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Non-Solicitation Agreement During Merger Talks May Be Useless
When firms enter into merger discussions, the smaller firm may wish to protect itself with a non-solicitation agreement to prevent the larger firm from using the merger negotiation as a pretext for poaching members of the smaller firm. In a case arising from a failed law firm merger, a New York judge ruled last week that non-solicitation agreements, though common, are unenforceable because they restrict the right of lawyers to work where they want. Judge Kenneth Fisher ruled that a non-solicitation agreement entered into in 2007 between legal behemouth, Nixon Peabody and a smaller law firm, Taylor Wessing, was unenforceable. The two firms agreed not to hire from each other for two years. After the merger negotiations collapsed, Nixon Peabody hired a dozen Taylor Wessing partners.Labels:
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