Can a lawyer sign a settlement that bars him from representing future clients against a party, discloses his clients' identities, and drops his bar complaints against opposing counsel?
Apply this to your situation
This page answers the general question as of 1990. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
A lawyer who had investigated franchise-fraud claims for two franchisees was asked to sign a settlement with the franchisor that contained three conditions: a clause requiring him and his clients to hand over a complete list of every franchisee they had contacted; a clause barring him from contacting or assisting any franchisee in future actions against the franchisor; and a clause requiring all parties to dismiss any pending bar complaints against opposing counsel. The opinion concluded that the lawyer could not ethically agree to any of the three.
On the first clause, the committee held that disclosing the lawyer's attorney-client relationships with the franchisees would violate ER 1.6(a), which forbids revealing information relating to a representation without the client's consent after consultation. Relying on its earlier Opinion 87-22, the committee explained that a client's name can itself be protected information, and that disclosure here would be at least highly embarrassing and possibly damaging given the franchisee-franchisor relationship; the lawyer could disclose only contacts made with people as third parties outside any attorney-client relationship.
On the second clause, the committee held that agreeing not to contact franchisees in future actions against the franchisor would violate ER 5.6(b), which "plainly prohibits" a lawyer from making an agreement that restricts the lawyer's right to practice as part of settling a controversy between private parties; the comment to ER 5.6 confirms that a lawyer may not agree not to represent others in connection with settling a client's claim. On the third clause, the committee held that the lawyer could not agree to dismiss disciplinary charges: under Supreme Court Rule 54(g) the decision to pursue discipline rests with the State Bar, not the complainant, and ER 8.3 imposes a mandatory duty to report another lawyer's misconduct that raises a substantial question about that lawyer's honesty, trustworthiness, or fitness. The committee added that, because the duty is mandatory, the lawyer also could not advise his clients to withhold their own reports, as doing so could violate ER 8.4(a).
Currency note
This opinion was issued in 1990, before the State Bar of Arizona's adoption of the 2003 revisions to the 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: Can a lawyer agree, as part of a settlement, not to represent others against the opposing party?
A: No. The opinion held that such a clause violates ER 5.6(b), which prohibits a restriction on a lawyer's right to practice as part of settling a controversy between private parties.
Q: Can a settlement require a lawyer to disclose the names of clients he has represented?
A: Not without the clients' consent. The opinion held that a client's identity can be protected information under ER 1.6, and that disclosing the franchisees' names here would breach confidentiality. The lawyer could disclose only contacts made with people outside any attorney-client relationship.
Q: Can a lawyer agree to drop bar complaints against opposing counsel as part of a settlement?
A: No. The opinion held that the duty to report misconduct under ER 8.3 is mandatory, that whether to pursue discipline is the State Bar's decision under Rule 54(g), and that the lawyer also could not advise his clients to withhold their own reports.
Background and rules framework
The opinion interprets Arizona ER 1.6 (Model Rule 1.6, confidentiality of information), ER 5.6 (Model Rule 5.6, restrictions on the right to practice, specifically the ER 5.6(b) ban on practice restrictions in the settlement of a private controversy), and ER 8.3 (Model Rule 8.3, reporting professional misconduct), together with ER 8.4(a) (Model Rule 8.4, violating the Rules through the acts of another). It also applies Arizona Supreme Court Rule 54(g), which provides that a complainant's unwillingness to prosecute, or a settlement between complainant and lawyer, does not by itself abate a disciplinary charge.
Citations and references
Rules of Professional Conduct:
- MR 1.6 / ER 1.6 (confidentiality of information relating to a representation)
- MR 5.6 / ER 5.6(b) (no restriction on right to practice in a private settlement)
- MR 8.3 / ER 8.3 (mandatory duty to report misconduct)
- MR 8.4 / ER 8.4(a) (violating the Rules through the acts of another)
Court Rules:
- Arizona Supreme Court Rule 54(g) (settlement or complainant inaction does not abate a disciplinary charge)
Other opinions cited:
- Arizona Opinion No. 87-22: a client's name and address can be protected information that may not be disclosed to adverse parties without consent
See also
- AZ Ethics Op. 89-06: When Lawyers Must Report Another Lawyer's Misconduct
- No further sibling opinions yet indexed.
Source
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
7/1990
Settlement agreement which prohibits attorney from representing certain clients in the future, and required him to dismiss any Bar complaints he filed against other attorneys involved in the case.
FACTS
The inquiring attorney was retained by two franchisees to investigate potential claims of franchise fraud and to negotiate a buy-back of their franchises from the franchisor (“Corporation A”). When the inquiring attorney was unable to negotiate a settlement with the attorneys for Corporation A, his clients, the two franchisees, retained another attorney to litigate the matter.
The inquiring attorney believes that the attorneys for Corporation A engaged in ethical violations during the litigation.
A settlement was eventually reached by the parties. Although the inquiring attorney was not part of the settlement negotiations, he was to be a signatory to the proposed settlement agreement. The attorneys for Corporation A have advised their client not to execute the settlement agreement unless it contains certain provisions. These provisions, in substance, are set forth below:
-
Concurrently with the execution of this Release and Settlement Agreement, the franchisees and the attorneys representing the franchisees agree to supply to the attorneys for Corporation A a full complete list of all Corporation A's franchisees who have been contacted by any of the foregoing, whether by mail or telephone, or by any other means, or who have communicated in any way with any of the foregoing concerning any legal action or potential legal action to be brought by any franchisee against corporation A or any of the other parties named in this Release and Settlement Agreement. The franchisees and their attorneys verify, warrant and guarantee that the list supplied herewith is a complete and accurate list of any and all of corporation A's franchisees who have been contacted in any way or who have contacted them in any way in connection with any action or potential action against Corporation A or any of the other parties named in this Release and Settlement Agreement.
-
The franchisees and the attorneys representing the franchisees hereby agree not to solicit or contact any franchisee of Corporation A concerning any legal action or potential legal action brought or to be brought by any franchisee against Corporation A or any of the other parties named in this Release and Settlement Agreement. The franchisees and their attorneys also hereby agree not to participate voluntarily in any way in any legal action brought or potential legal action to be brought by any franchisee against Corporation A or any of the other parties named in this Release and Settlement Agreement. The franchisees and their attorneys hereby further agree not to defame or disparage in any way any of the parties to this Release and Settlement Agreement, including the parties' business operations and affairs.
-
The parties hereto agree to dismiss any and all bar complaints currently pending against any of the attorneys representing any of the parties hereto.
QUESTION
- Is it ethically permissible for an attorney to enter into a settlement agreement in which he must comply with these provisions?
ETHICAL RULES INVOLVED
ER 1.6. Confidentiality of Information
(a) A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation . . .
ER 5.6. Restrictions on Right to Practice
A lawyer may not participate in offering or making:
(b) an agreement in which a restriction on the lawyer's right to practice is part of the settlement of a controversy between private parties.
ER 8.3. Reporting Professional Misconduct
(a). A lawyer having knowledge that another lawyer has committed a violation of the rules of professional conduct that raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate professional authority.
Supreme Court Rule 54(g), Delay Caused by Complainant
Neither unwillingness nor neglect of the complainant to sign a complaint nor to prosecute a charge, nor settlement, nor compromise between the complainant and lawyer, nor restitution by the respondent, shall, in itself, justify abatement of the processing of any charge or complaint.
OPINION
It is the opinion of the Committee on the Rules of professional Conduct that the inquiring attorney may not ethically enter into the proposed settlement agreement.
In regard to the first paragraph of the settlement agreement, disclosure of the inquiring attorney's attorney/client relationships with various franchisees would violate ER 1.6(a), which prohibits a lawyer from revealing information relating to the representation of a client, unless the client consents after consultation, or the disclosure is impliedly authorized to carry out representation. The rule of confidentiality set forth in ER 1.6 is subject to certain exceptions relating to the client's intention to commit a crime, and controversies between a lawyer and his client, that are not applicable here.
This committee has already determined that in some situations a client's name is information relating to representation, and that disclosure of the client's name is not necessarily impliedly authorized to carry out the representation. In Opinion 87-22, the committee decided that an attorney may not reveal the name and address of a former client to parties with potential claims against the client, if the client does not authorize him to do so. The Committee determined that this would be the case even if the client's name were a matter of public record. The Committee continued:
In normal circumstances, it would be reasonable to imply that the client has consented to the revelation of his name and address to the adverse party when representation is terminated. In many cases, the attorney may be justified in implying that the client would wish to have his name and address revealed so that effective communication could be maintained and the potential problem resolved. ... Here, however, this usual exception of implied consent does not apply because the attorney has inferred that the former client does not wish to have either his name or address revealed.
Opinion 87-22 at 2-3. In the present matter, the inquiring attorney has not specified whether any franchisees have instructed him to not disclose their names. However, the revelation of the names of the franchisees by the inquiring attorney would be at a minimum highly embarrassing, and possibly very damaging to them, given the nature of the franchisee/franchisor relationship, where Corporation A could use this information to hinder future dealings with the franchisees.
Therefore, the Committee concludes that the inquiring attorney may not disclose the names of any franchisees who have consulted with him in any matters regarding Corporation A, unless they consent to have their name revealed after consultation. Otherwise, to do so would violate ER 1.6(a).
Of course, to the extent that the inquiring attorney has contacted any franchisees as third parties, outside of any attorney/client relationship and unrelated to the representation of any client, he may disclose these contacts to opposing counsel.
The second paragraph of the proposed settlement agreement forbids the inquiring attorney from contacting any franchisees in the future with regard to any action to be taken against Corporation A, or any other party to the pending litigation. The inquiring attorney, of course, cannot agree to the proposed clause without violating ER 5.6(b), which plainly prohibits a lawyer from 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. The comment to ER 5.6 makes this prohibition even more clear:
Paragraph (b) prohibits a lawyer from agreeing not to represent other persons in connection with settling a claim on behalf of a client.
The second paragraph of the proposed settlement agreement falls within the prohibition of ER 5.6(b). Therefore, the respondent cannot, with ethical propriety, consent to this portion of the settlement agreement.
Finally, with respect to the third paragraph of the proposed settlement agreement, it should be noted that, as a practical matter, it would not be within the inquiring attorney's control to dismiss any disciplinary proceedings already pending against the attorneys for Corporation A. This is because Rule 54(g), Ariz.R.S.Ct., leaves the decision of whether to pursue a disciplinary matter in the hands of Discipline Department of the State Bar. The inquiring attorney's unwillingness to assist in the prosecution of a disciplinary charge, in itself, would not justify abatement in the pursuit of any disciplinary matters pending against opposing counsel.
Additionally, the inquiring attorney cannot agree to not file any Bar complaints against the attorneys for Corporation A to the extent the agreement would run afoul of his obligations to report misconduct pursuant to ER 8.3. This rule requires an attorney who knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects, to inform the appropriate professional authority. This duty is mandatory, and the inquiring attorney may not agree to withhold reporting any misconduct of this nature.
Obviously, it follows that if the inquiring attorney has a mandatory duty to report misconduct, he cannot advise his clients to not report the misconduct themselves. Such conduct could potentially violate ER 8.4(a), which prohibits a lawyer from violating the Rules of Professional Conduct through the acts of another.
Therefore, the inquiring attorney in this matter may not agree to withhold filing any disciplinary charges against the opposing attorneys, to the extent that the opposing attorney's misconduct would be reportable under the terms of ER 8.3(a).
In conclusion, it is the opinion of the Committee on the Rules of professional Conduct that the inquiring attorney may not ethically enter into any of the three proposed paragraphs that would be part of the settlement agreement.
©State Bar of Arizona 1990
Get today's answer for your situation
You just read a 1990 opinion on this question. Ezel checks the current rules of professional conduct in your state and answers your specific situation, with citations.
Opens in Ezel Pro. Every answer cites the rules it relies on.