In-house attorneys in Ohio cannot be bound by noncompete agreements over practicing law with another competitor. However, they can be barred from having business responsibilities at a competing company.

Earlier this month, the Ohio Board of Professional Conduct wrote in a nonbinding opinion that "a lawyer may not ethically agree to an employment contract with a covenant not to compete that will restrict his or her future legal practice after separation of employment" because it goes against Ohio Rule of Professional Conduct 5.6 (a).

"An agreement that restricts the right of a lawyer to practice after leaving employment limits the professional autonomy of the lawyer and the ability of clients to choose their lawyer," the board wrote in the opinion.

Although in-house attorneys cannot be barred from conducting legal services at a competitor, they can be stopped from performing business functions. It says that a lawyer considering signing a noncompete agreement should not apply for a position that has both legal and business responsibilities.

"It may have the impact of limiting the ability to work as a corporate counsel at another company if that other position is both legal and business in nature," Jeffrey Smith, a partner at Fisher & Phillips in Cleveland, said in an interview.

Allan Asbury, senior counsel at the Ohio Board of Professional Conduct, said the request to look at the topic came from an in-house attorney who was either looking to change companies or was contemplating entering into a noncompete agreement. Although the opinion is not legally binding, judges have cited opinions from the board as being persuasive in their decisions, Asbury said.

The American Bar Association has a formal opinion on law firm attorneys not being bound by noncompete agreements. However, the ABA has not yet weighed in on how in-house counsel should handle noncompete agreements.

Ohio is the latest state to issue an opinion in the case of in-house attorneys and noncompete agreements. Connecticut, New Jersey, Pennsylvania, South Carolina, Virginia, Washington and Washington, D.C., have issued opinions indicating that restrictive covenants with in-house attorneys are unenforceable.

Smith said it is likely that more states will follow suit and issue similar opinions in the future.

"The model rules that apply to lawyers are used nationwide," he said. "Because we're using similar rules I think similar conclusions about the application of those rules could spread pretty quickly."