Court Opinion

ID: 6084157
Source: CourtListenerOpinion
Date Created: 2022-01-13 19:09:04.957792+00
Date Added: 2024-06-11T08:53:20.418414
License: Public Domain

Wallach, J. (dissenting).
Plaintiff, a licensed physician, was *12hired by oral contract, ordinarily terminable at will, to serve as a doctor and medical administrator for the company’s personnel. The complaint alleges that in the course of this employment, defendant directed plaintiff to disclose the contents of confidential medical records, without employee knowledge or consent, pertaining to workers’ compensation claims, purportedly in violation of various ethical guidelines governing her profession (see, e.g., Education Law § 6530 [23]; 8 NYCRR 29.1 [b] [8]). Her employment was terminated, allegedly because she refused to comply.
Defendant moved to dismiss for failure to state a cause of action. The IAS court ruled that since such unauthorized disclosure of confidential patient information would have constituted professional misconduct, plaintiff’s discharge for her ethically premised conduct sustained a viable cause of action for breach of an implied provision of her contract of employment. We disagree, and would reverse and grant defendant’s motion to dismiss the complaint.
Absent a constitutionally impermissible purpose, a statutory proscription or a fixed term contained in the individual employment contract itself, an employer’s right to terminate an employment at will remains unimpaired in New York (Murphy v American Home Prods. Corp., 58 NY2d 293). An employee at will has no implied contractual right to continued employment, and thus the relationship can be terminated at any time by the employer, for virtually any reason.
The Court of Appeals has carved out one very limited exception to this rule in the case of an associate attorney who claimed wrongful discharge by his law firm after he had notified his senior partners about unethical conduct by another member of the firm and had urged them to report the matter to the Appellate Division’s Departmental Disciplinary Committee (Wieder v Skala, 80 NY2d 628). When the law firm failed to act, Mr. Wieder reported his colleague to the disciplinary authorities, whereupon the law firm (o) also reported the matter, and (b) then fired Wieder, allegedly in retaliation. The IAS court in the case at bar concluded that the Wieder rationale entitled plaintiff herein to a similar exception.
Obviously, Dr. Horn’s claim here strikes a sympathetic, and even a seductive, chord. In one federal case involving an at-will employee’s action for wrongful discharge (Wolde-Meskel v Tremont Commonwealth Council, 1994 US Dist LEXIS 5464, 1994 WL 167977 [SD NY, Apr. 29, 1994]), the court noted (at *8 n 3, *3 n 3):
*13“Although it might be argued that the New York courts have limited the harshness of the at-will rule’s effect especially as to lawyers with no firmer foundation than heightened empathy towards colleagues in their own profession, such a limitation would be nonetheless within the province of the state courts.”
While whimsical in tone, the subtext of this observation is clear enough. And, to the extent that such a thought could be perceived as an operational rationale to any degree, an immediately attractive and surely remedial response might be to enlarge membership in the favorably protected class to include the medical practitioner. In good time, other professional employees might well be invited to seek shelter under the ever expanding Wieder big tent. But in light of existing law in this state, we, as an intermediate appellate court, must resolutely resist that temptation.
Any rule of law purporting to regulate at-will employment contracts has the widest application and economic impact. For example, courts are legislatively bound to address certain discriminatory activity, under constitutional equal protection principles (age, race, sex, disability). All the more reason that when an employee seeks regulation of an employer’s ethical conduct by means which have far-reaching economic implication, the judgment as to the best method of restraint requires the broad investigatory resources of the Legislature. In other words, the area of economic consideration is one far better left to legislative remedy (Wieder v Skala, supra at 639; Sabetay v Sterling Drug, 69 NY2d 329, 336-337). The Legislature has so moved to protect employees from employer actions in certain narrow circumstances, e.g., Executive Law § 296 (1) (e) (retaliation against an employee who objects to, or blows the whistle about, an employer’s violation of the Human Rights Law), Labor Law § 740 (retaliation against an employee who objects to, or blows the whistle about, an employer’s health and safety violations) or § 215 (any other violations of the Labor Law), Civil Service Law § 75-b (retaliatory action by public employers), and Judiciary Law § 519 (penalizing an employee for answering a call to jury duty). Each of these narrow areas of prohibition clearly resulted from extensive legislative study and action. For our Court now to extend the protective umbrella over a much broader class of employees for other unspecified employer improprieties would seemingly exceed the appropriate judicial role.
*14As the Court of Appeals noted in Sabetay (supra), the desire for stability and predictability in the sensitive area of employment contractual relations has resulted in the erection of a protective wall against judicial intervention, breach of which has traditionally been envisaged as solely a legislative prerogative. To date, Wieder is the only exception to this rule (see, Lichtman v Estrin, 282 AD2d 326), and courts have resisted the invitation to expand that exception to other licensed businesses or professions (see, e.g., Civiletti v Independence Sav. Bank, 236 AD2d 436 [bank employee]; Leibowitz v Party Experience, 233 AD2d 481 [chief financial officer]; DeFilippo v Xerox Corp., 223 AD2d 846, 848, lv dismissed 87 NY2d 1056 [salesman]; Haviland v J. Aron & Co., 212 AD2d 439, lv denied 85 NY2d 810 [commodities broker]; Mulder v Donaldson, Lufkin & Jenrette, 208 AD2d 301 [auditor]; McConchie v Wcil-Mart Stores, 985 F Supp 273 [pharmacist]; Fry v McCall, 945 F Supp 655 [public employee]; McGrane v Reader’s Digest Assn., 822 F Supp 1044, 1048-1049, 863 F Supp 183, 185, affd 60 F3d 811 [investigator]). Plaintiff has not established that the status of her profession demands similar treatment.
It should also be noted that viewed from the perspective of any licensed professional, the Wieder exception to the Murphy rule provides a double-edged sword. While it may be a boon to the employed professional, it simultaneously creates a severe constraint upon the employer-professional’s freedom of action, a consideration that must give pause to proponents of a Wieder expansion.
The Wieder exception makes it clear that the outcome in a wrongful discharge case depends less on the details of the employer’s alleged misconduct than on the nature of the professional relationship between employer and employee. In Sabetay v Sterling Drug (supra), an accountant serving as in-house director of corporate financial projects asserted he had been fired after refusing to condone slush-fund payments to foreign officials and other illegal tax-avoidance activities. Notwithstanding provisions in Sterling’s employee manual requiring reportage of illegal activities, the Court of Appeals held that the plaintiff still had not satisfied his burden to establish an express limitation on the company’s virtually unfettered authority to discharge an at-will employee.
Ethical rules governing the medical profession are primarily addressed to the relationship between practitioner arid patient. By contrast, the Wieder exception found an implied-in-law obligation of fair dealing and good faith, unique to the practice *15of law, in the distinctive relationship between a lawyer-associate and his firm. Intrinsic in every such relationship, the Court of Appeals held, is “the unstated but essential compact that in conducting the firm’s legal practice both [the associate] and the firm would do so in compliance with the prevailing rules of conduct and ethical standards of the profession.” (80 NY2d at 637-638.) A law firm’s insistence that its employed attorney violate those rules would frustrate the very essence of the common enterprise they share, in a profession whose disciplinary self-regulation is essential to its very survival in our society.
The parties presently before this Court—a newspaper publisher and the associate director of its medical department—were not engaged in a common professional enterprise. By no characterization were plaintiff and her employer professionally joined in the practice of medicine or the delivery of health-care services. As we see it, the major flaw in the majority argument sustaining this complaint rests in its denigration of this “common enterprise” component that is so essential to the Wieder exception. The contract cause of action sustained herein rests entirely upon an alleged breach of the implied covenant of good faith and fair dealing; this covenant need not be expressed, precisely because the common enterprise upon which both parties are embarked triggers its mutual application. The implied covenant, as indicated by the majority’s reliance upon Professor Corbin’s dictum, is that there is a silent but overarching term of ethical conduct recognition only where the parties’ shared understandings or expectations are so fundamental that they need not even be negotiated. No such expectations can be found to operate with equal force upon both parties in this context.
Responding to this serious departure from the Wieder rationale, the majority offers as a viable substitute defendant’s ethical obligation to conform to the lofty standards of “truth, integrity and confidentiality” (referencing the journalist’s privilege to protect confidential news sources) in delivering its “essential service to the public.” To adopt this standard would be to expand application of the Wieder exception to any situation where assertion of an employee’s ethical obligations results in retaliatory discharge, as long as the employer’s business is arguably subject to another, completely unrelated, set of ethical standards. We would be surprised if the Wieder Court ever contemplated even the possibility of such an extraordinary enlargement.
*16The IAS court granted defendant’s motion only to the extent of dismissing the second cause of action, asserting a claim for punitive damages. The first cause of action, alleging breach of an implied contract, should also have been dismissed.
Motions seeking leave to appear as amici curiae granted.
Rosenberger and Marlow, JJ., concur with Ellerin, J.; Sullivan, J.P., and Wallach, J., dissent in a separate opinion by Wallach, J.
Order, Supreme Court, New York County, entered December 18, 2000, affirmed, without costs. Motions seeking leave to appear as amici curiae granted.