The Colorado Supreme Court Clarifies Ethical Prohibition against Lawyers’ Participation in Covenants Not to Compete
The recent decision of the Colorado Supreme Court in Johnson Family Law P.C. v. Bursek, 2024 CO 1, ¶¶ 17-9, 2024 WL 159107, *5, clarifies the ethical prohibition against lawyers’ participation in offering or making covenants not to compete as restrictions on the right to practice.
Colo. R. P. C. 5.6 as a Statement of Public Policy
In this decision, the Supreme Court concludes that the prohibition in Colo. R. P. C. 5.6 against lawyers’ participation in offering or making a covenant not to compete (or other restraint on practice) is a statement of Colorado public policy. As such, the Court holds that a contract between a lawyer and the lawyer’s former firm requiring the lawyer to reimburse the firm for about $1,000 in “costs” when the lawyer leaves the firm and takes a client is void as against public policy and is therefore unenforceable.
In-House Counsel and Covenants Not to Compete
Increasingly, in-house counsel are being asked to sign covenants not to compete. Although Johnson Family Law P.C. does not involve in-house counsel, it is an important reminder that such agreements are likely to be void for in-house counsel, and a lawyer should neither sign them nor ask another lawyer to do so.
Legal Implications of the Decision
Johnson Family Law P.C. v. Bursek has significant implications for the legal profession. The decision clarifies the ethical rules governing lawyers’ participation in covenants not to compete and emphasizes the importance of upholding the public policy of promoting competition in the legal marketplace. Lawyers are advised to review their employment contracts and partnership agreements to ensure compliance with the ethical rules and to avoid potential conflicts in the future. In-house counsel are reminded of the potentially void nature of covenants not to compete and should seek legal advice before signing such agreements.
Long-tail Keywords
Ethical Prohibition Against Lawyers Participation in Covenants Not to Compete
The Colorado Supreme Court clarifies the ethical prohibition against lawyers’ participation in offering or making covenants not to compete as restrictions on the right to practice.
Colo. R. P. C. 5.6 as a Statement of Public Policy
The Colorado Supreme Court holds that the prohibition in Colo. R. P. C. 5.6 against lawyers’ participation in offering or making a covenant not to compete is a statement of Colorado public policy.
In-House Counsel and Covenants Not to Compete
Johnson Family Law P.C. v. Bursek serves as a reminder that covenants not to compete are likely to be void for in-house counsel.
Legal Implications of the Decision
Johnson Family Law P.C. v. Bursek has significant implications for the legal profession, emphasizing the importance of upholding the public policy of promoting competition in the legal marketplace.
Originally Post From https://www.mondaq.com/unitedstates/family-law/1417812/what-does-the-recent-colorado-supreme-court-decision-in-johnson-family-law-pc-v-bursek-mean-for-in-house-counsel
Read more about this topic at
Ethical Issues for Attorneys Related to Restrictive Covenants
Restrictive Covenants: Ethical Issues for Attorneys
