Last Updated on December 9, 2022 by Anda Malescu
In the United States, can lawyers sign non-compete agreements? The simple answer is yes, lawyers can sign non-compete agreements when accepting employment but generally these agreements are not enforceable. In other words, in general, post-employment non-compete agreements that directly restrict a lawyer’s ability to practice law are not enforceable in the United States. One word a caution to consider is that non-compete agreements and the rules regulating lawyers are governed by each state law.
Nowadays, employees are asked to sign non-compete agreements as part of their employment contract when they accept employment with a company in order to protect the company’s trade secrets, intellectual property and other sensitive information after the employees leave the company. Non-compete agreements, in general, restrict an employee from providing services or engaging in business in certain markets or locations for a certain period of time in a way that would compete with the former employer. Simply put, non-compete agreements restrict an individual’s post-employment choices in the labor market and career advancement. Like all employees, lawyers are often asked to sign non-compete agreements when accepting employment with private law firms in the United States or with other private companies as in-house counsel. But can lawyers sign non-compete agreements?
Lawyers can sign non-compete agreements with private law firms and as in-house counsel for other companies, but these agreements are in general not enforceable to restrict a lawyer’s right to practice after leaving the employer. In the context of lawyers seeking employment with private law firms, the American Bar Association Model Rule of Professional Conduct 5.6 – Restrictions on Rights to Practice – prohibits a lawyer from making a “a) a partnership, shareholders, operating, employment, or other similar type of agreement that restricts the right of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement, or b) an agreement in which a restriction on the lawyer’s right to practice is part of the settlement of a client controversy.”
The American Bar Association’s (ABA) prohibition on lawyer non-compete agreements is intended to protect attorneys’ “professional autonomy” and to ensure “the freedom of clients” to select counsel of their choice. Almost every state has adopted the same or a similar version of this rule in their local rules of professional conduct for lawyer. For example, the State of Florida regulating the Florida-licensed attorneys has adopted word for word the rule above as Florida Rule of Professional Conduct 4-5.6 (Restrictions on Right to Practice). This means that non-compete agreements that directly restrict a Florida attorney’s right to practice law are not enforceable in Florida. Most states have adopted a similar rule prohibiting agreements that restrict an attorney’s right to practice law.
In the context of non-compete agreements signed by lawyers working as in-house counsel for a private employer, the question of enforceability is not as straight forward. New Jersey was one of the first states to address the applicability of the Restrictions of Right to Practice Rule for attorneys to practicing in-house lawyers at private companies (as opposed to a licensed attorney that is hired by a private company on a position that does not involve the practice of law, for example marketing person, business development, and others). With respect to this situation, New Jersey has held that a non-compete agreement signed by an in-house lawyer is not enforceable because direct and indirect restrictions on the practice of law violate the language and spirit of the Restrictions on Right to Practice Rule 5.6 (prohibiting agreements that restrict a lawyer’s right to practice law).
Contact us, your business lawyer in Florida, to help you determine if lawyers can sign non-compete agreements and such agreements are enforceable in the State of Florida.
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