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In-House Non-Compete Clauses Break Ethics Rule, Ohio Court Says

Feb. 14, 2020, 4:00 PM

Ohio lawyers working in-house can’t agree to non-compete clauses in their employment contracts because they restrict their autonomy and the ability of their clients to choose their representation, the state high court advised.

The Ohio Supreme Court noted in its Feb. 7 opinion that reasonable non-compete employment agreements are generally enforceable in the state but professional conduct rules prohibit them from being enforced against lawyers.

It joined other states like Nevada, Connecticut, and New Jersey that have found that their versions of the American Bar Association’s Model Rule 5.6(a), which prohibits restrictions on the right to practice, apply to in-house lawyers at businesses.

There’s a strong public policy interest in having clients be able to continue to be represented by the attorney of their choice, even after that attorney has changed jobs, the Ohio high court said.

However, in-house counsel who perform a combination of legal and business work can ethically execute an employment contract with a non-compete clause that only applies to the non-legal work, it said.

The opinion is Ohio Supreme Court Bd. of Prof’l Conduct, Op. 2020-01, 2/7/20.

To contact the reporter on this story: Melissa Heelan Stanzione in Washington at mstanzione@bloomberglaw.com

To contact the editors responsible for this story: Jessie Kokrda Kamens at jkamens@bloomberglaw.com; Rebekah Mintzer at rmintzer@bloomberglaw.com

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