Friday, April 19, 2019

Savings Grace

The Kentucky Supreme Court affirmed the dismissal of a wrongful discharge claim brought by an attorney against her former firm

Absent an employment contract, Kentucky adheres to the doctrine of employment-at-will by which an employer may terminate an employee’s employment for any or no reason. An exception to this rule exists when the termination violates public policy as expressed by the employee’s exercise of a constitutional or statutory right, which may give rise to an action for wrongful termination. In this case, Carol Greissman, a licensed attorney in Kentucky, was terminated by Rawlings and Associates, PLLC (hereinafter, “Rawlings & Associates”) for refusing to sign an agreement providing, inter alia, for nonsolicitation of Rawlings & Associates’ customers or clients following cessation of employment. Greissman’s refusal was based on her belief that the provision violated a Rule of Professional Conduct prohibiting non-competition agreements between lawyers and law firms. SCR1 3.130, Rule 5.6. The primary issue we must resolve in this case is whether the Court of Appeals erred in opining that the Rules of the Kentucky Supreme Court do not establish public policy which in turn may form a basis for a wrongful termination claim. We hold that the Court of Appeals erred in holding that Greissman’s complaint should have been dismissed for failure to state a claim, but nonetheless affirm on other grounds. The Oldham Circuit Court properly granted summary judgment in favor of Rawlings & Associates since the agreement at issue contained a savings clause which excepted the solicitation of legal work from coverage “to the extent necessary to comply with rules of professional responsibility applicable to attorneys.” Thus, we agree with the circuit court that the agreement furnished to Greissman for signature did not violate SCR 3.130, Rule 5.6 as a matter of law.

The attorney had been asked to sign the non-compete as were all other firm employees and was fired when she refused, claiming the document violated public policy

While an obligatory Rule of Professional Conduct as enacted by the Kentucky Supreme Court may qualify as public policy for purposes of a wrongful discharge claim, the professional rule must be designed to serve the interests of the public at large, rather than the sole interests of the profession. Here, SCR 3.130, Rule 5.6 is designed to protect society at large by allowing clients to freely choose counsel who can best represent their interests and by not limiting an attorney’s right to practice law. We believe the rule represents a fundamental and clear statement of public policy.

Saved by the savings clause

While we disagree with the Court of Appeals’ decision that Greissman’s complaint should have been dismissed for failure to state a claim, we nevertheless affirm because we agree with the circuit court’s grant of summary judgment in favor of Rawlings & Associates. On its face, the savings clause applies only to restrict Greissman’s ability to solicit non-legal business; it exempts the solicitation of legal work from coverage under the non-solicitation clause, expressly noting that the signor does not agree to those terms to the “extent necessary to comply with the rules of professional responsibility applicable to attorneys.” Unambiguously, the signor agrees not to solicit Rawlings’ non-legal business; the savings clause does not apply to the solicitation of legal work since that would violate the Rules of Professional Conduct. Indeed, the savings clause expressly recognizes that the Rules of Professional Conduct govern if any conflict exists between them and the agreement. Since the plain language of the savings clause excludes any interpretation of the agreement that conflicts with the Rules of Professional Conduct, the agreement did not violate SCR 3.130, Rule 5.6.

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2019/04/the-kentucky-supreme-court-absent-an-employment-contract-kentucky-adheres-to-the-doctrine-of-employment-at-will-by-which-an.html

| Permalink

Comments

Post a comment