Can a lawyer agree, as part of a settlement, not to represent other clients in future suits against the same opposing party?

Plain-English summary

The Committee considered whether a lawyer may offer or agree, in settling a dispute, to a term providing that a lawyer will not represent the same or different clients in disputes against the same opposing party. The inquiry arose against the backdrop of Feldman v. Minars, in which the Appellate Division, First Department, enforced such a settlement term and disqualified counsel, while observing that "a strong case can be made" that the agreement violated DR 2-108(B) and leaving the ethics question to the disciplinary authorities.

The Committee concluded the agreements are improper. DR 2-108(B) provides that, in connection with the settlement of a controversy or suit, a lawyer shall not enter into an agreement that restricts the right of a lawyer to practice law. The Committee read the rule as unambiguous in reaching agreements not to represent present or future clients in litigation against a settling defendant, and joined numerous other bar committees and ABA Formal Opinion 93-371 (interpreting Model Rule 5.6(b)) in finding such agreements improper. It traced the rule's history to the 1970 deletion of language that had allowed narrow case-specific restrictions, explaining that such covenants improperly restrict a lawyer's ability to practice and create conflicts of interest.

The Committee also concluded that DR 2-108(B) reaches lawyers on both sides of a restrictive agreement, because the rule bars entering an agreement that restricts "the right of a lawyer to practice law," whether the lawyer is restricting her own practice or another's. In this respect, the Committee noted, the Code is broader than Model Rule 5.6(b), which is framed in terms of a restriction on "the lawyer's" own right to practice. While noting commentary questioning the rule's rationale, the Committee took no position on whether DR 2-108(B) should be revised, holding that its clear command must be followed so long as it remains part of the Code.

Currency note

This opinion was issued in 1999, before New York replaced the Code of Professional Responsibility (the Disciplinary Rules cited here) with the New York Rules of Professional Conduct, effective April 1, 2009. The restriction is now carried in New York Rule 5.6. 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 Treat this page as historical context, not current guidance.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 settlement agreement bar a lawyer from suing the same defendant for other clients?

A: No. The opinion concluded that DR 2-108(B) makes it improper for a lawyer to enter an agreement, in connection with a settlement, restricting the lawyer's right to represent present or future clients against the settling party.

Q: Does it matter that a court might enforce the agreement?

A: No. The opinion concluded the agreement is ethically improper even if it may be enforceable as a matter of law, a question the Committee treated as outside its purview.

Q: Does the rule apply to the lawyer proposing the restriction, too?

A: Yes. The opinion concluded DR 2-108(B) reaches lawyers on both sides, because it bars entering an agreement restricting any lawyer's right to practice, whether the lawyer's own or another's, and is broader than Model Rule 5.6(b) in this respect.

Background and rules framework

The opinion interpreted New York's then-governing DR 2-108(B) (no settlement agreement restricting a lawyer's right to practice, the analog of Model Rule 5.6(b)). The analysis turned on the plain text of the rule and its 1970 history, and on the conclusion that the rule binds lawyers on both sides of such an agreement.

Citations and references

Rules of Professional Conduct (then in effect):

• DR 2-108(B) / 22 NYCRR 1200.13(b) (no settlement agreement restricting a lawyer's right to practice; analog of Model Rule 5.6(b))

Cases:

• Feldman v. Minars, 230 A.D.2d 356 (1st Dep't 1997), enforcing a restrictive settlement term while flagging the ethics concern
• Cohen v. Lord, Day & Lord, 75 N.Y.2d 95 (1989), invalidating a competition disincentive under DR 2-108(A)

Other opinions cited:

• ABA Formal Opinion 93-371 (1993): restrictive settlement agreements under Model Rule 5.6(b)

See also

• ABA Formal Op. 06-444: Restrictive Covenants and Retirement Benefits
• CA COPRAC Op. 2012-185: Settlement and State Bar Complaint Suppression

Source

• Landing page: https://www.nycbar.org/reports/formal-opinion-1999-03-restrictive-practice-agreements-settlement-agreements/