Opinion #126. Non-Compete Agreements as a Condition of Employment

Issued by the Professional Ethics Commission

Date Issued: September 25, 1992

OPINION #126 (1992) WAS SUPERSEDED BY M. BAR R. 3.2(g) ADDED FEB. 1997.

FACTS

A law firm interviews a lawyer for a position in the firm as an associate. One of the firm’s requirements is that the attorney, if hired, sign an employment agreement which includes a provision that the lawyer will not compete with the law firm should employment be terminated for any reason. The lawyer is initially hired and she and the firm proceed to negotiate the exact terms of the employment agreement. The lawyer attempts to have any non‑competition covenant deleted from the employment agreement, but the law firm refuses. The lawyer then declines to sign the employment agreement and she is fired.

QUESTION

Is it a violation of the Maine Bar Rules for a law firm to require that a lawyer execute a non‑competition agreement as a condition of employment?

OPINION

No. It is not a violation of the Bar Rules for a law firm to require or utilize non‑competition agreements. Although both the ABA Model Code of Professional Responsibility and the more recently adopted ABA Model Rules of Professional Responsibility both specifically prohibit restrictions on the employment of an attorney after the termination of any employment relationship, Model Code D.R.2‑108(A) and Model Rule 5.6(a), no such provision in any form appears in the Maine Bar Rules. While this issue has been the subject of considerable litigation and commentary in other jurisdictions and such conduct has almost universally been held to be “unethical,” such decisions are uniformly based on the provisions of the Model Code or Model Rules, or particular state variations thereof.[1]

Since ethical issues in Maine are governed exclusively by the terms of the Bar Rules, we conclude that, in the absence of a provision in those Rules prohibiting non‑competition agreements, there is no prohibition against the above described conduct.[2]


FOOTNOTES

[1] See for example 51 Law.Man.Prof.Conduct, Section 1201 (1992); Wolfram, Modern Legal Ethics, 888, fn. 72 (1986) and Garwin, “You Can’t Take It With You”, 78 ABA Journal 89 (July 1992) and cases therein.

[2] In so answering this question we note that this opinion, consistent with the long established practice of this Commission, does not address whether, or to the extent to which, such covenants are permissible under substantive law in Maine.


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