Can a Tennessee lawyer agree to a settlement non-disparagement clause that makes the lawyer a party and limits future use of information learned in the case?

Plain-English summary

The Board addressed a products liability settlement in which the defendant's proposed agreement made the plaintiff firm's lawyers themselves parties, bound by a non-disparagement clause barring them from any statement that would disparage or defame the defendants. The opinion concludes that it is improper for a lawyer to propose or accept such a provision when it requires the lawyer to become a party bound by a clause that prohibits future use of information learned during the case.

The opinion rests on two grounds. First, it restates longstanding Tennessee guidance that a plaintiff's attorney's signature on a release should vouch only for the client's release of the defendant; requiring the attorney to become a party to the release can create a conflict of interest between attorney and client (now governed by RPC 1.7), so such clauses are prohibited except where the attorney releases a claim for attorney fees. Second, the opinion applies RPC 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 client controversy."

Drawing on ABA Formal Opinion 00-417, the opinion explains that non-disparagement clauses interfere with the public policy favoring the public's unfettered choice of counsel: they limit the public's access to lawyers, can operate as veiled attempts to "buy off" plaintiffs' counsel, and create conflicts between current clients and potential future clients. The opinion adds a products-liability-specific concern that such clauses can deny the public access to safety data that plaintiffs' firms surface acting as industry watchdogs.

In practice

Under this opinion, a settlement term that makes the plaintiff's lawyer a party and binds the lawyer to a non-disparagement clause restricting future use of case information is improper, and the lawyer cannot ethically agree to it. The opinion frames the prohibition as flowing from RPC 5.6(b) and from the conflict of interest that arises when the lawyer is personally bound by terms the client wants accepted in order to obtain settlement funds. The opinion notes one narrow exception carried forward from prior Tennessee guidance: a plaintiff's attorney may sign as to the attorney's own release of a claim for attorney fees.

Common questions

Q: Does Tennessee allow a settlement that bars the plaintiff's lawyer from disparaging the defendant?

A: Per Opinion 2025-F-171, it is improper for the lawyer to become a party bound by such a non-disparagement clause when it restricts the lawyer's future use of information learned in the case. The opinion grounds this in RPC 5.6(b)'s bar on settlement terms that restrict a lawyer's right to practice.

Q: Why is a non-disparagement clause treated as a restriction on the right to practice?

A: The opinion, following ABA Formal Opinion 00-417, reasons that such clauses limit the public's access to counsel, can serve to "buy off" plaintiffs' counsel, and create conflicts between current and future clients, indirectly restricting the lawyer from informing prospective clients of relevant experience.

Q: Is there any version of this that a Tennessee lawyer can sign?

A: The opinion preserves the prior Tennessee exception that a plaintiff's attorney may sign a release as to the attorney's own claim for attorney fees. It does not approve making the lawyer a party bound by a non-disparagement clause restricting future use of case information.

Q: Does the products liability context matter?

A: The opinion adds a products-liability-specific public-policy concern: a non-disparagement clause can deny the public access to safety data, interfering with the role plaintiffs' firms play as industry watchdogs, a responsibility the opinion ties to the Federal Motor Vehicle Safety Standards.

Background and rules framework

The opinion interprets Tennessee Rule of Professional Conduct 5.6(b) (the counterpart to ABA Model Rule 5.6(b)), which prohibits a lawyer from participating in offering or making an agreement in which a restriction on the lawyer's right to practice is part of the settlement of a client controversy. It also invokes the conflict-of-interest principle now codified at RPC 1.7 (Model Rule 1.7), reflecting the earlier Tennessee analysis that making the plaintiff's attorney a party to a release can divide the attorney's loyalty to the client.

Citations and references

Rules of Professional Conduct:

• Model Rule 5.6(b) / Tennessee RPC 5.6(b) (restriction on right to practice as part of a settlement)
• Model Rule 1.7 / Tennessee RPC 1.7 (conflict of interest; current clients)

Statutes:

• 49 U.S.C. § 30103(e) (Federal Motor Vehicle Safety Standards), cited via Tennessee Formal Ethics Opinion 2018-F-166

Other opinions cited:

• ABA Formal Opinion 00-417 (2000): settlement terms limiting a lawyer's use of information
• D.C. Bar Legal Ethics Committee Opinion 335 (2006)
• Tennessee Formal Ethics Opinions 98-F-141, 2010-F-154, and 2018-F-166

See also

• ABA Formal Op. 00-417: Settlement Limits on Lawyers
• ABA Formal Op. 94-381: Restrictions on Right to Practice
• ABA Formal Op. 95-394: No Practice Bar in Gov Settlement
• ABA Formal Op. 06-444: Retirement Restrictive Covenants

Source

• Landing page: https://www.tbpr.org/ethic_opinions/formal-ethics-opinion-2025-f-171

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Formal Ethics Opinion 2025-F-171

BOARD OF PROFESSIONAL RESPONSIBILITY

OF THE

SUPREME COURT OF TENNESSEE

FORMAL ETHICS OPINION 2025-F-171

The Board of Professional Responsibility has been requested to issue a Formal Ethics Opinion regarding the ethical propriety, in a products liability case, of a non-disparagement clause in a settlement agreement which makes the lawyers in Firm A parties to the settlement agreement proposed by Firm B.

OPINION

It is improper for an attorney to propose or accept a provision in a settlement agreement that requires the attorney to become a party bound by a non-disparagement clause that prohibits the lawyer from future use of information learned during the case, which may shed a negative light on the defendants.

DISCUSSION

The inquiring lawyer has encountered a condition to settlement, in a product liability case against a certain defendant, which makes lawyers from the inquiring lawyer's law firm parties to the Settlement Agreement which includes a non-disparagement clause prohibiting them from taking any action or making any statements, verbal or written, to any third party that disparage or defame Defendants.

An immediate conflict has arisen between the client who wants the settlement funds and the inquiring lawyer's ethical concerns.

It has long been held in Tennessee that "the attorney's signature on a release should vouch only for the fact that the client releases the defendant. A requirement that a plaintiff's attorney become a party to a release might cause a conflict of interest between the plaintiff's attorney and the plaintiff in violation of DR 5-l0l(a), [Now RPC 1.7]. Therefore, these clauses are prohibited except in cases where the plaintiff's attorney releases a claim for attorney fees."[1]

Notwithstanding the earlier Tennessee Formal Ethics Opinion's guidance on this issue, there is also a basis in the Rules of Professional Conduct to find non-disparagement clauses improper in a products liability case.

Tennessee Rule of Professional Conduct 5.6 (b) says "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 client controversy."

ABA Formal Opinion 00-417 (April 7, 2000) explains the rationale for Model Rule 5.6

(b) and its Tennessee counterpart Rule of Professional Conduct 5.6 (b). The opinion explains that there is strong public policy "favoring the public's unfettered choice of counsel."[2]

Non-disparagement clauses interfere with that public policy in three ways. Such restrictive agreements limit the public's access to lawyers.[3] A second rationale for disfavoring disparagement agreements is that they are considered to be veiled attempts to "buy off' plaintiffs’ counsel.[4] Third, disparagement clauses create potential conflicts for lawyers between the interests of representing current clients and the interests of potential future clients.[5]

"Many jurisdictions concur with the ABA that settlement agreements containing indirect restrictions on the lawyer's right to practice violate those jurisdictions' respective equivalents of Rule 5.6(b)."[6]

A non-disparagement clause as part of a settlement agreement requiring the firm's lawyers to become parties would restrict the plaintiffs firm from using or discussing any information learned during the case that sheds a negative light on the Defendants, thereby indirectly restricting the plaintiffs’ counsel from informing potential clients of their experience and expertise, making it difficult for future clients to identify well-qualified counsel.

There is also a public policy consideration. A non-disparagement clause in a settlement agreement in a product liability case would deny public access to the data. "The ability for plaintiffs' firms to act as industry watchdogs is both good public policy and was specifically addressed as a vested responsibility during Congress's enactment of the Federal Motor Vehicle Safety Standards."[7] A non-disparagement clause would interfere with that responsibility to the public.

CONCLUSION

Requiring a plaintiff’s attorney to become a party entering into a settlement agreement containing a non-disparagement clause in a products liability case raises ethical concerns and creates a conflict between the interests of the plaintiff's attorney and those of their client. Consistent the Tennessee Rules of Professional Conduct and with Tennessee Formal Ethics Opinions 98-F-141 and 2010-F-154, an attorney cannot ethically agree to become a party to such agreements or clauses.

APPROVED AND ADOPTED BY THE BOARD

This 14th day of March, 2025.

Ethics Committee

Ginger Buchanan, Chair

Jimmy Dunn

Senator Richard Briggs

[1] Tennessee Formal Ethics Opinion 2010-F-154 (Sept. 10, 2010); Tennessee Formal Ethics Opinion 98-F-141 (Feb. 4, 1998)

[2] ABA Formal Opinion 00-417 (April 7, 2000).

[3] ABA Formal Opinion 00-417 (April 7, 2000).

[4] Id.

[5] Id.

[6] D.C. Bar Legal Ethics Committee, Opinion 335 (2006).

[7] Tennessee Formal Ethics Opinion 2018-F-166 citing 49 U.S.C. section 30103 (e) (2010).