As we recently highlighted, trade secret misappropriation lawsuits brought by law firms against departing attorneys are not a new phenomenon, but the number and intensity have increased over recent years.
Our last article addressed several trade secret lawsuits that sought monetary damages, but not injunctive relief limiting the attorneys' ability to work. But can law firms in fact seek injunctive relief against former attorneys, prohibiting them from working with their former clients?
The American Bar Association (ABA) Standing Committee on Ethics and Professional Responsibility has consistently advocated for a client's choice of counsel, regardless of whether the attorney changes firms. To that end, the ABA released Formal Opinion 489 in 2019, which provided guidance regarding ethical obligations when lawyers change firms. According to that guidance, although firms may require resignation notice periods, the client's interest may not be affected by the notice period. Simply put, "[t]he ethic rules do not allow non-competition clauses" for attorneys.
Notwithstanding this guidance, the ethical rules focused on non-competition clauses are silent as to trade secret lawsuits. Formal Opinion 489 recognizes the need for firms and departing attorneys to work together before and after the attorney's departure to provide seamless client service. But if a client has not directed the departing attorney to move its legal work, the ethical rules seem to make clear a trade secret claim...
Israeli citizen Ilit Raz pled guilty to securities fraud charges in the US after she was found to have defrauded investors of around $27 million by misleading them about the core aspects of a comp...