Terminating a sportsperson’s contract for private conduct (the Todd Carney case)

by DLA Piper
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On 28 June 2014, a photo was posted on social media of Cronulla Sharks’ Football Club five eighth Todd Carney engaging in a lewd act in a nightclub bathroom. The Cronulla Sharks acted swiftly, organising a teleconference with the Sharks board of directors, and subsequently terminating the remaining 3 years of Carney’s contract (Contract), rumoured to be worth around $650,000 a season. The Cronulla Sharks have stated that their reasoning behind the decision to terminate Carney’s NRL contract was because the photo appearing on social media did not meet the values and standards the club was looking to uphold and take into the future. The Cronulla Sharks CEO also issued a press statement.

While the incident did not occur in any official context with the club, it is established under Australian law that even where an employee’s conduct occurs outside the workplace, that conduct might nonetheless constitute either a breach of an employee’s duty as an employee or a breach of an express term of the employment contract. This update considers the law and the basis for the Cronulla Sharks taking action against Carney in relation to the incident.

Breach of an employee’s duty

The overwhelming majority of sporting contracts impose restrictions on sportspersons’ private conduct. However, even in the absence of an express restriction in a sportsperson’s contract relating to private conduct, the conduct might ground a breach of that sportsperson’s duty as an employee. In order to do so, the private conduct must have a sufficient connection to the sportspersons’ employment.

For the Court to be satisfied that there is a sufficient connection, it will typically consider the following aspects of the conduct:

  • did it call into question the employee’s fitness to perform their duties, or
  • was it capable of harming the reputation or efficient management of the employer’s business or organisation.

In the present scenario, it is arguable that Carney’s private conduct might harm the reputation of the Cronulla Sharks, jeopardise Carney’s ability to be a role model to children in the wider community or damage Carney’s ability to generate advertising revenue for the Cronulla Sharks.

Breach of an employment contract

For the purposes of this analysis, we have assumed that the Contract adopted the standard terms of the 2009 National Rugby League Players’ Contract which regulates private conduct in two ways. Firstly, clause 3.1(l) of the Contract imposes an obligation on the player to act, at all times, in the best interests of the Club and the NRL. Secondly, clause 8.1(b) of the Contract imposes a further obligation on the player to refrain from engaging in misconduct or otherwise acting in a manner inconsistent with the integrity of the Game, or contrary or prejudicial to the best interests, image or welfare of the Club, the NRL or the Game during the employment term.

Carney’s private conduct brings into question whether there was a breach of either clause 3.1(l) or clause 8.1(b). In particular, clause 8.1 (b) entitles the Cronulla Sharks, following a hearing, to take the following options – take no further action against Carney, caution or reprimand Carney, fine Carney, suspend Carney or terminate the Contract with immediate effect. According to the press statement, no hearing occurred. Carney had also been warned twice already this season by the Cronulla Sharks for his off field behaviour. Regardless of this fact, under clause 9.1 of the Contract, the Cronulla Sharks were entitled to release Carney at any time.

Conclusion

This is not the first time in 2014 that a player from the NRL has been in hot water after a misdeed has appeared on social media. In May, an explicit video involving Konrad Hurrell of the New Zealand Warriors was leaked on social media. The Warriors, in conjunction with the NRL Integrity Unit, used its discretion to fine Hurrell $5,000, and ordered him to undergo counselling on the use of social media. The Warriors believed Hurrell to be “full of remorse” over his actions. Another factor was that it was only Hurrell’s first offence. By contrast, Carney’s has been alleged to have brought the game into disrepute on previous occasions. Hurrell was responsible for filming the explicit material himself whereas Carney was not. Blake Ferguson has also had his application by the Sydney Roosters to have him registered rejected by the NRL. In taking a similar tone to Carney, the NRL have stated that the decision was based on an assessment of Ferguson’s record of conduct over the past two years. Factors such as these illustrate the discretion available to clubs and the NRL in their capacity as employers. Of course, it is vital that this discretion is exercised according to the law and the terms of players’ employment contracts.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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