Sonny Bill Williams has created quite a stir in Australia following his decision to walk out at the beginning of a 4 year contract with the Bulldogs.
It has been reported that Sonny Bill has left a $450,000 a year contract with the Bulldogs in favour of a $3,000,000 2 year deal with French Rugby Club, Toulon. The Bulldogs and NRL immediately took action, seeking an injunction from the Supreme Court to prevent Sonny Bill from playing any code for any club while his contract is on foot.
Sonny Bill is just the most recent in a long line of public figures to leave their employment to pursue career opportunities elsewhere, and it is not unusual for an employer in the Bulldogs' position to try and prevent an employee like Sonny Bill from leaving.
Most readers will remember the Super League fights of the 1990s, where the NRL successfully prevented certain players (including John Cross and Jack Elsegood) from leaving to play Super League while Super League failed to force certain players (including Brad Fittler and Matthew Sing) to play for them.
Where the Sonny Bill saga is different is that Sonny Bill has left the country, which may have the effect of frustrating the Bulldogs' efforts in preventing Sonny Bill playing for Toulon. Significantly, Sonny Bill has also threatened to challenge the NRL salary cap on the basis that it constitutes an unreasonable restraint of trade.
Without knowing the terms of Sonny Bill's contract with the Bulldogs, it is impossible to predict what will eventuate, however a number of interesting issues arise.
1. Restraint of Trade
It is likely that Sonny Bill's contract does not allow him to play for any other team, or code, without the consent of the Bulldogs, for the duration of his contract. The injunction being sought by the Bulldogs seeks to restrain Sonny Bill from breaching the terms of his contract.
In deciding whether to grant an injunction, apart from considering whether an injunction should be granted (see below), the courts will need to consider whether the contract is still on foot, whether the contractual terms are valid and enforceable, and if they are whether the terms are void as clauses in restraint of trade. It appears the Bulldogs are currently arguing the contract is still on foot and the terms are valid and enforceable, whereas Sonny Bill is of a different view.
As a matter of principle, the courts are generally willing to enforce restrictions on the activities of an employee during the course of an employment contract, unless the restrictions placed by the employer are unreasonable, or other special circumstances exist. This is especially true where the employee is a footballer or in the public eye. The courts however are less likely, as a matter of principle, to enforce a restraint of trade when an employment contract is not on foot, unless it is reasonable in all the circumstances.
Given Sonny Bill's skills, his importance to the performance of the team, and the investment the Bulldogs have made in Sonny Bill to date, provided the contract is not void and the Bulldogs allow Sonny Bill to play for them (as opposed to another team, or being benched), the Bulldogs have good grounds to argue the court should grant the injunction. There would be difficulties however in enforcing any order of the court for Sonny Bill to perform his contract and play for the Bulldogs.
This appears to be the reason why Sonny Bill is challenging the validity of his contract on the basis of the NRL salary cap.
2. The Salary Cap
It appears from recent media reports that Sonny Bill will attempt to undermine his contract entirely by arguing that the NRL's salary cap system is unlawful and cannot be enforced. If that is right, then the entire contracting regime, including Sonny Bill's own contract, is arguably open to challenge.
The attack is likely to come on two bases:
(i) that the salary cap represents an unreasonable restraint on players' freedom of contracting; or
(ii) that the salary cap falls foul of the anti-competitive conduct the Trade Practices Act (TPA).
The restraint argument may go along the lines that, because the salary cap effectively prevents clubs from paying players their true market value, it unreasonably restrains players from negotiating freely. This is a novel argument.
As for the TPA, the argument may be that the salary cap system is effectively a cartel arrangement between the clubs and the NRL which artificially depresses players' salaries by maintaining a closed shop in the market for players' services. This line of argument looks on the surface more promising, and will find support from some of the conclusions drawn by the Federal Court in the Super League litigation some 12 years ago. If the salary cap is fatally flawed as alleged, then the consequences for the NRL and its competing codes are potentially devastating.
However, this may be a moot point if the injunction sought by the Bulldogs cannot be enforced in France.
3. International Enforceability of the Injunction
Assuming that the court accepts that damages would not be an adequate remedy and that an injunction is appropriate, the court must turn to the question of whether it has jurisdiction to order an injunction restraining Sonny Bill from playing rugby in France. While the case law varies, there is authority to suggest that the courts will order an 'international' injunction where it is necessary to avoid injustice.
If the Supreme Court grants the NRL and Bulldogs' application for an injunction, they will then have to convince the French courts to enforce the injunction.
While Australia and France generally enforce each others' judgments enforcement of the injunction will ultimately be a matter for the discretion of the French courts. The French courts may take the view that enforcing the injunction would be against French public policy as it prevents a person from carrying on their trade.
If Sonny Bill does play rugby in breach of the Australian injunction he would be likely to be held in contempt by the Supreme Court. The remedies for contempt are discretionary and include financial penalties.
4. Is there a better course of action?
The Sonny Bill imbroglio reminds us that sport is big business and that the trade in sports players is no longer restricted by national boundaries or even sports codes.
In recent years other sports have moved to having all disputes in relation to player contracts governed by arbitration. This means that the dispute is submitted to a tribunal with specialist expertise and procedures especially adapted to such disputes, such as the Court of Arbitration for Sport.
Once the tribunal makes a decision the final award can be easily enforced in over 165 nations via an international convention for the Recognition and Enforcement of Arbitral Awards.
Conclusion
The Sonny Bill saga is a clear demonstration of the tensions that underlie sport and big business. The media frenzy that has been sparked by a 22 year old deciding that he wanted to play a different type of rugby on the weekend is a perfect example of this.
The legal issues that have emerged are complex and have wide implications for those players in the NRL considering a move to rugby.
Only time will tell if the NRL's strategy will prevent the loss of Sonny Bill and other NRL players to the "game they play in heaven
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Sydney |
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Michael Bradley |
t (02) 9931 4864 |
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Mark Sant |
t (02) 9931 4744 |
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Damian Sturzaker |
t (02) 9931 4909 |
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Melbourne |
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Antoine Pace |
t (03) 9612 8411 |
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Steven Troeth |
t (03) 9612 8421 |
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Brisbane |
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Michael Owens |
t (07) 3114 0146 |
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Lionel Hogg |
t (07) 3231 1518 |
This publication is provided to clients and correspondents for their information on a complimentary basis. It represents a brief summary of the law applicable as at the date of publication and should not be relied on as a definitive or complete statement of the relevant laws.
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