Pierce v. Ortho Pharmaceutical Corp.

84 N.J. 58, 417 A.2d 505 (1980)





This case presents the question whether an employee at will has a cause of action against her employer to

recover damages for the termination of her employment following her refusal to continue a project she viewed as medically unethical.


Plaintiff, Dr. Grace Pierce, sued for damages after termination of her employment with defendant, Ortho

Pharmaceutical Corporation. The trial judge granted defendant's motion for summary judgment. The Appellate

Division reversed and remanded for a full trial. .


Ortho specializes in the development and manufacture of therapeutic and reproductive drugs. Dr. Pierce is a

medical doctor who was first employed by Ortho in 1971 as an Associate Director of Medical Research. She

signed no contract except a secrecy agreement, and her

employment was not for a fixed term. She was an

employee at will. In 1973, she became the Director of Medical Research/Therapeutics, one of three major

sections of the Medical Research Department. Her primary responsibilities were to oversee development of therapeutic drugs and to establish procedures for testing those drugs for safety, effectiveness, and

marketability.'Her immediate supervisor was Dr. Samuel

Pasquale, Executive Medical Director.


In the spring of 1975, Dr. Pierce was the only medical doctor on a project team developing loperamide, a

liquid drug for treatment of diarrhea in infants, children, and elderly persons. The proposed formulation contained saccharin. Although the concentration was consistent with the formula for loperamide marketed in Europe, the project team agreed that the formula was unsuitable for use in the United States. An alternative formulation containing less saccharin might have been developed within approximately three months.


By March 28, however, the project team, except for Dr. Pierce, decided to continue with the development of

loperamide. That decision was made apparently in response to a directive from the Marketing Division of Ortho. This decision meant that Ortho would file an investigational new drug application (IND) with the Federal Food and Drug Administration (FDA), continuing laboratory studies on loperamide, and begin work on a formulation. FDA approval is required before any new drug is tested clinically on humans. Therefore, loperamide would be tested on patients only if the FDA approved the saccharin formulation.


Dr. Pierce knew that the IND would have to be filed with and approved by the FDA before clinical testing

could begin. Nonetheless, she continued to oppose the work being done on loperamide at Ortho. On April 21,

1975, she sent a memorandum to the project team expressing her disagreement with its decision to proceed with the development of the drug. In her opinion, there was no justification for seeking FDA permission to use the drug in light of medical controversy over the safety of saccharin.


Dr. Pierce met with Dr. Pasquale on May 9 and informed him that she disagreed with the decision to file an IND with the FDA. She felt that by continuing to work on loperamide she would violate her interpretation of the Hippocratic oath. She concluded that the risk that saccharin might be harmful should preclude testing the formula on children or elderly persons, especially when an alternative formulation might soon be available.


Dr. Pierce recognized that she was joined in a difference of "viewpoints" or "opinion" with Dr. Pasquale and others at Ortho concerning the use of a formula containing saccharin. In her opinion, the safety of saccharin in loperamide pediatric drops was medically debatable. She acknowledged that Dr. Pasquale was entitled to his opinion to proceed with the IND. . . .


After their meeting on May 9, Dr. Pasquale informed Dr. Pierce that she would no longer be assigned to the

loperamide project. On May 14, Dr. Pasquale asked Dr. Pierce to choose other projects. After Dr. Pierce returned from vacation in Finland, she met on June 16 with Dr. Pasquale to discuss other projects, but she did not chose a project at that meeting. She felt she was being demoted, even though her salary would not be decreased. . . .Viewing the matter most favorably to Dr. Pierce, we assume the sole reason for the termination of her employment was the dispute over the loperamide project. Dr. Pasquale accepted her resignation.


Under the common law, in the absence of an employment contract, employers or employees have been free to

terminate the employment relationship with or without cause.


In the last century, the common law developed in a laissez-faire climate that encouraged industrial growth and approved the right of an employer to control his own business, including the right to fire without cause an employee at will. The twentieth century has witnessed significant changes in socioeconomic values that have led to reassessment of the common law rule. Businesses have evolved

from small and medium size firms to gigantic

corporations in which ownership is separate from management. Formerly there was a clear delineation between employers, who frequently were owners of their own businesses, and employees. The employer in the old sense has been replaced by a superior in the corporate hierarchy who is himself an employer. We are a nation of employees. Growth in the number of employees has been accompanied by increasing recognition of the need for stability in labor relations.


Commentators have questioned the compatibility of the

traditional at will doctrine with the realities of modern economics and employment practices. The common law rule has been modified by the enactment of labor

relations legislation. The National Labor Relations Act and other labor legislation illustrate the gouvernemental policy of preventing employers from using the right of discharge as a means of oppression. Consistent with this policy, many states have recognized the need to protect employees who are not

parties to a collective bargaiiiing agreement or

other contract from abusive practices by the employer.


Recently those states have recognized a common law cause of action for employees at will who were discharged for reasons that were in some way "wrongful." .


We hold that an employee has a cause of action for wrongful discharge when the discharge is contrary to a clear mandate of public policy. The sources of public policy include legislation; administrative rules, regulations or decisions; and judicial decisions. In certain instances, a professional code of ethics may contain an expression of public policy. However . . . unless an employee at will identifies a specific expression of public policy, he may be discharged with or without cause.


Viewing the matter most favorably to Dr. Pierce, the controversy at Ortho involved a difference in medical

opinions. Dr. Pierce acknowledged that Dr. Pasquale was entitled to his opinion that the oath did not forbid work on loperamide. Nonetheless, implicit in Dr. Pierce's position is the contention that Dr. Pasquale and Ortho were obliged to accept her opinion. Dr. Pierce contends, in effect, that Ortho should have stopped research on loperamide because of her opinion about the controversial nature of the drug.


Dr. Pierce espouses a doctrine that would lead to disorder in drug research. Under her theory, a professional employee could redetermine the propriety of a research project even if the research did not involve a violation of a clear mandate of public policy. Chaos would result if a single doctor

engaged in research were allowed to determine, according to his or her individual conscience, whether a project should continue. An employee does not have a right to continued employment when he or she refuses to conduct research simply because it would contravene his or her personal morals. An employee at will who refuses to work for an employer in answer to a

call of conscience should recognize that older employees and their employer might heed a different call. However, nothing in this opinion should be construed to restrict the right of an employee at will to refuse to work on a project that he or she believes is unethical. In sum, an employer may discharge an employee who refuses to work unless the refusal is based on a clear mandate of public policy.


. . . As a matter of law, there is no public policy against conducting research on drugs that may be

controversial, but potentially beneficial to mankind, particularly where continuation of the research is subject to approval by the FDA. Consequently, although we recognize an employee may maintain an action for wrongful discharge, we hold there are no issues of material fact to be resolved at trial.


Under these circumstances, we conclude that the Hippocratic oath does not contain a clear mandate of public policy that prevented Dr. Pierce from continuing her research on loperamide. To hold otherwise would serions impair the ability of drug manufacturers to develop new drugs according to their best judgment.


Accordingly, we reverse the judgment of the Appellate Division and remand the cause to the trial court for

entry of judgment for defendant.