Balla v. Gambro, Inc.

Facts

P is an attorney licensed to practice law in the State of Illinois. D is a distributor of kidney dialysis equipment manufactured by Gambro Germany. P was responsible for all legal matters within the company and personnel within the company's sales office. P was to advise, counsel, and represent management on legal matters; establish and administer personnel policies; coordinate and overseeing corporate activities to assure compliance with applicable laws and regulations, and prevent or minimize legal or administrative proceedings; and coordinating the activities of the manager of regulatory affairs. The manager of regulatory affairs for D and P assumed the manager's specific duties. P's annual compensation was increased. Requirements for the regulatory affairs position were a bachelor of science degree and three to five years in the medical device field plus two years experience in the area of government regulations. The individual in the position prior to P was not an attorney. In July 1985 P told the president of D to reject a shipment from Germany because the dialyzers did not comply with FDA regulations. The president notified Gambro Germany. One week later the president informed Gambro Germany that D would accept the dialyzers and 'sell [them] to a unit that is not currently our customer but who buys only on price.' P became aware of the new decision through other D employees. P told the president that he would do whatever necessary to stop the sale of the dialyzers. On September 4, 1985, P was discharged. P reported the shipment of the dialyzers to the FDA. The FDA seized the shipment and determined the product to be 'adulterated within the meaning of section 501(h) of the [Federal Act].' P filed a four-count complaint in tort for retaliatory discharge seeking $22 million in damages. D filed a motion for summary judgment. It was granted. The court concluded that the duties P was performing which led to his discharge were 'conduct clearly within the attorney-client relationship' and that D had the 'absolute right' to discharge its attorney. On appeal, the court held that an attorney is not barred as a matter of law from bringing an action for retaliatory discharge. Standing to bring the action was based on the following three-part test: '(1) whether [the attorney's] discharge resulted from information he learned as a 'layman' in a nonlegal position; (2) whether [the attorney] learned the information as a result of the attorney/client relationship, if so, whether the information was privileged, and if it was privileged, whether the privilege was waived; and (3) whether there were any countervailing public policies favoring disclosure of privileged information learned from the attorney/client relationship.' D appealed.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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