Summary Decision of the Month: Attorney Noncompete Clauses

The Court of Appeals addressed confidentiality and no solicitation agreements within the context of legal employment for an attorney.  This appeal in  Greissman v. Rawlings and Associates, PLLC  arose from an action in which appellant alleged that she was wrongfully terminated by her employer when she refused to sign a Confidentiality and No Solicitation Agreement that she believed was prohibited by the Kentucky Bar Association Ethics Rules, specifically SCR 3.130 (5.6). The circuit court granted summary judgment and dismissed appellant’s complaint, which she challenged on appeal. The employer filed a cross-appeal from an earlier order denying its motion to dismiss. The Court of Appeals held that the circuit court erred as a matter of law in denying the employer’s motion to dismiss, which mooted the appeal from the final judgment.

The dispositive issue addressed whether SCR 3.130 (5.6), which prohibits an attorney from agreeing to restrict his or her rights to practice after leaving an employer, supported a wrongful termination claim arising from a violation of public policy. The Court held that the public policy exception to Kentucky’s terminable-at-will doctrine addressed in Grzyb v. Evans, 700 S.W.2d 399 (Ky. 1985) is limited to public policy created in constitutional or statutory provisions – not public policy set forth in the Supreme Court Rules; therefore, the circuit court erred in denying the motion to dismiss. Because the circuit court later dismissed the complaint on other grounds, its judgment was affirmed. In his separate opinion concurring in result only, Judge Maze urged the Supreme Court to consider this issue because it places attorneys in the untenable position of either having to sign an agreement in contravention of Rule 5.6 or facing termination with no legal remedy. Judge Maze opined that Kentucky’s Rules of Professional Conduct create enforceable public policy in this area equal in weight to public policy created in the Constitution or statutory provisions. He further argued that the Supreme Court has the exclusive power to make disciplinary rules for its members and that the legislature has no authority to set public policy in this field.

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Here are individual summaries prepared by the AOC organized by legal topics this months PUBLISHED decisions only.

For a list of all archived monthly summaries, please click here for those at the AOC web site and click here for those posted here on this blog.

Please note some of these published decisions may have pending motions for discretionary review so you are cautioned to confirm finality of disposition by going to the AOC’s web site.