Shiny talent, shady dealing: the case of Mauro Milanese v Leyton Orient Football Club

Introduction

The fallout from senior level football terminations rarely extends to a trial in the High Court. Most disputes are settled or go to arbitration, which is a private process. Leyton Orient’s sacking of its Director of Football Mauro Milanese, however, prompted Milanese to sue the club for wrongful dismissal, and the case went to trial in March 2016. Judgment was given in May 2016. 

Facts

Leyton Orient appointed Mauro Milanese, an ex-Serie A and QPR player, as its Director of Football in July 2014, but dismissed him with immediate effect in January 2015 for serious misconduct. Milanese sued for unpaid wages, alternatively damages. Leyton Orient counterclaimed for breach of what it claimed were the fiduciary duties that Milanese owed the club.

The main part of the judgment centres on Milanese’s involvement in the possible transfer of a 14 year old player from the club’s academy. The player was selected for the England under-15 squad in autumn 2014, and several clubs, including from the Premier League, were interested in signing him. Milanese was friends with a football agent based overseas and forwarded to the agent offers that the club received for the player. There was a key meeting in December 2014, at which the player’s father thought he was going to sign documents for his son’s transfer to Arsenal, following an offer made by that club. What was said at the meeting was in dispute, and the judge, Mrs Justice Whipple, preferred the father’s version of events. According to the father, at the meeting, Milanese and the agent pressurised the father to agree to the player’s transfer to QPR, offering the father a percentage of the transfer fee. The father wanted his son to move to Arsenal, but Milanese said that if the player did not sign for QPR, Leyton Orient would not allow the player to transfer to another club. Milanese and the agent also gave the father an agreement to sign at the meeting. The agreement was for the agent to be appointed the player’s exclusive authorised agent, even though under FA Regulations a minor cannot have an agent. The contract also contained oppressive and unfair terms, such as a fixed term of five years with no provision for termination on notice, and a contractual obligation on the player’s father to procure a further agreement between the player and the agent when the player turned 16. The father refused to sign the agreement. 

The judge concluded that Milanese had a joint plan with the agent to get the latter appointed as the child’s representative. She found that Milanese had conveyed a false impression that the agent acted for the club, or at least with its authority. Her conclusion was that by being involved in the agent’s agreement, Milanese had acted in breach of the term of mutual trust and confidence implied into his employment contract, and the club had been justified in summarily dismissing him.

Fiduciary duty

However, the club failed in its counterclaim, in which it sought the return of all wages paid to Milanese while he has an employee. The basis of the counterclaim was that Milanese occupied a role as a fiduciary in relation to the club. It was agreed that most employment relationships are not fiduciary, i.e. they do not place employees in a position where they are obliged to pursue an employer’s interests at the expense of their own. The club said that Milanese was a fiduciary because he was trusted to spend the club’s money on transfers. The court disagreed. All Milanese’s obligations to the club were contained in his employment contract, and he had no specific contractual obligations capable of making him a fiduciary.  

Comment

The fight for talent at youth level football can be fierce and, as shown by the events described in this case, sometimes dirty. A star in the making will attract the attention of agents, and not all agreements put in front of young players and their parents are worth signing. Employees who have senior roles such as Director of Football must not abuse their positions by applying improper pressure on young players and their families.