New York State
on Professional Ethics
Covenants on Lawyers
Digest: A lawyer may not enter into an agreement with
an employer restricting the lawyer’s right to practice law following
termination of employment, even when the employment does not involve the
practice of law, but a lawyer may agree to a post-employment restriction
expressly made subject to applicable ethical rules.
1. The inquirer,
admitted to practice law in New York, is currently employed by an organization
that does not render legal services. As
an employee, the inquirer does not practice law, does not render legal advice
to the organization or any of its constituents, and does not hold herself out
as an attorney.
2. The organization’s standard procedure is to ask its
employees to sign an agreement with various provisions which the organization
considers protective of its business interests.
The contract, in nine single-spaced pages, deals with many matters,
including, among other things, confidential information (meaning data the
organization regards as proprietary as defined in the contract); ownership of
intellectual property; business conflicts; and interactions with the
organization’s customers and contractors.
Of particular relevance here is a provision – headed “Agreement Not To
Solicit” – which says, in part, that an employee signatory “may not, directly
or indirectly,” communicate with or provide services to any current or
prospective customer of the organization “relating in any way” to “any services
related to the business” of the organization.
The contract provides that this prohibition applies during the
signatory’s employment and for eighteen months following the end of employment.
3. The inquirer wishes to retain the option, at
such time as her current employment ends, to engage in the practice of
law. She is concerned that the
post-employment 18-month tail on the “Agreement Not To Solicit” is so broad as
to permit an interpretation imposing a restrictive covenant on her right to
practice. In view of this concern, her
employer offered to include a proviso that the clause is enforceable only “to
the extent not inconsistent” with applicable ethical rules
a lawyer enter into an agreement with an employer stipulating that, during the
course of employment and for a stated period thereafter, the lawyer may not provide
any services relating to the business of the employer when the employer is not
engaged in, and the lawyer’s employment does not involve, the rendition of
5. Rule 5.6(a)(1) of the New York Rules of
Professional Conduct (the “Rules”) says that a “lawyer shall not participate in
offering or making” any “partnership, shareholder, operating, employment, or
other similar type of agreement that restricts the right of the lawyer to
practice after termination of the relationship, except an agreement concerning
benefits upon retirement.” “The main purposes of Rule 5.6(a)(1)
are to protect the ability of clients to choose their counsel freely and to
protect the ability of counsel to choose their clients freely.” N.Y. State 858 ¶ 7 (2011); see Rule 5.6,
Cmt.  ("An agreement restricting the right of lawyers to practice after
leaving a firm not only limits their professional autonomy but also limits the
freedom of clients to choose a lawyer.").
Agreements prohibited by Rule 5.6(a)(1) limit the
pool of available attorneys, a client's choice of legal counsel, and a lawyer's
autonomy in accepting new engagements.
6. Rule 5.6(a)(1) applies no matter
whether the employment agreement engages the lawyer to practice law. We have not previously had a chance to
address this precise issue. Our prior
opinions on Rule 5.6(a)(1) – including those issued under its substantially
identical predecessor, DR 2-108 of the New York Code of Professional
Responsibility (the “Code”) – as well as the New York case law applying the ban
on restrictive covenants, involve law partnership agreements, or agreements
between practicing lawyers and their clients.
See, e.g., N.Y. State 858
(confidentiality clauses in agreements with members of an in-house legal department
may not extend so beyond a lawyer’s duty to maintain confidential information
as to restrict a lawyer’s post-employment right to practice law); Cohen v. Lord, Day & Lord, 75 N.Y.2d
95 (1989) (striking down non-compete restrictions in a law partnership
agreement). Nevertheless, the
unambiguous language of Rule 5.6(a)(1), and the purposes it promotes, supply no
basis to distinguish between a contract with a non-client employer (or any
other party) restricting a lawyer’s right to practice law after the relationship
is ended. In each circumstance, the
lawyer would be making or participating in the making of an agreement that, by
restraining the lawyer’s ability to practice law, constricts the freedom of the
client to choose a lawyer and the lawyer to accept an engagement.
7. Hence, if the language set forth in the
“Agreement Not To Solicit” clause “restricts the right of the lawyer to
practice law after termination of” the inquirer’s employment, then Rule
5.6(a)(1) forbids the lawyer to agree to that language. Whether contractual language amounts to such
a restriction – a separate issue – is a fact-intensive inquiry that customary
canons of contract construction control.
Although arguments may exist that the employment agreement at issue here
is not intended to restrict the inquirer’s post-employment right to practice
law, the inquirer believes, and we think reasonably so, that the sweeping
language of the “Agreement Not To Solicit” clause is sufficiently broad to
restrain the lawyer from engaging in the practice of law following termination
of her employment. Accordingly, in these
circumstances, we conclude that the inquirer may not enter into the employment
contract as currently written.
8. Here, though, the inquirer has another
option, which is to accept the employer’s offer to include language in the
agreement to the effect that the “Agreement Not To Solicit” clause is
enforceable, and may be invoked, only to the extent that the language is
consistent with Rule 5.6(a)(1) or other applicable Rule. This added language, in our view, would
remove any doubt about whether the clause impermissibly impinges on the
lawyer’s right to practice law following the end of employment.
9. A lawyer may not enter into an
employment agreement that restricts the lawyer’s right to practice law
following termination of employment, even when the employment itself does not
involve the practice of law, but a lawyer my agree to a post-employment
restriction that is expressly made subject to applicable ethical rules.