By Rebekah O’Sullivan and Matt Burgess, Director.
On 26 July 2008, Sonny Bill Williams, rugby player, walked out on his club, the Canterbury Bulldogs Rugby League Club (Bulldogs), to play rugby union for the French club, Toulon. His contract with the Bulldogs was due to expire at the end of the 2012 season.
The Bulldogs and the National Rugby League (NRL) brought an urgent injunction against Sonny Bill Williams to stop him from breaching the restraint of trade clause in his employment contract with the Bulldogs. The Bulldogs and NRL also sought an interlocutory injunction restraining Williams from participating in any other football matches of any code without the consent of the Bulldogs. The Bulldogs were successful in obtaining an injunction against Sonny Bill Williams and the case eventually settled.
Williams’ contract with the Bulldogs was due to expire in 2012. The injunction from playing brought by the Bulldogs and the NRL will not affect his ability to play for the Roosters in 2013 as the restraint clause operated during the life of Williams’ employment contract, not after. As of 2013, the restraint clause preventing Williams from playing is null and void.
After a five year hiatus from rugby league and being a pivotal player for both the All Black and Super Rugby-leading Chiefs, Williams is now considering, and is said to have made a handshake deal, to return to rugby league to play for the Roosters in 2013. New Zealand Rugby is understandably sad to be losing one of its world class players but they have left the door open for his possible return.
The Law Involved
Injunctions can be sought to restrain a player employed by their club from breach a ‘restraint of trade clause.’ In determining whether to grant an injunction, the court considers three questions:
• Was there a serious question to be tried?
• Would the Bulldogs suffer irreparable harm for which damages would not be an adequate remedy?
• Did the balance of convenience weigh in the favour of granting the relief?
Restraint of trade clauses are generally unenforceable in employment contract except to the extent they protect the ‘legitimate business interests of the employer.’ In determining whether the restraint was enforceable, Justice Austin considered several determinative factors.
First, the restraint clause was to prevent Williams from playing for any other club for the life of his employment contract with the Bulldogs, not after his contract ended. Justice Austin found that this was not an unreasonable request by the Bulldogs. It was important that the contract had been kept on foot by the Bulldogs, ie. the club kept paying him his salary, and thus the restraint clause was still operative. The team and its coaches did not act in a manner which indicated acceptance of his repudiatory conduct, ie. by stating publicly that they would never play with him again. This meant that the contract, and its restraint, were still enforceable.
Second, although courts will not generally force employees to work for specific employers (ie. the courts will not force someone into “slavery”), where employees have made promises in their contracts not to work for other employers, the courts will enforce that promise by way of injunction, eg. Buckenara v Hawthorn Football Club  VR 39. Because star rugby league players, as with entertainers, perform work under “special services” contracts, courts are more likely to restrain them from breaching negative covenants in their contracts not to perform special services for other employers
It was held that the loss of Williams’ services would lead to irreparable harm to the Bulldogs for which damages would not be an adequate remedy. The Bulldogs argued convincingly that Williams was a star attraction and that it was impossible to recruit an adequate substitute. As such, his departure would result in significant loss of marketing and ticketing revenue for the Bulldogs and damages would not be an adequate remedy.
Balance of convenience
Justice Austin weighed the balance of convenience in favour of granting the relief to the Bulldogs and NRL. In considering this question, Justice Austin considered the Bulldogs’ willingness to continue to pay Williams and the fact that any potential hardship caused to Williams if the injunction was granted was a result of his own conduct. He also applied the principles from Humane Society International Inc v Kyodo Senpaku Kaisha Limited (2005) 232 ALR 478, an important case which concerned the granting of an injunction against a defendant who is overseas.
The injunction was awarded despite the fact that Williams would be likely to ignore the injunction, and play rugby in France anyway. It was relevant that Williams still owned a house in Sydney, which could be sequestered in the event that he breached the injunction and was in contempt of court.
There are mixed feelings about his ability to return to the game of League but Roosters Coach Brian Smith confidently stated, “In some ways, it could work in his favour, he’ll come back with more strings in his bow than before because of his experiences. Being part of the All Blacks program for that long and we’re talking a high-quality sporting program that is the envy of many other organisations. I would have thought it would help his development. I don’t watch rugby regularly, but I’m in contact with guys involved in that sport and they’ve raved about what he has been able to generate.’
The cross-code players are a serious concern for the NRL as they are leaving that sport for the AFL and Rugby, which provide far higher pay packets than a current NRL employment contract. The fact Sonny Bill Willams is returning is a coo for the NRL, but a coo celebrated cautiously. As Brian Smith stated, for the Roosters the skills learned by Williams in Rugby will be an advantage but the wounds are still fresh caused by Williams in 2008 and a gaping hole in the law protecting the sanctity of players to their clubs.
This blog is for discussion purposes only. This must not be considered legal advice.
For legal advice on this topic and references to any information in this article, please contact
Matt Burgess, Director:
Phone: +61 405 722 739
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