Can a plaintiff's lawyer agree, as part of a settlement, to broad confidentiality terms that would effectively keep the lawyer from representing other clients against the same employer?

Plain-English summary

In settling an employment discrimination case, the plaintiff's lawyer was asked to agree not to disclose any information about the settlement and its terms, about the defendant corporation's business or operations, and about the client's termination. The committee analyzed whether DR 2-108(B), which bars a lawyer from agreeing as part of a settlement to a restriction on the right to practice law, prohibits accepting these terms.

The committee drew a line. Confidentiality of the settlement terms themselves is permissible, because those terms are the client's own confidences or secrets under DR 4-101 that the lawyer already may not disclose without consent; agreeing to keep them confidential does not restrict the lawyer's practice. But a settlement term violates DR 2-108(B) if its practical effect is to restrict the lawyer from future representations by imposing conditions the lawyer's own client could not impose. The committee cited ABA and state opinions treating bans on using certain witnesses, experts, or records in future cases as prohibited indirect restrictions.

Here, the committee found the proposed confidentiality language overbroad: it would reach information about the defendant's business that is public or learnable in future representations without using the client's confidences, and "any information . . . relating directly or indirectly to" the settlement. Requiring the lawyer to keep confidential, for the opposing party's benefit, information the lawyer ordinarily has no duty to protect creates a conflict between the present client and future clients, the very evil DR 2-108(B) targets. The committee noted that such an agreement might still be legally enforceable, a question of law it did not decide, but concluded the proposed restrictions are prohibited by the Code because they are overbroad and would restrict the practice of law.

Currency note

This opinion was issued in 2000, under New York's former Code of Professional Responsibility, which New York replaced with the Rules of Professional Conduct in 2009. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a plaintiff's lawyer agree to keep the settlement terms confidential?

A: The opinion concluded yes. The settlement terms are the client's own confidences or secrets under DR 4-101, so agreeing not to disclose them does not restrict the lawyer's practice and does not violate DR 2-108(B).

Q: What makes a confidentiality term cross the line?

A: The opinion concluded a term crosses the line when it is so broad that it would bar the lawyer from using information not protected as a confidence or secret, effectively restricting the lawyer from representing future clients against the same party.

Q: Does it matter that the agreement might be enforceable in court?

A: No. The committee noted enforceability is a separate question of law, and that even an enforceable agreement can still be impermissible under the Code.

Background and rules framework

The opinion interpreted DR 2-108(B) (no settlement agreement restricting a lawyer's right to practice) and DR 4-101 (confidences and secrets) of New York's former Code of Professional Responsibility, with reference to DR 5-101(A). The Model Rule analogues are Rule 5.6(b) (no restriction on practice as part of settling a client controversy) and Rule 1.6 (confidentiality). New York replaced the Code with the Rules of Professional Conduct in 2009; the DR numbers cited here are historical.

Citations and references

Rules of Professional Conduct:

• MR 5.6(b) (restrictions on a lawyer's right to practice in a settlement); MR 1.6 (confidentiality)
• NY DR 2-108(B); DR 4-101

Cases:

• Feldman v. Minars, 230 A.D.2d 356, 658 N.Y.S.2d 614 (1st Dep't 1997), enforceability of a practice-restricting agreement

Other opinions cited:

• ABA Formal Op. 93-371 (1993) and ABA Formal Op. 00-417 (2000): purposes of the rule and indirect restrictions

See also

• NY State Bar Op. 1118: Disclosing confidences to collect a fee
• NY State Bar Op. 1103: Representing a competitor of a former client
• TX Ethics Op. 708: Settlement non-disparagement and non-disclosure

Source

• Landing page: https://nysba.org/opinion-730/