Johnson Family Law, P.C. v. Bursek.
2022 COA 48. No. 20CA2043. Colo. RPC 5.6(a)—Restrictions on Right to Practice Law.
April 28, 2022
Bursek was an associate attorney at Modern Family Law (MFL). He signed a Reimbursement Agreement (Agreement) providing that if he left MFL, he would have to pay it $1,052 for each client that departed with him. When Bursek resigned from MFL, 18 clients left with him, and MFL asked Bursek to remit payment of $18,963 per the Agreement. Bursek refused, claiming the Agreement was unenforceable. As relevant to this appeal, MFL filed a complaint in district court asserting breach of contract for refusing to pay the fee. After Bursek answered the complaint, MFL filed a motion for determination of law under CRCP 56(h), requesting that the court determine whether the Agreement was enforceable. The district court found that the Agreement violated Colo. RPC 5.6(a) and is thus unenforceable, and it dismissed MFL’s breach of contract claim with prejudice.
MFL appealed the district court’s finding that the Agreement is unenforceable as a matter of law. Colo. RPC 5.6(a) prohibits agreements that directly restrict a lawyer’s right to practice. Whether a financial disincentive violates Rule 5.6(a) is assessed under a reasonableness standard according to the circumstances of each case. Whether a disincentive is reasonable depends on factors such as its effect on lawyer autonomy and client choice, the financial burden an attorney’s departure imposes on a firm, the relationship of the disincentive to harm suffered by the firm, and whether it has any colorable justifications apart from disincentivizing competition. Here, $1,052 is not an insignificant sum, especially considering that the fee was greater than half of Bursek’s semi-monthly base salary when he left MFL, and this significant restriction on Bursek’s practice is not justified in light of MFL’s commercial interests at stake. The per client financial disincentive fee unreasonably restricts Bursek’s right to practice and therefore violates Rule 5.6(a). However, a Rule 5.6(a) violation voids only the violative provision, not the entire contract. Accordingly, while the provisions imposing the per client fee are void as a matter of public policy, the rest of the Agreement remains enforceable.
The judgment was affirmed in part and reversed in part.