Is the proposed 10-Year ban on NRL players involved in R360 an enforceable restraint of trade?

There has been considerable media coverage about the proposed new Rugby Union competition ‘R360’, with high-profile National Rugby League (NRL) players among those rumoured to be considering committing to the new competition. To prevent the loss of any of its talent, the Australian Rugby League Commission (ARLC) announced a 10-year ban on any NRL player who commits to R360 (the NRL Ban). This article explores how the legal doctrine of restraint of trade may impact upon the validity of the NRL Ban.

What is R360?

The proposed R360 was targeting an October 2026 commencement date, with a 3-month competition involving franchise-based Rugby Union clubs congregating and playing all games within a global city each round. This format has similarities with the F1 Grand Prix and the current format of the World Rugby Sevens series.

In response to these developments, the governing bodies of Rugby Union in Australia, England, France, Ireland, Italy, New Zealand and South Africa issued a joint statement expressing their concerns with R360 and stating that participation in R360 would render players “ineligible for international selection”.

As referred to above, the ARLC announced its own restrictions in the form of a 10-year ban. The ban applies to “any NRL Player who negotiates, signs, or enters into a Letter of Intent, playing contract, or any other form of agreement… with a football competition, league, or organisation not recognised by the ARLC”.

R360 was due to commence in October 2026 but has now been delayed to 2028.

Enforceability of the NRL Ban

The apparent harshness of the ARLC’s stance, particularly a 10-year restraint duration, has raised questions about whether it is legally enforceability. If R360 kicks off in 2028, it is likely that NRL players affected by the ban may seek to challenge it in court.

A key focus of any such court challenge will likely be whether the NRL Ban amounts to an unenforceable restraint of trade. A restraint of trade exists in this context because the NRL Ban prevents players involved in R360 from returning and playing in the NRL for a substantial period, in turn acting as a restraint on their trade for 10 years. The law^[1] has long held that restraints of trade are void by default because there is a public interest in every person carrying on their trade freely. However, a restraint of trade may be found valid and enforceable if the party seeking to enforce it can demonstrate that:

• the restraint of trade seeks to protect against a clear and present danger to the legitimate interests of party
• the restraint of trade goes no further than is reasonably necessary to protect those legitimate interests.

These principles have been tested in recent times in a rugby league context, with the ARLC successfully defending a claim that it’s ‘No-Fault Stand Down’ policy was an unlawful restraint of trade.

The No-Fault Stand Down policy, introduced in March 2019, allowed the ARLC to stand down a player who had been charged with a ‘serious criminal offence’ on full pay until those charges were determined. When this policy was challenged by an affected player^[2], the Federal Court of Australia found that:

• the ARLC had demonstrated a clear and present danger to its legitimate interests, being the commercial and reputational harm caused by negative publicity and interest generated by a player with serious criminal charges continuing to play throughout the season
• the policy went no further than was reasonably necessary to protect the ALRC’s legitimate interests, because there was no lesser action that could be taken to address the clear and present danger to the ARLC.

The question then turns to whether the ARLC will be able to satisfy these key principles in the case of the NRL Ban. The ARLC has already provided some insight into the rationale for its NRL Ban, which would presumably form the basis upon which it would seek to defend any challenge to its validity. The ARLC’s announcement introducing the NRL Ban stated that R360 is “counterfeiting a code”, “seek(ing) to pirate our game for potential gain” and that the organisations subject to the NRL Ban (namely R360) “don’t invest in pathways or the development of players – they simply exploit the hard work of others, putting players at risk of financial loss while profiting themselves”.

At face value, these arguments may be sufficient to demonstrate that R360 presents a clear and present danger to ARLC’s legitimate interests, but it may be more difficult for the ARLC to demonstrate that the length of the NRL Ban (10 years) goes no further than is reasonably necessary to protect its legitimate interests, particularly where it is far harsher than the restrictions announced by other governing bodies to date, which are limited to the time the player is involved with R360.  

Key takeaway  

While it is unclear whether R360 will ever kick-off, one certainty is that restraints of trade will remain contentious, both within the sporting context and the more traditional professional employer-employee relationship. The concern around employment restraints is reflected in the Albanese government’s proposed reforms to eliminate non-compete clauses, which now appear likely to come in to effect in 2027, for those earning under the high-income threshold of the Fair Work Act 2009.

If you require assistance in relation to a restraint of trade issue or have any questions about this article, please contact us here.   

Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Michael Selinger

Michael Hope

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