The 2015 MLS CBA, Bosman, and how European Law Affects Free Agency in American Soccer

Major League Soccer and the MLS Players Association are on the precipice of a break down in Collective Bargaining Agreement negotiations. One of the major sticking points in the negotiation is the issue of free agency in Major League Soccer. Soccer in the European Union faced similar restrictions over movement of players after the expiration of their contract, which was resolved in the Bosman ruling two decades ago. Through CAS Jurisprudence, the decision in Bosman may render the free agency debate in Major League Soccer moot.

The Bosman Ruling:

In the landmark Bosman ruling, the European Court of Justice held that that rules requiring a payment of a negotiated transfer fee for the transfer of a player after the expiration of his employment agreement was an illegal restriction on a Player’s fundamental right to freedom of movement. [1] Specifically, the ECJ found that said rules “are likely to restrict the freedom of movement of players who wish to pursue their activity in another Member State by preventing or deterring them from leaving the clubs to which they belong even after the expiry of their contracts of employment with those clubs. “[2]

Additionally the court held that “since [the rules] provide that a professional footballer may not pursue his activity with a new club established in another Member State unless it has paid his former club a transfer fee agreed upon between the two clubs or determined in accordance with the regulations of the sporting associations, the . . . rules constitute an obstacle to freedom of movement for workers.”[3] The Court also found that even if the restriction involved movement within a single member state, it would still constitute an illegal restriction on free movement.[4]

As a result, no European club, or national association, can require the payment of a negotiated fee for, or create any other bar against, a player moving to a new club upon the expiry of his employment contract. This thus establishes free agency for all European sports.

The Peñarol Decision

The Principle of free movement was then applied by CAS to cases involving players and club outside of the EU in Club Atlético Peñarol v. Suarez et al.[5] While not citing directly to Bosman, the CAS panel in Peñarol ruled that because FIFA and CAS are entities governed by Article 187 of the Swiss Public International Law Act (the “PILA”), they are required to seek guidance from Swiss public policy.[6] Specifically, the Panel in Peñarol observed that while a choice of law determines the applicable laws, Article 187 states that organizations incorporated under Swiss law cannot preempt Swiss legal norms if said preemption would contravene Swiss public policy, or violate a fundamental right under Swiss Law.[7]

Peñarol thus holds that CAS and the FIFA DRC are bound by basic human rights as recognized by Swiss Law and Public Policy.

Effects of Bosman and Peñarol

Switzerland and the European Union signed the Agreement on the Free Movement of Persons, which became effective on 1 June 2002.[8] That agreement, states that both Switzerland and the European Union Member states recognize the “right of free movement.”[9] This agreement occurred after Bosman.[10] Therefore, the panel in Peñarol essentially found that the Bosman decision applied to cases involving any dispute that fell under Art. 187 of the PILA. Both FIFA and CAS are organizations Established under the PILA, and therefore are bound by Art. 187. Therefore, Peñarol establishes jurisprudence where CAS and DRC panels should apply the Bosman ruling to any contract dispute, regardless where the dispute takes place because those bodies are subject to Art. 187 of the PILA.


Application of Bosman & Peñarol to Major League Soccer’s CBA Negotiations

A. Lack of a European Connection

The CBA between the MLS PA and Major League Soccer applies only to employment within the singular league. Because the freedom of movement issue applies only to that league, if a freedom of movement issue made its way to the FIFA DRC or CAS Major League Soccer may argue that there are no bars to freedom of movement. However, Major League Soccer operates three franchises in Canada, and therefore it has the potential to challenge the freedom of movement of players between those countries. Likewise, as Bosman stated, restrictions of movement of players within one “member state” may affect his freedom of movement to another “member state” “by preventing or deterring them from leaving the clubs to which they belong even after the expiry of their contracts of employment with those clubs.”[11]

In Peñarol, there was some connection to the European Economic Area, as a French Club (PSG) was pursuing the player in question. Therefore, Major League Soccer can argue that since the player movement here does not touch the EU or Switzerland, Peñarol should not apply. However, given the above referenced portions of Bosman[12] and the fact that Peñarol applied Swiss public policy to a Uruguayan Football Association rule, the fact that the rule does not affect movement to or within Europe or Switzerland may not matter.

B. Single Entity and Free Movement

There are three possible scenarios for a player when his contract expires. He can a) sign a new contract with his current club; b) join a new club competing under a different national association (an international transfer); or c) join a new club competing under the same national association his current club (a domestic transfer).

If a player signs a new contract with his current so long as the player agrees to an extended term, and that term follows FIFA’s (lose) 5 year contract term rule under Article 18(2) of the FIFA RTSP[13] there are, obviously no legal issues. The player is happy, the club is happy.

If a player decides to transfer to a new club at the end of his contract then the question becomes, does the standard set by Peñarol and Bosman overtake potential provisions in an MLS CBA?

For International Transfers, and transfers to other domestic leagues (NASL, USL Pro), the answer is an obvious yes. The CBA only covers terms of employment within the league itself. If a player signs with a new club in a league in a new country, or even a different league in the US, the CBA should not apply.

The more interesting question is: does Peñarol (and therefore Bosman) invalidate any MLS CBA restrictions regarding out-of-contract transfers between MLS franchises. As stated before Major League Soccer contract disputes may be subject to the FIFA DRC and therefore CAS jurisdiction. If the case went to the DRC, or later appealed to CAS, the player or the new club would most likely request the panels to apply Peñarol and Bosman. However, because of Major League Soccer’s single entity composition the arguments more difficult to apply. [14]

Each MLS franchise is technically a subsidiary of Major League Soccer. Therefore, the league would most likely argue[15] that a free agency dispute is not a freedom of movement issue so much as a freedom of association issue. Specifically, as a single entity, Major League Soccer has the right to negotiate new employment terms with employees, including where in the organization an employee can work, or a method by which the employee is selected to work at its various branches.

Although, because of the nature of the “business” franchises do compete for employees. It is not a stretch to argue that if a player is wanted by a franchise, if the league rules get in the way of the player moving to that franchise, it could still be found to violate the principles of freedom of movement.

If the dispute were between franchises in regards to the signing of a player, it would be very difficult to argue that those franchises are two branches of the same tree. If the league, or another club came between the signing of an out-of-contract player and a franchise, and the franchise brought suit before the DRC, a panel may find that the provisions for player movement after their contract has expired violates basic Swiss public policy. Therefore, like in Peñarol, the provisions regulating player movement after their employment contract has expired are invalid, and MLS players have the right to move freely to any new MLS franchise that will have him.

However, if the dispute arises from a player challenging, for example, a re-entry draft, and all of the franchises in MLS tow the same line, the league’s argument may carry some weight.[16] Freedom association, by all accounts, allows companies to condition terms of employment to working at specific branches of the organization.


Final Thoughts

Many have pointed to the fact that free agency is a major sticking point for MLS CBA negotiations. However give nature of the international transfer market, free agency will definitely exist for players moving on free transfers to different leagues, regardless of CBA terms. Likewise given the composition of US Soccer and MLS contract dispute resolution, the possibility of applying Swiss public policy also leaves enforcement of any current or future CBA terms inhibiting free agency in question.

This may hurt the bargaining power of the MLS Players Association. If players can already freely move to new leagues removing restrictions on Free Agency may not be a primary issue for a number of players.

Alternatively, because of the current employment market, FIFA DRC and CAS jurisprudence, and US Soccer and MLS dispute resolution procedures, any provision inhibiting free agency in the CBA could be circumvented depending on how the player goes about challenging the dispute, or where he decides to pursue his career. Therefore, free agency restrictions in the CBA may lose their teeth, depending on how they are challenged.



[1] Union Royale Belge des Sociétés de Football Association ASBL v Jean-Marc Bosman, (1995) C-415/93

[2] Id. at ¶ 99.

[3] Id. at ¶ 100.

[4] Id. at ¶

[5] TAS 2005/A/983 & 984, Club Atlético Peñarol v. Suarez et al

[6] Id.

[7] Id.

[8] See, Free Movement of Persons Switzerland – EU/EFTA, Swiss State Secretariat for Migration,

[9] See, Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons [OJ L 114 of 30.4.2002].

[10] Id.; See also Bosman, (1995) C-415/93.

[11] Bosman, (1995) C-415/93 at ¶ 99.

[12] See Supra.

[13] See FIFA Regulations on the Status and Transfer of Players Art. 18(2) “while the maximum length of a contract shall be five years. Contracts of any other length shall only be permitted if consistent with national laws.”

[14] Although, this single entity composition creates other possible problems for the league.

[15] Aside from the fact that Swiss and EU labor law principles should not apply.

[16] Although a re-entry draft may violate art. 18 bis of the FIFA RTSP.


Steven Gerrard’s Transfer to Major League Soccer

Gerrard’s Transfer to the LA Galaxy

Liverpool Legend, Steven Gerrard, announced that he will move to the MLS franchise LA Galaxy at the end of the Premier League season. While a huge deal for both Liverpool and LA Galaxy, a move to Major League soccer from Europe is not without its idiosyncrasies. Because of this, Gerrard’s marquee move creates a great opportunity to review the mechanics on high-profile moves in and out of North America’s top-flight soccer league.

Player Registration

According to FIFA rules, players must register with a club to compete in FIFA-recognized competitions . At the upper level, these registrations are logged via FIFA’s computerized TMS system. FIFA requires the use of the TMS for all international transfers of professional players.

A player can only register to a single club at one time. Even for loaned players, said players can only register with the team they intend to represent on the pitch.  Additionally, registration can only happen (with limited exception) occur during a designated registration period generally referred to as the “transfer window.”

This scenario is generally straightforward. Club A signs an agreement with Club B to transfer Player C’s registration during the designated transfer window. Or, as the Case is with Gerrard, Player A’s contract with Club B expires, and player A signs and registers with Club C.

However there are two difficulties regarding players competing in leagues outside of MLS moving to MLS franchises. First, the fact that the MLS season and therefore registration periods (transfer windwos) are different than most professional soccer seasons throughout the world. Second, because of MLS’s single entity structure and roster rules, what types of designated categories the player fits determines where the Player will go, and how much say the player will have regarding which MLS franchise the player is moved to.

Registration Period

Under most circumstances, a player can only change club registrations during designated registration periods. Most major professional soccer leagues follow an August to June season. Most leagues have two registration periods during those seasons, generally, one running through July and August and a second, mid-season, in January. However, the MLS season begins in March and runs through October. Therefore its registration period runs between mid-February and mid-March, and then again, mid-season, in July.

This poses an obvious complication for Gerrard, and any player moving between the MLS and foreign leagues. Specifically, deciding on the best time period to register with the player’s new american soccer franchise.

So long as a transfer is within the registration period for one of leagues involved, the registration can be changed. Gerrard’s Liverpool contract will expire in July, the end of his Premier League Season. He will then presumably (more on that later) register with the Galaxy with no transfer fee (or as it is better known in International soccer parlance, move in a “Bozeman” transfer) as he will be a free agent.

After the July transfer, Garrard will have played a full Season of EPL, Capital One Cup, FA CUP, and UEFA matches with Liverpool, since last August, after playing in the World Cup in the summer before that Season. The World Cup is also sandwiched between the end of the 2013/14 season and the beginning of the current 2014/2015 season. Additionally, by July, Major League Soccer will be midway through their season. With Gerrard playing so much football and moving stateside so late in the MLS season,  Fans may not see Gerrard competing on American soil until either the MLS playoffs (if the Galaxy qualify), or possibly may have to wait until the start of the Major League Soccer 2016 season. There is even a potential for Major League Soccer to loan Steven Gerrard back to Liverpool for the first half of Premier League 2015-16 season and join at the beginning of the 2016 MLS season.

Single Entity

A quick note: If the Player is moving to the MLS (like in Gerrard’s case), the player and the foreign club (if the player is still within the contract term with the foreign club) must negotiate with Major League Soccer, not one of the individual franchises. Luckily, “Designated Players” (like Gerrard) have more bargaining power with what franchise they move to, as they are more desirable to the League.

Designated Player, MLS CBA and MLS Roster Rules

Additionally, Major League Soccer has detailed roster rules, which all franchises must comply. These rules put various players into different categories, which have different effects on how players are brought to clubs and how their compensation is calculated towards the league’s salary cap.

Steven Gerrard will transfer as a Designated Player. Per the collective bargaining agreement between the MLS player’s association and Major League Soccer, each squad has a specific number of Designated Players whose individual salaries will not exceed $387,500.00 in the capped roster budget. In 2014 that number was three, although there have been rumors that the 2015 MLS CBA may increase that number. Therefore, Gerrard’s alleged $6M per year salary will only count towards $387,500.00 of the LA galaxy’s salary budget for cap purposes.

Likewise, unlike allocation players, Super Draft players, and lottery players, Gerrard’s Designated Player status allowed him some control over deciding where he wants to move within the league. Allocation slots and team selection order (for USMNT players coming into the MLS) depend on prior team performance and player transfer success. Super draft selections depend on player desirability and club performance the season before. Lottery selections follow the same process as Super Draft selections but occur when a player has signed with Major League Soccer after the Draft has occurred.

For Designated Players, a franchise must merely desire to sign a player, have an available Designated Player slot open and have the player desire to sign with the Franchise. Seeing as the LA Galaxy has an open Designated Player slot after the retirement of Landon Donovon, and seeing as in an interview Gerrard stated, “they [The LA Galaxy/MLS] basically told me what I wanted to hear,” it seems those requirements have been met.

One note: the MLS CBA gives Major League Soccer the ability to move players as they see fit. Specifically the MLS CBA[1] states that “a Player may be required, without his consent, to relocate to any Team in the League as directed by MLS.” This means, if for some reason, major chances come in the league, or the league feels the need to move Gerrard to a different franchise/media market within the league, it can do so without Gerrard’s consent. Whether that is legal pursuant to FIFA rules, FIFA DRC jurisprudence, or CAS jurisprudence is another story. While it is permissible within the rules, it would be an absolute PR nightmare for the MLS if Gerrard, or any player in that position protested, so it seems an unlikely event.



[1] The only full version of an MLS CBA available to the public expired on January 1, 2010. The following CBA effective until January 1, 2015 was never published, although a memo outlining changes was distributed. That memo made no mention of this section (15.1), so it is fair to assume it is still a valid provision. However, a new CBA is being negotiated at the moment, so this discussion may become completely moot depending on what comes from those negotiations.