Concept
The Rule 5.6(b) Prohibition
Settlement agreements restricting a lawyer's right to practice (Rule 5.6(b))
Settlement Restrictions on Practice
The Rule 5.6(b) Prohibition
Model Rule 5.6(b) forbids a lawyer to “participate in offering or making” an agreement “in which a restriction on the lawyer's right to practice is part of the settlement of a client controversy.”1 The same lead-in governs paragraph (a), which covers partnership, employment, and similar agreements.2 Because the command is addressed to the lawyer's own participation, a signed contract is only one way to violate it.
A violation requires three things: conduct (participating in an offer or an agreement), a term (a restriction on the right to practice), and a setting (the settlement of a client controversy). The next section explains why the rule exists; this unit takes the three elements in order. Conduct comes first because it fixes when a lawyer's own discipline is at stake, and that moment can arrive before anyone signs anything.
Offering or Making
Offering and making are different acts, and the rule punishes both. A lawyer makes an agreement only when the other side accepts; a lawyer offers a term simply by putting it forward. Because the rule bars participating in “offering or making” a restrictive agreement,3 a lawyer who proposes such a term is exposed to discipline even when opposing counsel properly refuses it and no agreement is ever made. The lawyer's exposure does not depend on how the other side responds.
A refused offer still counts because of what the proposal does to the lawyer who receives it. By proposing the limitation, the offering lawyer encourages opposing counsel to violate the ethics rules and forces that lawyer to explain to the client why the term is illegitimate.4 That harm exists once the term is spoken, whatever answer comes back. Were the rule limited to completed agreements, a lawyer could float a restriction and risk nothing worse than a refusal; reaching offers removes that incentive. And because the rule speaks to any lawyer who participates, neither lawyer at the table can treat the restriction as the other's problem.
Exam stems on this point usually ask which lawyer has violated the rule after the term has been rejected, and the answer turns on what each lawyer did with the term.
Each lawyer's conduct is judged on its own. The lawyer who drafted and tendered the clause participated in an offer; the lawyer who struck it and advised the client participated in neither an offer nor an agreement. A plaintiff's lawyer who signed the settlement with the clause intact would have participated in making the agreement, so the rule reaches the acceptor as well as the proposer.
Florida Bar v. St. Louis shows how such a demand can surface in an ordinary negotiation. Facing the trial judge's anticipated written order, DuPont actively sought to settle all twenty Benlate cases.5 During the discussions, DuPont asked the firm to stop representing any Benlate plaintiffs as a condition of settlement, and at various points it raised the idea of the firm bringing no future Benlate cases. The firm at first refused to discuss such an “engagement agreement,” then researched rule 4-5.6(b) of the Rules Regulating the Florida Bar, which tracks the Model Rule's wording.6 The request came across the table in conversation, more than once, before any agreement existed. A lawyer who carries a request like that into a negotiation participates in an offer at that moment, whatever answer comes back.
Restricting the Right to Practice
The second element asks what kind of settlement term is “a restriction on the lawyer's right to practice.”8 The rule lists no forbidden clauses, so the answer comes from what a term does. The plain case is a term that precludes the lawyer from later representing other clients against the same party or on the same type of claim.9 Such a term leaves the lawyer's license intact and most of the practice open. What it removes is the slice of work where the lawyer's experience is most useful to other claimants. The rule protects the choice of those claimants, including their access to a lawyer who built experience by handling similar claims or claims against a particular party.10
Because the harm is measured by who becomes unavailable to future clients, a restriction need not be a total ban on practice. If only complete bans counted, an opponent could win the same benefit with a narrower clause aimed at its own claim type, and the rule would be easy to draft around. The same logic reaches wording that never mentions representation.
In Feldman v. Minars, a settlement provided that the plaintiffs' firm would not “assist or cooperate” with other parties or attorneys in other actions against the settling defendants.11 The clause did not say the firm could never represent another plaintiff. The court nonetheless read it to cover representation, because a firm barred from doing anything to assist or cooperate with others in such actions is barred, with even greater reason (a fortiori), from representing them.12 Representing a litigant is a larger form of help than cooperating with that litigant's lawyer, so the narrower words swallow the broader conduct. The court added that a strong case could be made that such a provision is an impermissible restraint under DR 2-108(B) of New York's Code of Professional Responsibility, which provided: “In connection with the settlement of a controversy or suit, a lawyer shall not enter into an agreement that restricts the right of a lawyer to practice law.”13 That discussion arose under the old Code rather than the Model Rules. Separate promises not to solicit raise a different question, taken up below.
The word “restrict” supports the same breadth as a matter of ordinary reading. The dissent in Howard v. Babcock objected to the view that California's rule 1-500 bars only agreements to refrain altogether from practicing. Its reasoning was that to restrict means to restrain or confine within bounds, while to prohibit means to prevent or forbid, so the two words are not synonymous and a rule aimed at restrictions reaches limits short of a total ban.14 Read that passage with its limits in mind: it is a dissent, and it concerned a partnership noncompetition covenant under California's own rule, not a settlement under Rule 5.6(b).15 The Model Rule uses the noun “restriction,” so the same textual argument is available as persuasive reasoning, though it is not a holding about Rule 5.6(b).
An exam stem will rarely label the clause a restriction. The usual task is to look past the drafter's wording and ask what the term does to the pool of lawyers available to future claimants. A promise to “cooperate with no one” fails that test as surely as an express promise not to represent, while payment, release, and dismissal terms never reach the lawyer's future clients at all.
Part of a Client Settlement
The third element comes from the closing words of Rule 5.6(b): the restriction must be “part of the settlement of a client controversy.”17 Those words confine the rule to one setting, a dispute in which the lawyer represents a client and the resolution of the client's claim is the occasion for the restriction. A restriction that surfaces elsewhere falls outside this element, and a settlement containing no restriction never engages it. For any suspect term, ask what it is attached to.
The setting matters because a settlement is where a lawyer's future practice can be traded. The client's claim gives the other side something to pay to resolve, and the people who would lose access to the lawyer, future claimants, are absent from the negotiation.18
The facts of St. Louis show the element in operation. DuPont sought to settle all twenty Benlate cases, and during the settlement discussions it asked the firm to cease representing any Benlate plaintiffs “as a condition of the settlement.”19 The package for the clients had its own structure. The negotiations produced a $30 million settlement for the Davis case. DuPont's offers were irrevocable for sixty days and were contingent on vacating and sealing the order striking its pleadings, on actual settlement of the Davis case and of another case brought by Fred Haupt, and on confidentiality of the figures. A “hold back” provision kept ten percent of each client's settlement funds in escrow for two years, to be forfeited to DuPont if confidentiality were breached.20
Those facts show how a practice restriction rides on a client settlement. DuPont raised the demand about the firm's future practice in the same negotiation that fixed what the twenty clients would be paid, and the client offers were bound to one another by contingencies. The excerpt assigns no price to the demand itself. What DuPont sought was the firm's availability to later Benlate claimants, who were not at the table.
A client settlement without a restriction does not violate the rule, and a restriction without a client settlement belongs to a different paragraph. A covenant in a partnership, employment, or similar agreement that limits a lawyer's practice after the relationship ends is governed by paragraph (a), not (b), because no client controversy is being settled; a later section compares the two.21 On an exam, locate the restriction first, then ask whether it appears as part of resolving a client's claim. A bare release, payment, and dismissal never reach the lawyer's future practice, while a practice term bargained alongside those items does.
Jurisdictions phrase the settlement trigger differently, so check the text that governs. The version of Model Rule 5.6 quoted in Howard v. Babcock reaches a restriction that is part of “the settlement of a controversy between private parties.”22 California's rule 1-500, as quoted in the same opinion, reaches an agreement “whether in connection with the settlement of a lawsuit or otherwise,” so it is not confined to settlements.23 Florida's rule, quoted in St. Louis, uses the Model Rule's present wording, “client controversy,” which is the formulation this chapter applies.24