26 Mar 2009
Restraining the Bulldog: Bulldogs Rugby League Club Ltd v Williams
by Joe Catanzariti, Stephen Gavin
Injunctions to restrain an employee from breaching a restraint of trade clause require the court to be satisfied of three things.
On 26 July 2008, Sonny Bill Williams, a star rugby league player, walked out on his club, the Bulldogs Rugby League Club, to play rugby union in France. Williams had agreed to play for the Bulldogs until at least the end of the 2012 season.
The Bulldogs and the National Rugby League brought an urgent court application seeking an order stopping Sonny Bill Williams from leaving his contract (Bulldogs Rugby League Club Ltd v Williams  NSWSC 822). The Bulldogs and NRL argued that Williams was breaching a restraint of trade clause in his employment contract.
Was Williams subject to the NSW Supreme Court's jurisdiction?
Before the Court could order Williams not to play for the French Rugby Club, the Bulldogs and the NRL had to prove that Williams was subject to its jurisdiction. They did this by seeking:
- orders that the summons, a notice of motion and affidavits be taken to have been served on Williams; and
- an order for leave permitting the plaintiffs to proceed against Williams in his absence.
It was held that Williams had been properly served. The process server gave evidence that he attended the training ground of the Toulon Rugby Club where the team was training, and threw the documents on the ground in the direction of the plaintiff. A trainer then picked them up and said "Williams, c'est pour toi".
Orders were also granted to proceed against Williams in his absence.
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. In determining whether to grant the injunction, the court considered 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?
Relevant to the question of whether there was a serious question to be tried was whether the restraint of trade clauses in employment contracts were enforceable.
Restraint of trade clauses in employment contracts are generally unenforceable except to the extent they protect the legitimate business interests of the employer. 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. In determining whether the restraint was enforceable, Justice Austin considered several determinative factors.
First, the restraint operated to prevent Williams from playing for another club while he was employed with the Bulldogs, not after his contract had ended. Justice Austin held that the restraint, which in effect meant that while in the Bulldogs' employ, Williams could not work for anyone else, was not unreasonable.
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.
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. This was because recruitment at the Bulldogs was based on complementing his particular skills, no players were adequate substitutes for him, and he was a star attraction. As such, his departure would result in significant loss of marketing and ticketing revenue for the Bulldogs.
Balance of convenience
The final consideration in awarding the injunction was whether the balance of convenience weighed in favour of granting the relief. In considering this question, Justice Austin considered the Bulldogs' willingness to continue to pay Williams and the fact that any potential hardship caused to him 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.
The Bulldogs were successful in obtaining an injunction against Sonny Bill Williams and the case eventually settled. Nevertheless, there are five important noteworthy aspects of the case:
- Sonny Bill Williams had assets in the jurisdiction to which a court order could attach
- the restraint clause operated during the life of Williams' employment contract, not after
- 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
- the "star quality" of Sonny Bill Williams meant that his departure would cause significant and irreparable harm to the Bulldogs, for which damages would not be an adequate remedy; and
- finally, the Bulldogs maintained the contract on foot. The club kept paying him, and 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.
This article was written when Joe was a partner at Clayton Utz and does not necessarily reflect his views as Vice-President of the Fair Work Commission.