"No-poach" agreements - What can sports learn from Portuguese & Mexican football, US Major Leagues and UFC?

Friday, 11 October 2024 Author: Emmanuel Goriola, Sam Parry

In 2020, 31 Portuguese football clubs across the first and second divisions of Portuguese football (and the Portuguese football league itself) entered into an agreement that prevented clubs from signing players who had unilaterally club terminated their contracts and left their previous club due to salary cuts and delayed payments arising from Covid-19. These types of arrangements (known as “no-poach” agreements) raise interesting competition law questions, particularly at a time when competition law agencies globally have increased their focus on labour market agreements which limit employee mobility, including in the sports sector. The agreement reached by the Portuguese football clubs has been challenged on competition law grounds and the case has now reached the Court of Justice of the European Union (CJEU), who has been called upon to address several questions on how EU competition law applies to the arrangement.

While the CJEU's ruling on these matters is still pending, this article offers some preliminary insights into how the agreement in question might be assessed under competition law. It does so by considering the non-binding policy brief of the European Commission (EC) on no-poach agreements^[1] as well as the legal framework for sporting rules coming out of the recent European Super League ^{^[2]} and International Skating Union^{^[3]} cases. In the subsequent paragraphs, this article draws on an interesting range of examples from other similar cases across various sports and jurisdictions, including Major League Baseball (MLB), the National Football League (NFL), the National Collegiate Athletics Association (NCAA) and Mexican and European football (some of which were permitted, others of which were unlawful). It then explains the key points that leagues and sports teams need to be aware of when considering such arrangements.

Facts of the Portuguese football league case
No-poach agreements
The AdC's decision
The clubs' appeal to the CJEU
How EU competition law applies to "rules of sporting interest"
Arrangements between sports teams that have fallen foul of competition law
Proportionate arrangements that have been permitted
Lessons for clubs and associations

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