Ethics Corner Article

Dear Ethics Committee:

I represent the defendant in a sexual harassment lawsuit. We are close to a settlement, but my client has asked to include a clause in the settlement agreement that prevents the plaintiff from providing information and assistance to a plaintiff in a nearly identical lawsuit that was recently filed against my client. Something about this doesn’t sit right with me. What are my obligations under the Rules of Professional Conduct?

You are right to be concerned. New Hampshire Rule of Professional Conduct 3.4(f) provides that as a general matter, “[a] lawyer shall not . . . request a person other than a client to refrain from voluntarily giving relevant information to another party . . . .”[1] While the rule does not expressly address “non-cooperation” clauses of the sort you’ve described, it is not difficult to see how such clauses could fall within its scope. If you follow through on your client’s proposal, you will be requesting that the counterparty—“a person other than [your] client”—“refrain from voluntarily giving relevant information to another party” to currently pending litigation, i.e., the plaintiff in the other case.

Other jurisdictions that have addressed this issue have concluded that Rule 3.4(f) prohibits an attorney from requesting, during settlement negotiations, that the other party agree not to provide information to an opponent who is adverse to their client in another proceeding. E.g., Matter of Nwakanma, 397 P.3d 403, 427 (Kan. 2017) (attorney violated Rule 3.4(f) by requesting, via settlement agreement with former client, that the client “refrain from voluntarily giving relevant information in the [parallel] disciplinary proceedings”); Kentucky Bar Ass’n v. Unnamed Attorney, 414 S.W.3d 412, 418 (Ky. 2013) (attorney violated Kentucky equivalent of Rule 3.4(f) by negotiating a settlement between another attorney and the other attorney’s client in which the other attorney “agreed to refund [his] $30,000 fee in return for [the client’s] agreement to withdraw her bar complaint and to refuse to cooperate voluntarily with the [Kentucky Bar Association]”); In re Walsh, 182 P.3d 1218, 1230 (Kan. 2008) (finding Rule 3.4(f) violation where attorney conditioned settlement with individuals who brought claims against him upon their agreement to refrain from voluntarily providing testimony in disciplinary hearing).

Somewhat ironically, those decisions primarily have arisen adjacent to attorney disciplinary proceedings. There is undoubtedly a distinction to be drawn between requesting that the counterparty not cooperate with bar disciplinary proceedings and requesting that the counterparty not cooperate in ordinary civil litigation—as the Supreme Court of Kentucky put it in the Unnamed Attorney case, the attorney’s conduct there represented nothing less than an “attempt to obstruct the disciplinary process.” 414 S.W.3d at 419. But there is no reason to believe that distinction makes a difference. Rule 3.4, by its title, is intended to promote “Fairness to [the] Opposing Party,” and ABA Comment [1] to Model Rule 3.4 explains that the prohibitions of the rule, including Rule 3.4(f), secure “[f]air competition in the adversary system.” Asking a counterparty not to provide information that is potentially relevant to other litigation in which your client is involved may be construed as undermining “fair competition.”

The ethics committees of at least two other bar associations have concluded that a lawyer who asks for a settlement clause that would prevent a party “from voluntarily giving evidence to a party to litigation or a person otherwise seeking to investigate or assert a claim or defense” violates Rule 3.4(f), in the absence of a protective order or other valid confidentiality obligation. Ind. St. Bar Ass’n Legal Ethics Comm., Op. No. 1 of 2014, published in Res Gestae (July/Aug. 2014), available on Westlaw at 58-AUG RESG 18; see also IL Adv. Op. 12-10 (Ill. St. Bar Ass’n), 2013 WL 683530, *1 (citing S.C. Ethics Advisory Comm. Op. 93-20 (1993)) (“[W]hen negotiating a settlement agreement, a lawyer cannot ethically request that the opposing party agree that it will not disclose potentially relevant information to another party.”). Scholars likewise have warned about the practice, with several concluding that a lawyer can violate Rule 3.4(f) by drafting or recommending a settlement agreement that prohibits the plaintiff from sharing information with litigants in separate litigation. See Jon Bauer, Buying Witness Silence: Evidence-Suppressing Settlements and Lawyers’ Ethics, 87 Or. L. Rev. 481 (2008); see also Stephen Gillers, Speak No Evil: Settlement Agreements Conditioned on Noncooperation are Illegal and Unethical, 31 Hofstra L. Rev. 1, 15 (2002) (noting that “[n]on cooperation promises are . . . problematic under the profession’s ethics rules” and that “it would seem that a lawyer who assists a client in securing the noncooperation promise will violate Rule 3.4(f)”).

At least one justice on the Kentucky Supreme Court disagreed with the mounting consensus described above. Justice Scott noted that “confidentiality and non-cooperation provisions are customary in settlement agreements, [and] applying this rule to those agreements . . . will have unintended effects, and that the Rule as written “was not intended to apply to confidentiality and non-cooperation provisions in the context of settlement agreements.” Unnamed Attorney, 414 S.W.3d at 420 (Scott, J., concurring in part and dissenting in part). In addition, the plain language of Rule 3.4(f), in referring to “another party,” seems to expressly require the existence of pending litigation in which the client is but one of two or more parties. See Conn. Bar Ass’n, Informal Op. 2011-1 (Jan. 19, 2011) (“In the context of the rule, which distinguishes between ‘person’ and ‘party,’ ‘another party’ refers to a party to the litigation . . . which includes other plaintiffs and defendants to the litigation . . . .”). Accordingly, had your client not yet been named as a defendant in another lawsuit, it is not evident to the Committee that the Rule would be implicated. In that context, a broad and non-specific non-cooperation or confidentiality clause likely would pass muster under the Rule.

As yet, there have been no New Hampshire disciplinary decisions to directly address this issue.  However, in the specific situation you have described, your client has already been named as a defendant in the other lawsuit. Proceeding as your client has requested could be fraught with ethical risk, should the New Hampshire Supreme Court interpret Rule 3.4(f) consistent with the majority interpretations offered above. The risk-averse lawyer will exercise extreme caution before following through on that request.

[1] There is a single limited exception to this proscription where: (1) “the person is a relative or an employee or other agent of a client” and (2) “the lawyer reasonably believes that the person’s interests will not be adversely affected by refraining from giving such information.” N.H. R. Prof. Conduct 3.4(f)(1)-(2). Comment [4] to the ABA Model Rule explains that “[p]aragraph (f) permits a lawyer to advise employees of a client to refrain from giving information to another party, for the employees may identify their interests with those of the client.”

This Ethics Corner Article was submitted for publication to the NHBA Board of Governors at its April 26, 2023Meeting. The Ethics Committee provides general guidance on the New Hampshire Rules of Professional Conduct and publishes brief commentaries in the Bar News and other NHBA media outlets. New Hampshire lawyers may contact the Committee for confidential and informal guidance on their own prospective conduct or to suggest topics for Ethics Corner commentaries by emailing the Ethics Committee Staff Liaison.