After the whistle for no-poach agreements – ECJ draws the line in Tondela

Kickoff: Setting the scene

The Tondela case reached the ECJ as a preliminary ruling reference under Article 267 TFEU from the Portuguese Tribunal da Concorrência, Regulação e Supervisão. The underlying dispute concerned a no-poach arrangement concluded in April 2020 between the Liga Portuguesa de Futebol Profissional (LPFP) and almost all Portuguese First and Second Division football clubs. In the early weeks of the COVID-19 pandemic – with the 2019/2020 season suspended – the clubs convened and committed not to hire any player who had unilaterally terminated their contract for pandemic-related reasons.

The agreement addressed a specific timing problem: many contracts were due to expire on 30 June 2020 (the original season end date), so without coordinated action, players whose contracts expired mid-suspension could have signed with rival clubs before the championship resumed, altering team compositions. The Portuguese Competition Authority found that the arrangement constituted a restriction of competition by object on the player recruitment market and imposed fines.

First half: No-poach agreements are restrictions of competition by object

The main question of the referring court was whether a no-poach agreement as the one between Portuguese football clubs must be considered as restricting competition “by object”. For employers, the stakes of the by object question are high. A by object finding allows regulators to establish an infringement without proving any anti-competitive effect, while a finding of an restriction of competition by effect requires concrete proof of harm which is a much higher bar.

In the Tondela judgment, the ECJ now confirms that no-poach agreements between competing employers will, as a rule, fall into the by-object category. At the same time, the ECJ left room for no-poach agreements to fall into the effects category. To discern whether no-poach agreements restrict competition by object or by effect, the ECJ points to a three-step test:

1. Content of the agreement: The court first examines whether the agreement, by its nature, amounts to a form of coordination generally regarded as harmful to competition – in particular whether it can be equated with conduct expressly listed in Article 101(1) TFEU, such as price-fixing, market-sharing, or the sharing of sources of supply. In the Tondela judgment, the ECJ found that no-poach agreements between competing employers functionally equate to a horizontal agreement on the sharing of “sources of supply” under Article 101(1)(c) TFEU – freezing the allocation of human resources, weakening workers' bargaining position, and producing indirect effects on wages even absent a direct wage-fixing arrangement.
2. Economic and legal context: As a second step the court points to the economic and legal context of an agreement, that is the actual conditions of the relevant market, including its structure, functioning, and sector-specific characteristics. In the Tondela case, the ECJ took into account the specificities of professional football – the interdependence between competing clubs and the role of stability in player rosters for the integrity of competitions. One aspect the ECJ did not make explicit but which may play a central role is the aspect of market coverage: nearly all clubs in the First and Second Divisions joined the no-poach, leaving players with no realistic alternative employer – at least on a national Portuguese market.
3. Objectives pursued: Third, the ECJ asks what objectives the agreement is meant to achieve. Decisive is whether the agreement pursues an objectively anti-competitive aim or whether legitimate objectives are also in play. In Tondela, the ECJ found that the agreement pursued both an objectively anti-competitive aim (restricting the player recruitment market) and an objectively pro-competitive aim on a related downstream market (stabilizing player rosters to allow the championship to be completed without distortion).

Taken together, the by-object classification stands as the rule. But the rule is not absolute: where a concrete examination of these three elements reveals “the precise reasons” why such a classification would be unjustified, the agreement may need to be assessed against its actual or potential anti-competitive effects instead. The ECJ's framework largely tracks the European Commission's policy brief and its Delivery Hero / Glovo decision which generally consider no-poach agreements restrictions of competition by object. At the same time, at least in principle, the ECJ leaves more room for case-by-case examination – although the practical scope remains uncertain.

There remains one point to note which may play a role when considering whether a no-poach agreement may in fact be a restriction by effect only. In its judgment the ECJ treats no-poach agreements as a single category, but there is a crucial distinction to make: that between non-hire agreements (commitments not to hire each other's workers) and non-solicit agreements (commitments not to actively approach them). We see room to argue that the three-step test may yield different outcomes for the two, particularly under its first and second limb.

Second half: The narrow Superleague exception

On the level of potential justifications of no-poach agreements, the Tondela judgment foresees the Superleague doctrine. This case-law enshrined in the ECJ’s Superleague decision holds that agreements occurring within the umbrella of a professional or sporting body escape Article 101(1) TFEU where they pursue a legitimate public interest by genuinely necessary and proportionate means. The distinction between agreements restricting competition by object or by effect is crucial in this regard: the Superleague doctrine only applies where an agreement is found to restrict competition by effect.

In the Tondela judgment, the ECJ accepted – as established in its past case law – that the integrity of sporting competitions qualifies as a legitimate public-interest objective. However, whether the exception would apply to the specific no-poach agreement at issue was left open by the ECJ and is for the national court to decide.

The remaining hypothetical defense for agreements restricting competition by object and by effect agreements that fail the Superleague test is Art. 101(3) TFEU which would require employers to demonstrate efficiency gains from their agreement. However, the evidentiary bar is high and is – in non-labor market contexts – rarely met in practice.

Stoppage time: What this means beyond the pitch

The Tondela case arose in professional football, but it will have consequences across sectors. The three-step test outlined above will become the benchmark for assessing no-poach agreements. In addition, we see three takeaways that will matter for no-poach agreements outside of the sports context:

• Potentially limited room for pro-competitive aims outside sport: The pro-competitive aim that could make the Portuguese football clubs’ agreement a restriction of competition by effect – the stability of player rosters for the integrity of sporting competition – may have few counterparts in non-sport contexts. As the judgment demonstrates, the mere interest in maintaining a stable workforce to avoid additional costs will not suffice.
• The Superleague exception is narrow in practice: Although the Superleague exception is not formally limited to sport, the legitimate-objective limb is where the doctrine's practical reach narrows for non-sport employers. Ordinary commercial interests do not qualify as public-interest objectives. Outside regulated sectors, the limb will rarely be cleared.
• Context matters: The ECJ leaning to consider the agreement in the Tondela proceedings as restrictions by object was implicitly supported by the fact that nearly all clubs in the relevant divisions joined the no-poach agreement. This may leave room to argue that no-poach agreements that cover only a small subset of competitors or carry less impact on employee mobility, e.g. because they only forbid soliciting but not hiring, escape the by object classification.

In short: outside sport-specific contexts, no-poach agreements will generally remain in the by-object category, with the now well-established consequences for enforcement and exposure.

Final whistle: The ECJ joins the Commission's line

For legal departments, HR managers, and compliance officers, the doctrinal direction of travel is clear. The Tondela judgment completes the doctrinal arc that began with the European Commission's 2024 policy brief and continued with the first fines in Delivery Hero / Glovo. The ECJ has now confirmed, judicially and authoritatively, that no-poach agreements between competing employers will, as a rule, be classified as restrictions of competition by object.

Although the case now returns to the Tribunal da Concorrência for application of the framework on the facts, it is the framework set by the ECJ that matters most for the rest of the European market.

Authored by Christian Ritz and Friedrich Preetz.