ABA Opines on Lawyer Non-competes, But Does It Apply to In-House Counsel?
The American Bar Association just issued an opens in a new windowopinionopens PDF file about what lawyers and law firms can and should do when lawyers move from one firm to another. A key point of the opinion is that, according to the ABA, “ethics rules do not allow non-competition clauses in partnership, member, shareholder, or employment agreements” among attorneys. Remember, though, that these rules may not be the ultimate authority in the in-house counsel context. A recent decision from a Colorado trial court held the ethics rules only bar agreements between attorneys, so a company may ask an in-house lawyer to sign a non-compete. Once the lawyer signs it (even if she was ethically prohibited from doing so), she cannot use the ethics rules to break the contract. While the Colorado decision appears to be an outlier, in-house counsel should think critically before signing a non-compete, and before potentially violating one by switching employers.