Summary: An employment contract between attorneys, in the nature of a restrictive covenant, provides that for a period of five years from the termination of employment the attorney-employee shall not solicit business or represent any client in a particular county. The contract is a contravention of DR 2-108. It is also a violation of DR 2-108 for a law firm to require, as a condition of employment, that an attorney sign such an employment contract.
Facts: Attorney A states that in March of 1978 he signed an employment contract with a law firm which provided, among other things:
Restrictive Covenant. For a period of five (5) years from the date of termination of his employment, the Employee shall not, within the geographical limits of the County of ... State of Massachusetts, directly or indirectly, solicite (Sic) business or represent any client, directly or indirectly, which was the client of ... (the law firm) during the time of his employment. The Employee agress not to solicite (Sic) or accept any business from any commercial collection agency, within the United States, for any claims within ... County, for a period of five (5) years from the termination of employment. And further, the any commercial law list or directory for a listing within the County of ... for five (5) years after termination from ... (the law firm). And further agrees not to solicite (Sic) a listing or write a contract with any law list of any kind for a listing or rating within the County of ... Commonwealth of Massachusetts, the only exception being The Martindale and Hubbell Laws (Sic) List.
The Employee further agrees not to work for, advise, represent or in any way be associated with any law firm within the County of ... engaged in the practice of Commercial Law, more especially, any law firm which is actively engaged in Commercial Collections or which may be listed in any Commercial Law Directory or Law List. This restriction shall exist for a period of five years, but shall be limited only to law firms within ... County.
In October, 1978, A's employment with the law firm was terminated. A inquires as to the enforceability of the agreement and the applicability of DR 2-108.
Discussion: The question of enforceability of the restrictive covenant described above is a question of law and, therefore, beyond the scope of the committee's jurisdiction.
DR 2-108 provides:
Agreements Restricting the Practice of a Lawyer.
(A) A lawyer shall not be party to or participate in a partnership or employment agreement with another lawyer that restricts the right of a lawyer to practice law after the termination of a relationship created by the agreement, except as a condition to payment of retirement benefits.
In the committee's view, the agreement described above is in flat contravention to DR 2-108(A). The committee also believes that it would be a violation of DR 2-108(A) for any law firm to require as a condition of employment that a lawyer sign such an agreement. The committee notes that the American Bar Association in Formal Opinion 300 (1961) stated that it was unethical for an attorney employing another attorney to include as part of the employment contract a restrictive convenant prohibiting the employee from practicing law in the city and county for two years after the termination of employment. See also Drinker, Legal Ethics 204-205 (1953): "A partnership agreement may not contain a clause that the partner shall not solicit or accept firm clients for two years after the term."
Permission to publish granted by the Board of Delegates, 1979. As stated in the Rules of the Committee on Professional Ethics, this advice is that of a committee without official governmental status.