The Olivier Bernard case: how, if at all, to fix compensation for training young players?

• Author: Weatherill, Stephen
• Position: ARTICLES

1 Introduction

The list of sports-related judgments in EU law was extended in March 2010. The decision of the Court of Justice of the European Union (CJEU - as it has been known since the entry into force of the Lisbon Treaty) in Olympique Lyonnais v Olivier Bernard and Newcastle United (1) deals with payment of compensation in circumstances where a club that has invested in training young players finds that an emerging star wishes to try his luck elsewhere. Against the background of the EU Treaty provisions governing free movement of workers the Court confirms that such restrictions on player mobility may be compatible with EU law - but the particular French rules challenged by Bernard are not. The judgment therefore accepts that sport is 'special', for such arrangements for compensating training would not be found in normal industries, while it uses EU law to confine the space allowed to sporting bodies in shaping their preferred system. But plenty of open questions bedevil identification of precisely what measure of compensation is allowed under EU law, and there may yet emerge frictions between the demands of EU law and the international transfer system painstakingly renovated by football's governing bodies in recent years. The judgment in Bernard is also notable as the first occasion on which the Court has made reference to the new provisions on sport introduced by the Treaty of Lisbon with effect from 1 December 2009. The judgment suggests that Lisbon will not be used by the Court as a basis to adjust its long-standing approach to the subjection of sport to the legal rules of the internal market.

2 The litigation: the road to Luxembourg

At the material time Olivier Bernard was a 'joueur espoir' at Olympique Lyonnais, one of the strongest clubs in French football. The category of 'joueur espoir' covers players between the ages of 16 and 22 who are employed as trainees under a fixed-term contract - one lasting three years in Bernard's case. Before the expiry of that contract Olympique Lyonnais offered him a professional contract lasting one year, but Bernard rejected the offer and instead chose to sign a professional contract with Newcastle United, at the time a leading English club.

The problem was that Bernard's actions did not conform to the charte du football professionnel ('the Charter') which at the time governed the employment of football players in France. The Charter required a 'joueur espoir' to sign his first professional contract with the club that had trained him, if the club so wished. The Charter did not provide for the payment of compensation in the event that the player refused, but it did envisage that the club which had provided the training could bring an action for damages against the 'joueur espoir' under the French code du travail for breach of the contractual obligations rooted in the Charter. This is precisely what Olympique Lyonnais did, and a tribunal in Lyon, finding a unilateral breach of contract contrary to the Charter, ordered Bernard and Newcastle United jointly to pay damages of EUR 22 867.35.

The Cour d'appel in Lyon quashed that judgment, finding that the scheme, which restricted the player's contractual freedom once his training was complete, infringed Article 39 EC, which governs the free movement of workers between Member States of the EU. After all an award of damages in such circumstances, as foreseen by the Charter, plainly serves to discourage a player from exercising his right of free movement. Olympique Lyonnais appealed against that decision. The French Cour de Cassation made a preliminary reference to Luxembourg in July 2008 - by which time Bernard's espoirs were all but exhausted as his modestly distinguished professional career limped to a close. It asked whether the Treaty, specifically the provi sion governing free movement of workers, caught the matter at hand - which it rather obviously did. And, referring to another instance of journeyman footballer turned legal milestone, the famous Bosman ruling (2), it also asked whether 'the need to encourage the recruitment and training of young professional players constitute a legitimate objective or an overriding reason in the general interest capable of justifying' the French scheme - a much more tricky question.

3 The ruling of the CJEU

The CJEU quickly placed its ruling in the mainstream of its sports law jurisprudence. Sport, it reminded us, 'is subject to European Union law in so far as it constitutes an economic activity'. It duly cited both Bosman and the more recent anti-doping case, Meca-Medina and Majcen v Commission. (3) In fact, the Court makes a subtle adjustment here: whereas in Bosman and Meca-Medina it had referred to an economic activity within the meaning of Article 2 of the EC Treaty (4), in paragraph 27 of Bernard mention of Article 2 has been deleted - probably because even though the litigation pre-dates the entry into force of the Lisbon Treaty, the ruling does not, and Article 2 EC has been deleted by the Lisbon reforms with effect from 1 December 2009. This is probably merely presentationally important, rather than signalling any change of substance.

Bernard's employment falls within the scope of the Treaty - and the Court, again updating its analysis to take account of the entry into force of the Lisbon Treaty on 1 December 2009, proceeds to consider Article 45 TFEU, the successor to Article 39 EC. That provision controls not only the actions of public authorities but also rules of any other nature aimed at regulating employment in a collective manner, and accordingly the French Charter which had detrimentally affected Bernard fell to be tested against the requirements of Article 45 TFEU, just as the international transfer rules had been subjected to testing in Bosman itself. And, as the Cour de Cassation had correctly recognised, the Charter tended to discourage the exercise of a player's right of free movement by according a protected advantage to the club providing training.

The enduringly important core of the judgment tackles the question whether the French scheme governing 'joueurs espoir' is justified, despite its restrictive effect on labour mobility within the EU. The Court once again cites Bosman in declaring that:

'A measure which constitutes an obstacle to freedom of movement for workers can be accepted only if it pursues a legitimate aim compatible with the Treaty and is justified by overriding reasons in the public interest. Even if that were so, application of that measure would still have to be such as to ensure achievement of the objective in question and not go beyond what is necessary for that purpose ...' (5)

This is in fact an orthodox statement of general EU trade law. As Advocate General Sharpston...