145 Ill.2d 492, 584 N.E.2d 104
Roger Balla served as in-house counsel for Gambro, Inc., a distributor of kidney dialysis equipment manufactured by its affiliate Gambro Germany.1 Balla's employment agreement from March 1980 designated him as director of administration responsible for legal matters and personnel.2 In August 1983, after the manager of regulatory affairs departed, Balla assumed those duties as well, with his compensation increased and his title reflecting the combined roles of director of administration, general counsel, and manager of regulatory affairs.3
In July 1985, Gambro Germany notified Gambro by letter that dialyzers it had manufactured, the clearances of which varied from the package insert, were about to be shipped to Gambro.4 The letter described potential risks to acute and chronic patients.5 Balla advised the president to reject the shipment for noncompliance with FDA regulations, and the president initially notified Gambro Germany of the rejection on July 12, 1985.6 One week later, the president informed Gambro Germany that Gambro would accept the dialyzers and sell them to a unit that buys only on price.7 Balla became aware of this decision through other employees and informed the president in August 1985 that he would take whatever steps necessary to prevent the sale.8
On September 4, 1985, Gambro's president discharged Balla.9 The following day, Balla reported the shipment to the FDA, which seized the dialyzers and found them adulterated under the Federal Food, Drug, and Cosmetic Act.10 On March 19, 1986, Balla filed a four-count complaint for retaliatory discharge in the circuit court of Cook County seeking $22 million in damages.11 The trial court granted the defendants' motion for summary judgment on November 30, 1988.12 The appellate court reversed and remanded for factual determinations under a three-part test.13 The Illinois Supreme Court granted leave to appeal.14
Whether in-house counsel should be allowed the remedy of an action for retaliatory discharge?15
The tort of retaliatory discharge is a limited and narrow exception to the general rule of at-will employment.16 It seeks to achieve a proper balance among the employer's interest in operating a business efficiently and profitably, the employee's interest in earning a livelihood, and society's interest in seeing its public policies carried out.17 In-house counsel do not have a claim under the tort.18 The public policy of protecting the lives and property of citizens is adequately safeguarded by the Rules of Professional Conduct requiring disclosure of information necessary to prevent death or serious bodily injury.19 Extending the tort would have an undesirable effect on the attorney-client relationship by chilling candid communications between employers and their in-house counsel.20
No. The public policy at issue is adequately protected.21 Balla was required under Rule 1.6(b) to report the dialyzers to the FDA because their use would cause death or serious bodily injury.22 He reported them the day after discharge.23 Extending the tort is unnecessary.
It would harm the attorney-client relationship because employers would be less willing to share potentially questionable information with in-house counsel knowing it could be used in a lawsuit.24 This result is contrary to the purpose of encouraging full and frank communication recognized in Upjohn Co. v. United States.25 Balla's role as general counsel was inextricably bound with his regulatory affairs duties.26 Both job descriptions required assuring compliance with laws and regulations.27
His deposition testimony confirmed he was acting as an attorney when advising on the dialyzers' legality and criminal penalties.28
In-house counsel are not entitled to bring a cause of action for retaliatory discharge against their employer.29
Related opinions on this issue
Justice Freeman dissents because the majority's reasoning that ethical obligations adequately safeguard public policy ignores reality.30 Attorneys are no less human than others and may be tempted to ignore ethical obligations when compliance means being unable to support their families.31 Recent scandals involving the bench and bar demonstrate that ethical duties alone are insufficient.32
He argues that allowing the claim would not chill the attorney-client relationship.33 Corporate clients will rarely decide to proceed with illegal conduct regardless of advice.34 The fundamental public policy favoring protection of lives and property outweighs the at-will employment relationship and any unfettered right to discharge an attorney.35
Whether a question of fact exists as to whether the attorney's discharge resulted from information he learned as a layman in a nonlegal position?36
A motion for summary judgment should be granted when the pleadings, depositions, and affidavits reveal that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.37 No question of fact exists on whether an attorney learned information as a layman.38 The roles of general counsel and manager of regulatory affairs are intertwined with equivalent duties for assuring FDA compliance.39 The attorney's deposition testimony confirms he was acting as counsel throughout.40
No. The corporate hierarchy had the general counsel supervising the manager of regulatory affairs, so Balla supervised himself.41 Both job descriptions required coordinating and overseeing activities to assure compliance with laws and regulations and establishing programs to ensure FDA compliance.42 Balla's deposition testimony established that whether a device could be legally sold is a legal question.43 He did not change frames of mind between roles.44
As an attorney he opined the dialyzers were misbranded or adulterated.45 He was always an attorney when performing regulatory affairs duties.46 These facts make the roles inseparable under ABA Formal Opinion No. 328.47
No question of fact exists as to whether the discharge resulted from information learned as a layman in a nonlegal position.48