Biden’s Competition Order To Affect Legal Industry Marginally

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Professor Bruce Green shared his expert opinion with Law360 on President Biden’s executive order that calls to limit or ban noncompete agreements and the effect on the legal industry.

A key element in the executive order President Joe Biden signed last week to create a more competitive marketplace is a call to limit or ban noncompete agreements, which some say unfairly limit competition and workers’ mobility, and depress wages.
In his 31-page executive order announcing sweeping actions by more than a dozen federal agencies, Biden “encouraged” the Federal Trade Commission “to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.”
But while the executive order is expected to boost a nationwide movement to restrict such agreements across sectors, Biden’s initiative is unlikely to have a big impact on the legal industry, legal experts say. The reasons are both ethical and practical.
Noncompete agreements typically limit where a person can work after leaving a company. But the ethics rules governing the legal profession generally prohibit attorneys from signing such agreements. In Rule 5.6, the American Bar Association says attorneys should not sign agreements that restrict where they work after leaving a firm.
Bruce Green, a legal ethicist and professor at Fordham University School of Law, said Rule 5.6’s prohibition on noncompete agreements generally applies to in-house lawyers, “at least if they are employed in whole or part as a lawyer.”
But the rule doesn’t apply to paralegals or other nonlawyers who work for law firms or corporate legal departments, because the rule applies only to restrictions on “the right of a lawyer to practice” law, Green said.

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