Can a lawyer agree to a settlement term barring future use of information learned in the case against the same opponent?

Plain-English summary

The committee distinguished two kinds of settlement terms that a lawyer might be asked to accept as a condition of resolving a client's case. The first, a promise not to disclose information about the matter or the settlement, was permissible. The second, a promise not to use information learned during the representation in future matters against the same opposing party, was not.

On the use-ban, the committee anchored its analysis in Rule 5.6(b), which provides that "a lawyer shall not participate in offering or making an agreement in which a restriction on the lawyer's right to practice is part of the settlement of a controversy between private parties." Building on Formal Opinion 93-371, it reasoned that even though a use-ban is not a direct prohibition on future representation, "a prohibition against using the information is a restriction upon the lawyer's right to practice" because the inability to use the information would, as a practical matter, materially limit later representations and could make them impermissible under Rule 1.7(b). The committee analogized the term to settlement provisions barring a lawyer from subpoenaing certain records or calling certain witnesses.

The nondisclosure term was different. Because information relating to the representation is already protected by Rule 1.6 and, after the matter ends, by Rule 1.9(c), the committee found that "offering or agreeing to a bar on the lawyer's disclosure of particular information is not a violation of the Rule 5.6(b) proscription." A promise not to disclose asks no more than the Rules already require. The committee read Rule 1.9(c)(1) to restrict only use of former-client information to the former client's disadvantage, so it concluded the lawyer "must be free to use the information in future representations."

Currency note

This opinion was issued in 2000, before the American Bar Association's adoption of the 2002 (Ethics 2000) revisions to the Model Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Could a lawyer agree to keep settlement information confidential?

A: Yes. The opinion held that agreeing not to disclose information about the matter or the settlement did not violate Rule 5.6(b), because confidentiality rules already protect that information.

Q: Could a lawyer agree not to use what they learned against the same opponent later?

A: No. The opinion treated such a use-ban as a restriction on the lawyer's right to practice, prohibited by Rule 5.6(b), because it would practically foreclose future representations against that party.

Q: Why did the opinion treat a use-ban as a restriction on practice?

A: Because the lawyer's inability to use the information would materially limit later representations and could trigger a Rule 1.7(b) conflict, the term functioned as an indirect bar on taking those matters.

Background and rules framework

The opinion interpreted Rule 5.6(b) (no settlement term restricting a lawyer's right to practice), read alongside Rule 1.6 (confidentiality), Rule 1.9(c) (use and disclosure of former-client information), and Rule 1.7(b) (material-limitation conflicts). It built on Formal Opinion 93-371 and Formal Opinion 95-394. Because the opinion predated the 2002 revisions, it applied these provisions as they then stood.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 5.6(b) (restriction on the right to practice in settlements)
• ABA Model Rule 1.6 (confidentiality of information)
• ABA Model Rule 1.9(c) and 1.9(c)(1) (use and disclosure of former-client information)
• ABA Model Rule 1.7(b) (material-limitation conflicts)

Other opinions cited:

• ABA Formal Op. 93-371 (restrictions on the right to represent clients in the future)
• ABA Formal Op. 95-394 (settlement restricting representation against a government agency)

Cases:

• Centerline Industries, Inc. v. Knize, 894 S.W.2d 874 (Tex. App. 1995)
• In re Wood's Case, 137 N.H. 698, 634 A.2d 1340 (N.H. 1993)

See also

• ABA Formal Op. 06-444: Restrictive Covenants in Retirement Benefit Agreements
• ABA Formal Op. 476: Confidentiality When Withdrawing for Nonpayment of Fees
• ABA Formal Op. 479: The "Generally Known" Exception to Former-Client Confidentiality

Source

• Landing page: ABA Formal Ethics Opinions index
• Original PDF: 00-417.pdf