Restraint Of Trade, Competition Law And The Transfer Window: A Level Playing Field?

The January transfer window has once again brought allegations that a Premier League club has made an 'illegal approach' to sign a player without involving his current club. This puts the issue of restraint of trade and the FA transfer rules under scrutiny yet again. The differences between the FA rules and the FIFA rules on transfers effectively mean that a player for an English club who wants to move to another English club is at a disadvantage against his overseas counterparts due to having substantially less time to negotiate a new contract. There are recurring questions that arise: do the FA rules on transfers constitute a restraint of trade? Are English clubs disadvantaged in a manner prohibited by competition law?

Restraint of Trade

Football players are employees and are therefore covered by the normal rules of employment law, both at common law and under employment legislation. Under the doctrine of restraint of trade, any contractual term which purports to restrict an individual's freedom to work for others or carry out his trade or business is void and unenforceable, unless the employer can show that it has a legitimate proprietary interest that requires protection and the protection sought is no more than is reasonable.

Football Association Rules

Section C1 of the FA rules (and Section T of the Premier League Rules) prevents a player who is under contract, or his agent, from talking to other clubs, or being approached by other clubs, without the consent of the player's current club. This can be a problem for players in the final year of their contracts who wish to move clubs when their contract expires.

Subject to limited exceptions, players' contracts, regardless of duration, must end on 30 June in a given year. FA rules state that within 7 days of the first Saturday in May (or the last game of the season) a club must either offer its player a new contract or confirm it is releasing him. If the club releases the player, he is free from that moment to negotiate directly with another club. If the player is offered an extension, he must confirm within 28 days whether this offer is accepted or rejected. Again, from the moment an offer is rejected, the player is free to negotiate with other clubs.

Crucially, the above rules apply only to negotiations with English clubs. A player is free to negotiate directly with foreign clubs, including those in the EU, up to 6 months before the expiry of his contract.

FIFA Rules

FA and Premier...