The recent decision of the Colorado Supreme Court in Johnson Family Law P.C. v. Bursek, 2024 CO 1, ¶¶ 17-9, 2024 WL 159107, *5, clarifies the ethical prohibition against lawyers' participation in offering or making covenants not to compete as restrictions on the right to practice. In this decision, the Supreme Court concludes that the prohibition in Colo.R.P.C. 5.6 against lawyers' participation in offering or making a covenant not to compete (or other restraint on practice) is a statement of Colorado public policy. As such, the Court holds that a contract between a lawyer and the lawyer's former firm requiring the lawyer to reimburse the firm for about $1,000 in "costs" when the lawyer leaves the firm and takes a client is void as against public policy and is therefore unenforceable.
Increasingly, in-house counsel are being asked to sign covenants not to compete. Although Johnson Family Law P.C. does not involve in-house counsel, it is an important reminder that such agreements are likely to be void for in-house counsel, and a lawyer should neither sign them nor ask another lawyer to do so. See the full decision here - Johnson Family Law PC v Bursek.rtf.
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