Recently, the First Department in Feiner & Lavy, P.C. v Zohar,1 reiterated that Rule 5.6(a)(1) of the Rules of Professional Conduct prevents restriction of the right of a lawyer to practice after termination, except in limited circumstances that were not relevant in this case. However, noncompete clauses may be enforceable to the extent they prohibit soliciting of a previous employers’ clients.
In Feiner, the defendant attorney was a former associate with the plaintiff; during his employment with the plaintiff, he entered into an employment agreement that included a confidentiality requirement regarding customer lists or other customer information, a noncompetition agreement, and a nonsolicitation agreement. This agreement allegedly contained restrictive language prohibiting the defendant from practicing “in the same or similar business as the plaintiff” for a specified period and within a specified radius. The agreement also allegedly prohibited the defendant from “directly or indirectly soliciting any business from customers or clients of the plaintiff” with the same restrictions limiting the defendant’s practice.
The plaintiff filed suit alleging that the defendant breached his employment; the defendant moved for summary judgment arguing that 1) the employment agreement violated Rule 5.6(a)(1), as it barred the defendant from his right to practice, 2) the noncompete clause was so overly broad it constituted anticompetitive conduct, and 3) he did not solicit clients.
The First Department concluded that to the extent the noncompete provision sought to prevent the defendant from “conducting business activities that are the same or similar to those of [the plaintiff]” within the specified radius is void and unenforceable. However, the court held that the noncompete clause “may be enforceable to the extent that it prohibits [the defendant] from soliciting the plaintiff’s clients.” Finally, the First Department held issues of fact remained as to whether and to what extent the defendant solicited the plaintiff’s clients in violation of the agreement.
In sum, the key takeaways are that 1) employment agreements containing noncompete provisions must be carefully drafted so that they do not restrict an attorney’s right to practice after termination of the relationship and 2) carefully drafted nonsolicitation agreements may serve to protect law firms from departing attorneys who attempt to solicit the law firm’s clients.
If you have any questions regarding the content of this alert, please contact Tara Sciortino, counsel, at tsciortino@barclaydamon.com, David Hutter, associate, at dhutter@barclaydamon.com; or another member of the firm’s Professional Liability Practice Area.
1 2021 N.Y. Slip Op. 03407 (1st Dept.)