A law firm can terminate an at-will lawyer who refuses to sign an agreement prohibiting them from soliciting the firm’s customers or clients following cessation of employment, according to the Supreme Court of Kentucky. In Greissman v. Rawlings and Associates, PLLC, the court held that where a non-solicitation agreement included a savings clause which excepted the solicitation of legal work from where “to the extent necessary to comply with the rules of professional responsibility applicable attorneys,” it did not violate those rules as a matter of law. This is consistent with what we have previously written on this issue; so long as there is no restriction on the practice of law, post-employment restrictive covenants do not necessarily run afoul of states’ Rules of Professional Conduct (in most states, Rule 5.6, which is generally intended to protect clients, not attorneys).
Following her termination for refusing to sign a non-solicitation agreement, Carol Greissman sued her former firm for wrongful termination in violation of public policy. The agreement furnished by the firm to Greissman explicitly included a carve-out for legal work:
Non-Solicitation. Except to the extent necessary to comply with the rules of professional responsibility applicable to attorneys, I agree that for as long as I am employed and for three (3) years following termination of my employment, for any reason, I will not, without the prior written consent of Rawlings & Associates: (i) solicit, contact, interfere with, or attempt to divert any customer served by Rawlings & Associates, or any potential customer (defined as a prospective customer who was solicited by Rawlings & Associates within 5 years); or (ii) solicit any person then or previously employed by Rawlings & Associates to join me, whether as a partner, agent, employee, or otherwise, in any enterprise engaged in a business that competes with business engaged in by Rawlings & Associates at the time my employment ceases.
(Emphasis added). Greissman argued that she refused to sign the agreement based on her belief that it violated Kentucky Supreme Court Rule 3.130 (Rule of Professional Conduct 5.6), which generally prohibits an attorney from restricting her right to practice law after leaving her employer.
Following the commencement of the suit, the firm moved to dismiss Greissman’s complaint on the grounds that Rule 3.130 is not a public policy embodied in a statutory or constitutional provision. Like most states, Kentucky recognizes a narrow public-policy exception to the terminable-at-will doctrine where an employee shows that the termination was contrary to public policy evinced by a constitutional or statutory provision. The trial court denied the firm’s motion, holding that the Rule does indeed fall within the public policy exception. The firm then answered Greissman’s complaint and moved for summary judgment on liability, arguing that the savings clause in the agreement removed it from the purview of Rule 3.130 because the agreement only restricted the disclosure of confidential information and the solicitation of non-legal business—it did not restrict her ability to practice law. The trial court granted the firm’s motion, holding that while Greissman had a cognizable claim, the agreement did not violate the Rules of Professional Conduct because the savings clause would have protected her from any violation of the Rules had she signed it. The court further held that Greissman’s belief that the agreement violated the Rules did not save her wrongful termination claim.
On appeal, the Kentucky Court of Appeals upheld the trial court’s dismissal of the suit, but held that the trial court should have granted the firm’s motion to dismiss because the Rules of Professional Conduct are not constitutional or statutory provisions. The Supreme Court of Kentucky, however, overruled the Court of Appeals holding that for purposes of wrongful termination actions, an obligatory Rule of Professional Conduct for attorneys carries equal public policy weight as any public policy set forth in Kentucky’s constitution or in a statute enacted by its legislature. Nevertheless, the court affirmed the dismissal of her complaint because “[o]n 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.’”