, and I think he embodies the values of the brand very well.”
The recent remark by Thomas, who starred at the University of Alabama before turning pro in 2013, clearly runs counter to Ralph Lauren’s marketing efforts. In May 2019, the company launched a “pride collection and dedicated campaign that celebrates the LGBTQIA+ community.” The campaign raises awareness for “individuality and inclusion” and highlights “experiences with life, love and self-expression”. The campaign features Olympic medalist Gus Kenworthy, ballet dancer Harper Williams, actress Josie Totah and others.
While Ralph Lauren’s contract with Thomas isn’t publicly available, it likely contains a “morals clause” or similar passage that furnishes Ralph Lauren with wide discretion to discontinue the contract. When invoked, such a clause authorizes the company to suspend or terminate payment obligations.
To illustrate a morals clause from another athlete’s endorsement contract, the sponsoring athlete must “act at all times with due regard to public morals and conventions,” avoid behavior that “brings the athlete or company into public disrepute” and refrain from “insulting or offending the community”—with “community” normally defined by the company and related to its customer base and investor class.
Thomas isn’t the first athlete to lose an endorsement deal on account of a homophobic slur. In 2010, Jaguar terminated its contract with Australian Olympic gold medalist swimmer Stephanie Rice after she tweeted the same word used by Thomas on the golf course. Like with Thomas, an apology by Rice failed to remedy the situation.
Thomas didn’t break any laws, but law-abidingness isn’t the applicable test. Impact on a company’s brand is the key factor. Along those lines, Thomas’s First Amendment right is irrelevant as it relates to Ralph Lauren’s decision. The First Amendment protects Americans from governmental prosecution of their speech—it doesn’t bar private employers from severing contractual ties over speech. Likewise, even though Thomas had avoided public controversy until now, a one-time, spontaneous mistake can be enough.
In most cases, athletes decline to legally challenge sponsors from exercising morals clauses. Tiger Woods, for example, lost endorsement deals with Accenture, AT&T, Gatorade and Tag Heuer after his marital infidelity sparked a high-profile scandal. One notable exception was Pittsburgh Steelers running back Rashard Mendenhall. He lost a contract with Hanesbrands after tweeting unpopular viewpoints about the death of Osama Bin Laden. Among other remarks, Mendenhall opined, “It’s amazing how people can HATE a man they have never even heard speak. We’ve only heard one side . . . .” Mendenhall sued, arguing in part that Hanesbrands knew and accepted that he tweeted controversial statements. The case was settled out of court.
Thomas, who reportedly earned $23 million in endorsements in 2019 (versus $3 million from tournament winnings), also has endorsement deals with Titleist, FootJoy and several other major brands. It remains to be seen if they sever ties or if they conclude the controversy isn’t impactful enough on their brands to let the talented golfer go.