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Keywords

plaintiffdamagesattorneymotionpatenttrade secretobjection
defendantjurisdictiondamagesattorneystatuteappealpleamotionsummary judgmentcorporationcommon lawmotion to dismissmotion for summary judgment

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Parker v. M & T Chemicals, Inc., 236 N.J.Super. 451, 566 A.2d 215, 58 USLW 2342, 4 IER Cases 1766

Facts

The plaintiff, a former Director of Patents at M & T Chemicals, was demoted to Assistant General Patent Counsel after he objected to the company's plan to use confidential documents containing trade secrets from a competitor. Despite receiving favorable evaluations, he faced retaliation for his objections, including a demotion and a hostile work environment that led to his constructive discharge. The plaintiff filed a complaint under CEPA, seeking damages for the alleged retaliatory actions taken against him.

We relate here in detail the allegations of the complaint, filed on August 8, 1988, which the Law Division judge ruled was sufficient to overcome a motion to dismiss for failure to state a claim upon which relief can be granted. A motion under this rule, unlike a motion for summary judgment, R. 4:46, is based on the pleadings. “A complaint should not be dismissed under this rule where a cause of action is suggested by the facts and a theory of actionability may be articulated by way of amendment.” Rieder v. State Dept. of Transp., 221 N.J.Super. 547, 552, 535 A. 2d 512 (App.Div.1987).

Issue

Whether an in-house attorney can maintain a claim under the Conscientious Employee Protection Act for retaliatory discharge and seek monetary damages.

We granted leave to appeal in this matter, R. 2:2–4, to examine the question whether an in-house attorney may maintain an action under the Conscientious Employee Protection Act (Act), N.J.S.A. 34:19–1 to 34:19–8, commonly called the “Whistle Blower's Act,” consistent with the Code of Professional Ethics adopted by the Supreme Court in the exercise of its exclusive authority to regulate the practice of law.

Rule

The Conscientious Employee Protection Act prohibits retaliatory actions against employees who disclose or refuse to participate in activities they reasonably believe violate the law or public policy.

The Act defines an “employer” as any corporation or any person or group of persons acting directly or indirectly on behalf of or in the interest of an employer with the employer's consent. N.J.S.A. 34:19–2(a). An “employee” means any individual who performs services for and under the control and direction of an employer for wages or other remuneration. N.J.S.A. 34:19–2(b). A “supervisor” is generally any individual with control over the affected employee who has authority to take corrective action regarding the illegality of which the employee complains. N.J.S.A. 34:19–2(d). “Retaliatory action” means the discharge, suspension or demotion of an employee, or other adverse employment action taken against an employee in the terms and conditions of employment. N.J.S.A. 34:19–2(e).

Analysis

The court analyzed the application of CEPA to the plaintiff's situation, emphasizing that the Act does not conflict with the ethical obligations of attorneys. It determined that the plaintiff's allegations of retaliation for refusing to engage in unethical conduct fell within the protections of CEPA, allowing him to seek damages without requiring reinstatement.

In the case before us, we find that the “force of the statute” can be accommodated to the allegedly conflicting ethical principle. Defendants also rely on two cases from other jurisdictions which refused to recognize an attorney's cause of action for wrongful or retaliatory discharge at common law, where the state legislatures had not adopted “whistle-blower” statutes. The claims presented in these cases did not, of course, call upon the courts to consider the constitutionality of a state statute.

Conclusion

The court affirmed the lower court's decision, allowing the plaintiff's claim to proceed under CEPA and holding that in-house attorneys are protected from retaliation for refusing to participate in illegal activities.

We find no constitutional or practical necessity to declare the Conscientious Employee Protection Act unconstitutional insofar as an in-house attorney's claims for money damages and fees arising from wrongful retaliation during the in-house employment relationship are concerned. The order refusing to dismiss the complaint is affirmed.

Who won?

The plaintiff prevailed in the case because the court found that his claims under CEPA were valid and that the Act protects in-house attorneys from retaliatory actions.

The court's final decision or holding in 1–2 sentences.

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