Tuesday, November 28, 2006

New Jersey Ethics Opinion on In-House Lawyers Signing Non-Competes Leaves Me Puzzled

David Hricik (Mercer, right, and I swear that's the picture on his bio page!) over at Legal Ethics ForumHricik2_1 had a brief note on a recent New Jersey ethics opinion.  The opinion (if not Professor Hricik's picture - one assumes it was taken in connection with "International Talk Like a Pirate Day") is worth at least a little bemused puzzlement.

The question is whether it is ethical for an employer to require an in-house lawyer to sign what looks to me like the fairly standard employment non-disclosure agreement, which in this case, also includes the fairly standard non-compete clause.  (Let's assume the non-compete is otherwise enforceable in terms of geography and time.)

1.  The question itself, it seems to me, is problematic:  "whether an employer's request that its in-house counsel execute restrictive covenants. . .violates the Rules of Professional Conduct."  I can see that if I were the general counsel and a member of the New Jersey bar, my request to another lawyer would fall within the ambit of the RPC.  But if I am the general counsel, and the agreement is presented to me by the Senior Vice President of Human Resources (after approval by the CEO and the Board of Directors), how are the lawyers' professional rules in any way incumbent on these non-lawyers?

2.  The opinion says "it is conceivable that an in-house lawyer could obtain confidential information and/or trade secrets which would not be protected by RPC 1.6 or the attorney-client privilege.  Therefore, it may be reasonable for a corporation to request its lawyers to sign a non-disclosure or confidentiality agreement, provided that it does not restrict in any way the lawyer's ability to practice law or seek to expand the confidential nature of information obtained by the in-house lawyer in the course of performing legal functions beyond the scope of the RPCs."  I do not understand this at all.  I knew lots of stuff at Great Lakes that undoubtedly came to me other than in my capacity as a lawyer.  It has to be reasonable to expand the definition of confidential information beyond that which I learn in the course of giving legal advice.  If the impact is that I may not be able to be the general counsel for my direct competitor, why should I get a pass, as a lawyer, that other senior executives don't get?

3.  The opinion says that the "assignment of inventions" clause does not impact any ethical considerations.  That may be, but what if you design, on the company's time, a neat system for monitoring outside counsel?  Or develop your own store of Sarbanes-Oxley flow charts that you use in explaining the requirements of the law to the board of directors?  Are those "designs, processes or know-how" (patentable or not), and thus the sole property of the Employer?

[Jeff Lipshaw]

http://lawprofessors.typepad.com/legal_profession/2006/11/new_jersey_ethi.html

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Comments

The picture is a bit dated: I now have a short beard.

Posted by: David Hricik | Nov 28, 2006 10:04:26 AM

Ah, but you look mahvelous.

Posted by: Jeff Lipshaw | Nov 28, 2006 1:58:54 PM

It's always better to look good than to feel good, if you know what I mean.

Posted by: Alan Childress | Nov 28, 2006 7:48:53 PM

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