Last month, my colleague Rosie Duckworth wrote a great blog about the Denny Solomona situation following his ‘retirement’ from rugby league to pick up a contract with rugby union side, Sale Sharks. Rosie referenced another brewing situation and now the Johan Goosen story is simmering towards boiling point.
Goosen is/was a South African international rugby union player who played domestically for Racing 92 in the top French league (Top 14). Racing 92 are the current champions of the Top 14, were the beaten finalists in last year’s European Rugby Champions Cup and boast a certain Mr Dan Carter among their squad. A pretty serious outfit!
Goosen himself is/was a well-regarded player, having earned the prize of best player in the Top 14 last year and winning 13 Springbok caps with 3 tries, most recently in the 2016 November internationals.
However last month at the age of 24, Goosen suddenly retired from rugby, reportedly to take up a Commercial Director role in South Africa.
Racing 92 were rather upset and this week released a strong statement making clear that they are taking legal action. Racing 92 allege breach of contract (similarly to the Solomona case), giving particular reference to the apparently generous wage packet and 4-year term of Goosen’s contract. The club effectively argue that Goosen is still their employee, although the coach has separately suggested that Goosen has no future there. Racing’s statement even suggests the possibility of criminal proceedings arising from the contractual documentation.
This is another strand of the “retirement loophole” issue that Rosie discussed. The main factual difference is that Goosen is purportedly retiring from sport entirely to take up a non-professional sporting role, whereas Solomona was leaving rugby league to take up rugby union. Could this lead to a different result? The waters may be muddied by rumours that Goosen is in fact planning to sign for English Premiership side Gloucester therefore retiring from rugby union to play, well, rugby union!
Out of the sporting context, this issue can be a little counter-intuitive for an employment lawyer. In most employment scenarios, employment is a legal relationship terminable by either employer or employee on notice. Even most fixed term employment contracts will allow either party to end the employment early upon the giving of notice.
However, there is no rule or law that requires a fixed-term employment relationship to be capable of ending upon interim notice. The sporting world in particular uses such contracts without notice provisions in order to lock in players and staff for defined periods of time, thereby avoiding important people disappearing during a season and the potential sporting and financial implications of that. But what if they quit nonetheless like Goosen? It may be a breach of contract but where does that get the employer?
One of the major issues for an employer in Racing’s position (in the UK at least) would be having to prove the financial loss flowing from the alleged breach by a player in leaving early. This may not necessarily be easy (can such losses be quantified with any certainty?) and any such losses would need to be offset by the saving of the individual’s salary. For a well-paid player, this may not leave much on the top!
If damages will not work, what about an injunction to compel the employee to remain with the employer? Can an injunction force the player back to play? Here the problem is that while you can force the individual to respect the existence of a contract with the employer, you cannot oblige them to turn up and work/play.
These are not new issues in some sports and certain other methods have been used to deter the sportsperson from leaving their contract early. For example, liquidated damages clauses are used quite widely in football. In short, a contract will provide that the player or manager will need to pay a certain amount of money should they look to leave their contract early, such amount probably reducing pro-rata during the period of the contract.
Even if an individual refuses to pay the relevant amount, a breach of contract claim based on liquidated damages will reduce the issue with proving loss, as the amount will be clearly set out in the contract. Rather, the potential problem with liquidated damages clauses is to make sure they are not too onerous or unreasonable, as a Court may not then enforce them.
As Rosie said, this issue is going to be one to watch. Rugby union is still relatively new to professionalism and levels of cash in the sport are increasing all the time. Will this be the catalyst towards rugby clubs looking towards football for ideas on how to best protect their star assets? Will ‘retirements’ be more regulated?