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Balla v. Gambro, Inc

    Citation. Balla v. Gambro, Inc., 145 Ill. 2d 492, 584 N.E.2d 104, 1991 Ill. LEXIS 125, 164 Ill. Dec. 892, 16 A.L.R.5th 1000, 7 I.E.R. Cas. (BNA) 1 (Ill. Dec. 19, 1991)

    Brief Fact Summary. Plaintiff, working as in-house counsel for Defendant, became aware of Defendant’s intent to market non-compliant medical equipment and was fired shortly after advising Defendant that he could not allow this action.

    Synopsis of Rule of Law. Rule 1.6(b) of the Rules of Professional Conduct mandates that an attorney has an ethical duty to disclose dangerous public policy violations once he becomes aware of them. This ethical safeguard implies that an attorney working as in-house counsel has no claim in tort against an employer for retaliatory discharge.

    Facts. Plaintiff, Attorney Bella was employed as in-house counsel for Defendant Gambro, a corporation distributing kidney dialysis equipment. Plaintiff became aware of Defendant’s intent to distribute a shipment of irregular dialyzers which did not comply with the Food and Drug Administration’s relevant regulations, and notified Defendant of his intent to “do whatever necessary” to stop the sale of the dialyzers. Plaintiff was discharged shortly thereafter and brought this retaliatory discharge action against Defendant.

    Issue. Does an attorney employed as in-house counsel for a corporation have a cause of action against that corporation when he is discharged for threatening to expose public policy violations as a “whistle-blower”?

    Held. No. Appellate court reversed, lower court affirmed.
    Retaliatory discharge is a limited and narrow exception to the general concept of at-will employment, and these claims may only be granted when the moving party’s termination was in response to a good-faith attempt to prevent a violation of public policy.

    Although a non-attorney would probably have a cause of action under these facts, an attorney’s conduct is subject to the Rules of Professional Conduct, which already has an established procedure for attorneys to follow when clients state an intention to commit public policy violations. Attorneys have no choice but to follow this course of action in the face of public policy violations, and recognizing a further cause for retaliatory discharge would therefore be redundant.

    Employers are less likely to completely candid with their in-house counsel if a request for advice regarding potentially questionable conduct could leave them liable for a retaliatory discharge suit. Allowing this cause of action would inappropriately chill the attorney-client relationship by restricting the free flow of information between the parties.

    Dissent. Why should there be a different standard for attorneys?
    As it is, ethical safeguards aren’t enough to guarantee that attorneys will “do the right thing” in these kinds of cases. The majority’s standard will allow corporations to dismiss in-house counsel in these cases without fear of sanctions. This decision is far too lenient on corporations and far too difficult for attorneys.

    Allowing this cause of action would only chill the attorney-client relationship in those cases in which an employer purposely decides to violate public policy against advice of counsel, and this is a very small price to pay.


    Discussion. To the extent that these situations are already covered by the Rules, attorneys working as in-house counsel usually have no claim of action for retaliatory discharge when their employment is terminated following an objection to a potential public policy violation.


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