As previously discussed on this blog, non-compete agreements are generally unenforceable against lawyers. This prohibition is expressly discussed in Rule of Professional Conduct 5.6, because it “not only limits [attorneys’] professional autonomy but also limits the freedom of clients to choose a lawyer.”
But does Rule 5.6 equally apply to in-house lawyers? In most states, the answer is a qualified yes.
The American Bar Association, along with several other jurisdictions (e.g., New Jersey, New York) have addressed this issue and have concluded that the Rule 5.6 prohibition on restrictive covenants generally applies to lawyers who are employed as in-house counsel.
That said, a lawyer would still be bound by Rule 1.6 (confidentiality) and Rule 1.9 (conflicts of interest), so a move to a competitor may yet still be prohibited by those ethics rules. In addition, some states have held enforceable, restrictive covenants containing a so-called “savings clause,” which state that the restrictive covenant is enforceable only to the extent allowed under Rule 5.6. Lastly, a non-compete prohibiting an in-house lawyer from working for a competitor in a non-legal, business role may also be enforceable.
In short, an employer generally cannot restrict its in-house counsel from taking an in-house legal position at a competitor.