May a Connecticut settlement bind counsel to a non-disparagement clause concerning the opposing party?

Plain-English summary

A lawyer representing homeowners in foreclosure matters regularly faced settlement demands for clauses binding both the client and counsel not to disparage the mortgage lender or servicer. Because the lawyer expected to represent other clients against the same defendants, the lawyer asked whether those clauses violated Connecticut Rule 5.6(2).

Rule 5.6(2) prohibits a settlement agreement that restricts a lawyer's right to practice. The Committee concluded that a non-disparagement clause is not automatically prohibited, but a clause that restricts the lawyer's ability to represent other clients violates the rule.

The opinion relies on Connecticut Informal Opinion 2011-08 and ABA Formal Opinion 00-417. A settlement may not prevent the lawyer from using information gained in one matter for another client when the use is not detrimental to the former client or the information is not confidential. Disclosure of confidential information still requires client consent.

A prohibited term would prevent counsel from alleging wrongdoing against the defendant in later litigation or from drafting another client's complaint making those allegations. A clause may instead restrict disparaging statements outside client representation, including statements for advertising or publicity, so long as it does not impair vigorous representation of other clients.

In practice

Under this opinion, the line is whether the settlement term limits publicity outside representation or limits legal work for other clients. A term that prevents allegations, drafting, or use of information in another client's matter is a restriction on practice under Rule 5.6(2).

Common questions

Q: Are all settlement non-disparagement clauses prohibited?

A: No. The Committee says they do not necessarily violate Rule 5.6(2).

Q: What kind of clause violates Rule 5.6(2)?

A: A clause violates the rule when it restricts the lawyer's ability to represent other clients, including by preventing allegations of wrongdoing or use of information in later matters.

Q: May a clause restrict advertising or publicity statements?

A: Yes under this opinion, if the restriction operates outside client representation and does not limit the lawyer's ability to represent other clients vigorously.

Q: May the lawyer use information from an earlier matter for another client?

A: The opinion says the lawyer must remain free to use it when the use is not detrimental to the former client or the information is not confidential. Disclosure of confidential information requires client consent.

Background and rules framework

Connecticut Rule 5.6(2) bars a lawyer from participating in a settlement agreement containing a restriction on the lawyer's right to practice. The opinion applies that rule to a clause directed at counsel's future statements about a recurring opposing party.

Citations and references

Connecticut Rules of Professional Conduct:

• Rule 5.6(2)

Other opinions cited:

• Connecticut Informal Opinion 2011-08, confidentiality clauses in medical-malpractice settlements
• ABA Formal Opinion 00-417 (2000), settlement restrictions on use of information for other clients

See also

• CT Informal Op. 19-02: Settlement confidentiality under Rule 5.6
• Utah Ethics Op. 25-01: Non-disparagement and practice restrictions
• NY State Bar Op. 730: Settlement terms restricting practice

Source

• Landing page: Connecticut Bar Association Informal Ethics Opinions
• Original PDF: Informal Opinion 13-10