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Breakaway European Super League raised “nightmarish” employment law issues
22/04/2021
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Arsenal's Emirates Stadium, London
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John VDLD
John van der Luit-Drummond is editor-in-chief of International Employment Lawyer

As any fan will know, a week can be a long time in football. So perhaps it was unsurprising when, over the space of just two days, the footballing world witnessed the shocking birth and ignominious death of the ill-conceived European Super League (ESL) and, with it, unimaginable billable hours for lawyers practising in the fields of commercial, competition, dispute resolution, intellectual property, and, yes, employment law.

If you had the benefit of living under a rock this past week, here is what happened: last Sunday night six of England’s footballing giants joined leading clubs in Italy and Spain to found the ESL; a “new midweek competition” designed to rival UEFA’s Champions League with teams continuing to “compete in their respective national leagues”.

The move by AC Milan, Arsenal, Atlético de Madrid, Barcelona, Chelsea, Inter Milan, Juventus, Liverpool, Manchester City, Manchester United, Real Madrid, and Tottenham Hotspur was widely criticised by opposition clubs, supporters, former and rival players, sponsors, politicians, and the sport’s governing bodies. In a statement, UEFA, along with the national football associations and leagues of England, Spain, and Italy, condemned the ESL as a “cynical project” founded on the “self-interest of a few clubs”.

In an attempt to stop the ESL before it even began, FIFA and the six Confederations reportedly considered several options, including a ban on the breakaway clubs playing in any other domestic, regional, or world level competition. It was also suggested the ban be extended to those clubs’ players, making the athletes ineligible to represent their countries in international competitions, such as the European Championships, Africa Cup of Nations, or the World Cup.

Alive to this danger, the ESL 12 reportedly commenced their own legal proceedings to protect their position and counter “punitive measures”. Sports lawyers began drawing comparisons between FIFA’s and UEFA’s threats and 2020’s ISU decision, which found the barring of athletes from international competitions was disproportionate and anti-competitive. However, speaking with employment experts this week – and with a healthy dose of hindsight – the ESL may have already been dead on arrival thanks to a collective failure from clubs to attend to legal matters closer to home.

As this week’s events unfolded, it became clear the breakaway clubs had failed to consult some of their largest assets – their multimillion-pound playing and coaching staff – prior to announcing their radical plans. With a finite playing career and aspirations of international success, it should have been conceivable that some players would be disillusioned by the ESL. This raised several interesting employment law questions: if a player spoke out against the deal could they be disciplined or dropped from the team in retaliation? What if a player refuses to play in ESL games or train for them? And, perhaps most importantly, could they get themselves out of their playing contract?

As 11KBW’s Sean Jones QC observed, the Premier League Handbook contains an express obligation for clubs to abide by the rules laid down by the FA, UEFA, and FIFA, and provides a list of competitions a club may enter. Other competitions must be sanctioned by the relevant authority. It stands to reason that the ESL clubs were in breach of these rules and dissatisfied players would have been entitled to terminate their contracts, sue for their balances, and become free agents should they have chosen to.

Generally speaking, sports law takes the view that ‘your laws don’t apply to us’. Then, occasionally, we get a surprise like Bosman

“Players’ contracts are, fundamentally, employment contracts,” said Grahame Anderson of Littleton Chambers. “They contain a clause requiring the parties not to act in a way to damage trust and confidence. If I were a footballer waking up to news that my employer was shifting the entire trajectory of my career, without even discussing it with me, I suspect my lawyer would have something to say about that being a breach of trust and confidence.”

Many player contracts contain provisions concerning playing for the national team and even in relation to Champions League football, added Anderson. “It might be possible to construct an argument that there is an implied obligation on the club to take reasonable steps to ensure it is possible for the player to have a shot at international or UEFA-sanctioned football. This rupture with football’s establishment could well amount to a repudiation of any such term.”

But what about breaches of express terms in a players’ contract? “Some player contracts are expressly pinned to a given league or the broader FA structure,” Anderson explained. “It might be possible for a player to say that it was an express term of the contract that they be given the opportunity to play FA-sanctioned football and to aim for the Premier League title.

“Moreover, most football contracts contain specific provisions about bonuses for, say, a goal in the Premier League or Champions League. Moving out of those leagues makes those clauses redundant and would, in all likelihood, amount to some form of anticipatory breach of those obligations.”

“Football contracts are very weird, they are not like normal employment contracts,” a leading sports lawyer told IEL. “For a start, mammoth restraints of trade are commonplace in football contracts; so are terms that seek to exclude the jurisdiction of the employment tribunal, despite the fact that is unlawful in the UK. Generally speaking, sports law takes the view that ‘your laws don’t apply to us’. Then, occasionally, we get a surprise like Bosman.”

The resolution of contractual disputes are usually resolved through arbitration regulated directly or indirectly by the sport’s governing bodies. But what would have happened if, as in this scenario, clubs are in conflict with those same organisations? “It could have been very interesting because, if the Premier League now hate you, and FIFA hate you, too, then that is not the strongest of positions for a club to be in from an employer perspective,” said one employment lawyer.

If those were the concerns of UK-based lawyers, what of those elsewhere in Europe? “The exclusion of the Super League’s clubs from the traditional competitions could have led to these clubs being removed from the applicable collective bargaining agreement,” said Rubén Agote, a partner at Cuatrecasas in Spain.

“Spanish football’s collective bargaining agreement was negotiated and agreed by the football players’ trade union and LaLiga, and it provides that the agreement regulates the labour conditions of the football players providing services to clubs adhered to LaLiga. Consequently, the exclusion of these clubs from LaLiga could automatically mean that they could leave the collective bargaining agreement.”

As with the English clubs, Agote highlights that a ban from domestic and international competitions, along with redundant bonus conditions – such as those awarded for appearances, clean sheets, or title achievements in certain competitions – would likely entitle players at Atlético de Madrid, Barcelona, and Real Madrid to terminate their contracts.

“The players’ reduced remuneration should be interpreted jointly with the revenue increase announced by the Super League clubs, which will not likely help to keep a peaceful environment in the affected clubs, as most players would witness a decrease in their full remuneration and simultaneously an increase in the club’s revenues,” said Ruben.

A player banned from international competitions will never renew their work visa... That seems a fatal problem

Although player contracts are the most obvious employment issue to focus on, the ESL’s creation could have had other wide-reaching consequences for club employees across Europe, thanks to the potential reduction in revenue and of competitions teams could participate in.

“Clubs not participating in the new Super League could have been affected by a tremendous reduction of incomes based on television rights, [which] will be focused on the new more attractive league, and may eventually take drastic action to face the loss, cutting the costs and the job positions of supporting staff,” said Emanuela Nespoli, a partner at Toffoletto De Luca Tamajo e Soci in Italy.

“On the other hand, the clubs participating in the new league could have had a reduction in the activity of the supporting staff considering the numbers of events and competitions will also decrease for them. Consequently, both [the corporate side] and the football team of those clubs may consider redundancies and full reorganisations following the creation of the new super league.”

Away from employment disputes, there are also issues around global mobility. Footballers plying their trade outside the EU require a work permit to play for European clubs, subject to the relevant national immigration law. To obtain a tier two or tier five visa in the UK, for example, a player must have competed in a percentage of their country’s senior international matches, based on their nation’s FIFA ranking, within a two-year period.

“A player banned from international competitions will never renew their work visa,” said one senior sports lawyer. “And, even if UEFA didn’t introduce a transfer ban on ESL clubs, to actually import a player requires a work visa and you won’t get one of those if players are banned from internationals. That seems a fatal problem and you could have ended up with the English sides having only British players. They wouldn’t even have had the benefit of freedom of movement within Europe, as the Italian and Spanish clubs would, to trade players.”

A change in immigration laws would, therefore, be required to assist ESL clubs, but that was wishful thinking after UK Prime Minister Boris Johnson said his government would use “a legislative bomb” to stop English clubs joining the ESL. “Whatever way you look at it, this is causing nightmarish problems from an employment law perspective, particularly for English clubs,” a UK employment lawyer told IEL.

In any event, the ESL’s house of cards crumbled on Tuesday evening. Online opposition to the plans from across the supporter spectrum and a large fan protest outside of Chelsea’s Stamford Bridge stadium demonstrated that the rebel English clubs had made a serious miscalculation. More importantly, however, influential players and head coaches at those clubs began voicing their discontent on social media and in the press. Within a matter of hours on Tuesday night, Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, and Tottenham Hotspur all announced their withdrawal from the ESL. On Wednesday morning, Atlético Madrid, AC Milan, and Inter Milan followed suit.

Is this the end of the story? Perhaps not. As one employment lawyer explained: “If committing to the ESL and putting international careers at risk amounts to a breach of the trust and confidence term then a wantaway player might still claim their contract had been repudiated even though the club had a change of heart and the risk never realised.”

So, what can employers broadly take from this story? Politics and fans’ fury aside, the ESL 12 had the financial backing to pay for the best legal representation available, so it seems unlikely they would have skimped on employment law advice; if they chose to downplay concerns from their lawyers, then they only have themselves to blame for this debacle. And while we may never know how contractual disputes would have eventually played out, the impact of player power on this story should not be minimised. Perhaps the lesson here is not to underestimate your most valuable assets – your employees.