N.Y. Supreme Court rules Nixon did not raid Taylor partners

Daily Record (Rochester, NY), Sep 18, 2008 by Elizabeth Stull

A court decision handed down Tuesday upholds a lawyer's freedom to practice law with the firm of his or her choice.

In a lawsuit between two international law firms, a non- solicitation clause was found unenforceable because it violates New York's public policy, a state Supreme Court justice in Monroe County has ruled.

The law firm Taylor Wessing France had accused Nixon Peabody LLP of raiding its Paris office and stealing 12 non-equity partners after merger talks disintegrated last year. After hearing oral arguments on competing summary judgment motions, Justice Kenneth R. Fisher found in favor of Nixon Peabody on all claims.

The two firms had signed a "Mutual Non-Disclosure" agreement with a non-solicitation clause when merger talks began in July 2007. Under the agreement, neither firm could solicit or hire attorneys from the other for a two-year period.

Merger talks had ended by November, when Taylor Wessing Managing Partner Arnaud de Senilhes canceled the agreement. He subsequently decided to defect to Nixon Peabody and invited a dozen of the office's 14 non-equity partners to join him. Nixon Peabody was accused of aiding and abetting de Senilhes' breach of fiduciary duty to Taylor Wessing.

A professional disciplinary rule, DR 2-108(A); 22 N.Y.C.R.R.[section]1200.13(a), expressly prohibits law firms, partnership or employment agreements from restricting the practice of law. Judge Fisher's decision states that "the express terms of the Disciplinary Rule are not meant to delimit the reach of public policy addressed by that rule."

In addition to the rule, Judge Fisher cited case law led by Cohen v. Lord, Day & Lord, 75 N.Y.2d 95 (1989) and several treatises on professional ethics.

"This case, in the court's opinion, involves an 'out-right prohibition on the practice of law,'" Judge Fisher wrote.

He also noted that the younger lawyers, described as non-equity partners at Taylor Wessing, had no part in the agreement and no knowledge of it.

Regarding the "anti-raiding covenant," Judge Fisher also cited Jacobs v. Norris, McClaughin & Marcus, 128 N.J. 10, 607 A.2d 142 (1992), which held as against public policy a contractual provision prohibiting departing lawyers from inviting other firm employees to join them.

Judge Fisher noted that French law might govern the question of de Senilhes' alleged breach of fiduciary duty, but the issue was briefed only in terms of New York law -- and under state law, there was no breach of duty.

A departing law partner can "'discuss ... a joint move to another firm' with a fellow partner," the court wrote.

There was no evidence of confidential information, improper client solicitation or recruitment of staff employees. Taylor Wessing conceded at oral argument that the firm held its non-equity partners out to the public as partners of the firm.

"Under New York law, the solicitation of at will employees by a departing employee, prior to the time of departure, will not amount to a breach of fiduciary duty, unfair competition, tortuous interference with contractual relations, or tortuous interference with prospective economic advantage, ... unless the departing partner's actions [were committed] 'in a plan deliberately designed to destroy his employer's business,'" Judge Fisher wrote, citing four different cases.

Since French law required the departing attorneys to give Taylor Wessing three- and six-month notice periods to recover from the departures, Judge Fisher found that "de Senilhes could not have precipitously engineered a mass exodus likely to cripple TWF's business."

Even if de Senilhes breached his duty, Nixon Peabody established that no one at the firm was aware of it, Judge Fisher concluded.

"We are pleased that the judge was able to see through these unfounded claims," said Richard F. Langan Jr., Nixon Peabody managing partner and CEO.

Nixon Peabody was represented in court by Rochester attorney Michael Wolford of The Wolford Law Firm and Philip Forlenza of Patterson, Belknap, Webb & Tyler LLP.

Attorneys Marc Dreier and Amianna Stovall of Dreier LLP and Rochester attorney David Rothenberg represented Taylor Wessing on the summary judgment motion.