Retaliatory Discharge and In-House Counsel-A Comparative Analysis of State Law in the Wake of the Tennessee Supreme Court's Decision in Crews V. Buckman Laboratories

By Overall, Lisa | The University of Memphis Law Review, Spring 2003 | Go to article overview

Retaliatory Discharge and In-House Counsel-A Comparative Analysis of State Law in the Wake of the Tennessee Supreme Court's Decision in Crews V. Buckman Laboratories


Overall, Lisa, The University of Memphis Law Review


I. INTRODUCTION

The common law tort of retaliatory discharge is recognized by many courts, even in states such as Tennessee that recognize "at-will" employment.1 This exception to the "at-will" doctrine is a narrow one. In light of the recent Tennessee Supreme Court decision on this issue in Crews v. Buckman Laboratories International, Inc.,2 this Note will explore the unique problems that arise when the employee seeking a remedy for retaliatory discharge is "in-house" counsel and the different approaches states have taken to address the issue.3

II. AN OVERVIEW OF THE COMMON LAW CLAIM FOR RETALIATORY DISCHARGE

A. Retaliatory Discharge Generally

Retaliatory discharge claims against employers are generally allowed only where the employee has been fired for exercising a statutory or constitutional right, or the discharge of the employee contravenes a clear mandate of public policy.4 Courts often use "clear mandate of public policy" language to encompass a variety of situations. The language often covers or includes termination for exercising a statutory or constitutional right, as in the case of an employee terminated for seeking worker's compensation benefits.5 Courts also use the terminology when an employee is terminated for reporting criminal activities of an employer, also called "whistle blowing," or for refusal to commit a criminal act, and thereby avoiding the violation of some law established to protect the public.6 Recently, some states have allowed claims under a public policy theory when employers allegedly discharge employees for complying with, or refusing to violate, professional ethical codes or mandates.7

B. Damages

A tort claim for retaliatory discharge is often preferred to a claim under an express or implied contract of employment theory. The damages for breach of contract are limited to compensatory relief, generally in the form of wages lost during the time of unemployment.8 In addition to compensatory damages, however, remedies for a tort action also may include reinstatement, punitive damages, and damages for mental anguish or pain and suffering.9

While reinstatement may be sought by an employee claiming retaliatory discharge, it might not be an acceptable remedy when the discharged employee is "in-house" counsel. According to the American Bar Association's (ABA) Model Rules of Professional Conduct, a client "has the right to discharge a lawyer at any time, with or without cause."10 Therefore, requiring a corporation to retain the legal services of an attorney it has discharged directly conflicts with the corporation's right to choose its own lawyer.

III. RETALIATORY DISCHARGE CLAIMS BY IN-HOUSE COUNSEL-THREE GENERAL APPROACHES

Courts have three general approaches to retaliatory discharge claims by in-house counsel. These categories are: (1) no claim allowed; (2) claims allowed subject to tight restrictions; and (3) claims allowed subject only to minor restrictions. This section examines each of these categories of cases.

A. Balla v. Gambro, Inc.11-No Cause of Action

While several courts had previously rejected the right of attorneys to sue for wrongful discharge, that line of cases culminated in Balla v. Gambro, Inc.12 In Balla, the Supreme Court of Illinois held that an attorney could not maintain a cause of action for retaliatory discharge against his corporate employer.13

Gambro, Inc. (Gambro) distributed kidney dialysis equipment manufactured by its affiliate, Gambro Germany.14 In 1980, Gambro hired the plaintiff as General Counsel.15 In 1983 he was given the additional responsibility of Manager of Regulatory Affairs.16 As Manager of Regulatory Affairs, the plaintiff was responsible for, among other things, ensuring awareness and compliance with federal regulations.17

In 1985, the plaintiff was informed by Gambro Germany that dialyzers it had manufactured and was about to ship to the United States did not comply with United States Food and Drug Administration (FDA) guidelines. …

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