It's not that it's 'illegal' it's just that it's not enforceable in practicality.Surely at CEO level and having worked for the club before you're not sitting there all timid and shy and not wanting to upset anyone?
Wouldn't your solicitor read it as well and say that's crap get them to take it out?
Seems to me if its useless why is it there and if it's illegal why is it there. If someone had said something at the start what could now be a whole mess could have been avoided.
People put unenforceable or unreasonable terms into contracts all the time that later get contested because sometimes they do get away with it. It's basically the main reason why one whole half of the entire legal profession exists, to argue these finer points in courts and through mediation to get a result one way or the other on a point of contention.
Dave Donaghy has been a Sports Administrator for decades and with recent experience in the NRL as his main and most recent skillset and experience. If you insert a clause in his contract requiring that he not be a Sports Administrator in the NRL for a period of time after leaving your employment that is almost certainly going to be viewed as a restraint of trade and therefor not enforceable.
Melbourne would essentially have to prove that it is a reasonably necessary clause needed to protect the legitimate interests of their business. The fact that a CEO's role is largely commercial in nature and that these clubs operate in two totally different cities only exacerbates how hard it is to reinforce that point and makes it even more exceedingly unlikely that they'd have much to work with. As I said above, if this was a club answerable to shareholders it would be viewed as a very poor use of resources. When you have a small group of private owners with very deep pockets, you can afford to take it personally, even if a good result is fairly unlikely.
This happens all the time in a huge range of industries and it's particularly prevalent amongst senior leaders and executives especially so this is certainly not unusual in terms of these sort of matters.