Washington Lawyer - July/August 2021 - 38

TAKING THE STAND
D.C.'s Non-Compete
Ban: Little Effect on Lawyers
By Alan D. Strasser
T
he District of Columbia
recently enacted the Ban
on Non-Compete
Agreements Amendment
Act of 2020 (Non-Compete 2020),
which prohibits virtually all noncompete
clauses in agreements
and workplace policies, including
anti-moonlighting provisions.
While this new law will affect
almost every employer in the
District, its impact on D.C. law
firms should be modest because
existing rules of legal ethics will
mitigate the broader reach of
the act.
For one, the D.C. Rules of Professional Conduct
already require lawyers who work for multiple
law firms to comply with Rules provisions on
conflicts of interest. Furthermore, the Rules
forbid most of what the act prohibits for subsequent
employment by disallowing agreements
that restrict the right to practice, except under
limited circumstances.
However, Non-Compete 2020 will likely eliminate
the prohibitions that firms currently use to
prevent outside affiliations for their lawyers as
a risk mitigation practice, which we will explore
here.
A SYNOPSIS OF THE ACT
First, what does Non-Compete 2020 require?
The new law applies to every employer and
employee in Washington, D.C., with minor
38 WASHINGTON LAWYER * JULY/AUGUST 2021
exceptions not relevant to law firms.1
Section
102 of the act prohibits any employer from
requiring an employee to sign an agreement
containing a non-compete clause (except in
connection with the purchase or sale of a
business) and prohibit any " workplace policy "
that forbids moonlighting - that is, no workplace
policy can forbid an employee from " (1)
[b]eing employed by another person; (2) [p]
erforming work or providing services for pay
for another person; or (3) [o]perating the
employee's own business. " The prohibition
applies to all workplace polices, " whether
written or as a matter of practice. " The new act
thus forbids outright prohibitions on simultaneous
or subsequent employment.
Non-Compete 2020 renders offending agreements
and policies unenforceable and forbids
retaliation against any employee who refuses
to sign an offending agreement or to comply
with a prohibited workplace policy. It contains
various enforcement and notice provisions. The
act contains no provision repealing or superseding
existing D.C. common law or substantively
modifying any other statute, so all other
laws remain in force.2
THE IMPACT ON LAW FIRMS
Conflicts of Clients and Issues. While NonCompete
2020 may force a law firm to discard
workplace policies that forbid simultaneous
employment, the Rules already make it hard for
a lawyer to associate with more than one firm.
Rule 1.10 (Imputed Disqualification) provides
that one lawyer's clients are attributed to all the
other lawyers in the firm: " a firm of lawyers is
essentially one lawyer for purposes of the Rules
governing loyalty to the client. " The same
attribution rule applies to any other firm with
which the lawyer is associated. A lawyer's
representation of a client in the lawyer's own
personal firm or another firm is still attributed
to the original firm, and the lawyer cannot take
on the matter unless it passes the conflictchecking
process in every firm with which
the lawyer is associated. As D.C. Legal Ethics
Opinion 338 puts it, ''the lawyer's 'of counsel'
relationship with both firms effectively makes
the two firms a single firm for conflict-ofinterest
purposes.''
Non-Compete 2020 means that a law firm
cannot avoid multiple conflicts by adopting
a policy (or insisting on an agreement) that
completely prohibits a lawyer from handling
a matter for himself or another law firm. But a
law firm can - indeed it must - insist that all
its lawyers comply with the ethics rules, and
that includes making it possible for a firm to
conduct conflicts checks. The firm should
require all lawyers to disclose accurate,
complete, and timely information about any
moonlighting project the lawyer proposes to
undertake. If the lawyer proposes to associate
with another law firm to handle a matter, the
original firm must require the lawyer to obtain
the entire client list from the separate firm since
representation of those clients will now also be
attributed to the original firm.3
The same analysis applies to the avoidance
of issue conflicts, where the position a lawyer
takes in one case for one client damages the
position of another client in a different case.4
While Non-Compete 2020 does not allow the
firm to prohibit the lawyer from working for
another firm, it can adopt the same solution
as with client conflicts. The original firm has
to require its lawyer to disclose any positions
taken on behalf of an outside client that may
conflict with positions taken by firm clients.
When the lawyer merely wants to handle
a single case with another firm, it may be
possible to avoid some bilateral conflict attribution
if the lawyer is not " associated " with the
second firm under Rule 1.10. While there are
several other requirements to avoid being
" Taking the Stand " appears periodically
in Washington Lawyer as a forum for
D.C. Bar members to address issues of
importance to them and that would be
of interest to others. The opinions
expressed are the author's own. For
submissions, email editorial@dcbar.org.
Washington Lawyer - July/August 2021

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