Opinion ID: 1060390
Heading Depth: 1
Heading Rank: 6

Heading: rejection of the rationales advanced by balla and other cases

Text: Considering these two general approaches to retaliatory discharge actions based upon termination in violation of public policy, we generally agree with the approaches taken by the courts in General Dynamics , Stewart , and Burkhart . The very purpose of recognizing an employee's action for retaliatory discharge in violation of public policy is to encourage the employee to protect the public interest, and it seems anomalous to protect only non-lawyer employees under these circumstances. Indeed, as cases in similar contexts show, in-house counsel do not generally forfeit employment protections provided to other employees merely because of their status or duties as a lawyer. [2] Moreover, we must reject the rationales typically set forth by Balla and the Court of Appeals in this case to generally deny lawyers the ability to pursue retaliatory discharge actions. Balla 's principal rationale was that recognition of a retaliatory discharge action was not necessary to protect the public interest so long as lawyers were required to follow a code of ethics. Indeed, relying on Balla , the intermediate court in this case specifically concluded that statutory and ethical proscriptions are sufficient to protect the public policy against the unauthorized practice of law and that in-house counsel do not need incentives, by way of a cause of action for retaliatory discharge, to comply with the Disciplinary Rules. We respectfully disagree that the public interest is adequately served in this context without permitting in-house counsel to sue for retaliatory discharge. It is true that counsel in this case was under a mandatory duty to not aid a non-lawyer in the unauthorized practice of law, see Tenn. Sup.Ct. R. 8, DR 3-101(A), [3] and the intermediate court was also correct that lawyers do not have the option of disregarding the commandments of the Disciplinary Rules. This is not to say, however, that lawyers can never choose to violate mandatory ethical duties, as evidenced by the number of sanctions, some more severe than others, imposed upon lawyers by this Court and the Board of Professional Responsibility for such violations. Ultimately, sole reliance on the mere presence of the ethical rules to protect important public policies gives too little weight to the actual presence of economic pressures designed to tempt in-house counsel into subordinating ethical standards to corporate misconduct. Unlike lawyers possessing a multiple client base, in-house counsel are dependent upon only one client for their livelihood. As the General Dynamics Court acknowledged, the economic fate of in-house attorneys is tied directly to a single employer, at whose sufferance they serve. Thus, from an economic standpoint, the dependence of in-house counsel is indistinguishable from that of other corporate managers or senior executives who also owe their livelihoods, career goals and satisfaction to a single organizational employer. 876 P.2d at 491. The pressure to conform to corporate misconduct at the expense of one's entire livelihood, therefore, presents some risk that ethical standards could be disregarded. Like other non-lawyer employees, an in-house lawyer is dependent upon the corporation for his or her sole income, benefits, and pensions; the lawyer is often governed by the corporation's personnel policies and employees' handbooks; and the lawyer is subject to raises and promotions as determined by the corporation. In addition, the lawyer's hours of employment and nature of work are usually determined by the corporation. See, e.g., Nordling v. Northern States Power Co., 478 N.W.2d 498, 502 (Minn.1991) (noting reasons why an in-house lawyer should also be considered an employee). To the extent that these realities are ignored, the analysis here cannot hope to present an accurate picture of modern in-house practice. Cf. Givens, 75 S.W.3d at 395 (recognizing the practical reality that a lawyer's independent professional judgment may be influenced by a third party, notwithstanding the presence of specific prohibitions in the Code of Professional Responsibility against such conduct). We also reject Balla 's reasoning that recognition of a retaliatory discharge action under these circumstances would have a chilling effect upon the attorney-client relationship and would impair the trust between an attorney and his or her client. This rationale appears to be premised on one key assumption: the employer desires to act contrary to public policy and expects the lawyer to further that conduct in violation of the lawyer's ethical duties. We are simply unwilling to presume that employers as a class operate with so nefarious a motive, and we recognize that when employers seek legal advice from in-house counsel, they usually do so with the intent to comply with the law. Moreover, employers of in-house counsel should be aware that the lawyer is bound by the Code of Professional Responsibility, [4] and that the lawyer may ethically reveal client confidences and secrets in many cases. See Tenn. Sup.Ct. R. 8, DR 4-101(C). Therefore, with respect to the employer's willingness to seek the advice of the lawyer for legally questionable conduct, the nature of the relationship should not be further diminished by the remote possibility of a retaliatory discharge suit. In fact, [t]here should be no discernible impact on the attorney-client relationship [by recognition of a retaliatory discharge action], unless the employer expects his counsel to blindly follow his mandate in contravention of the lawyer's ethical duty. See Elliot M. Lonker, General Dynamics v. Superior Court; One Giant Step Forward for In-House Counsel or One Small Step Back to the Status Quo?, 31 Cal. W.L.Rev. 277, 298 n. 139 (1995). Therefore, we conclude that little, if any, adverse effect upon the attorney-client relationship will occur if we recognize an action for discharge in violation of public policy. Finally, we reject Balla 's assertion that allowing damages as a remedy for retaliatory discharge would have the effect of shifting to the employer the costs of in-house counsel's adherence to the ethics rules. The very purpose of permitting a claim for retaliatory discharge in violation of public policy is to encourage employers to refrain from conduct that is injurious to the public interest. Because retaliatory discharge actions recognize that it is the employer who is attempting to circumvent clear expressions of public policy, basic principles of equity all but demand that the costs associated with such conduct also be borne by the employer. Indeed, permitting the employer to shift the costs of adhering to public policy from itself to an employeeirrespective of whether the employee is also a lawyerstrikes us as an inherently improper balance between the employment-at-will doctrine and rights granted employees under well-defined expressions of public policy. See Stein, 945 S.W.2d at 717 (Tenn.1997). If anything, the public interest is better served [when] in-house counsel's resolve to comply with ethical and statutorily mandated duties is strengthened by providing judicial recourse when an employer's demands are in direct and unequivocal conflict with those duties. Stewart, 653 N.E.2d at 167. In summary, we find unpersuasive the rationales set forth by Balla and other cases which equate the employment opportunities of in-house counsel with those of a lawyer possessing a larger client base. While in-house counsel may be a lawyer, we must further recognize that he or she is also an employee of the corporation, with all of the attendant benefits and responsibilities. Therefore, we hold that a lawyer may generally bring a claim for retaliatory discharge when the lawyer is discharged for abiding by the ethics rules as established by this Court.