## Facts

- Roger J. Balla, an Illinois-licensed attorney, worked as Gambro, Inc.’s in-house counsel and held administrative/regulatory titles.
- Gambro distributed kidney dialysis devices regulated by federal and state food-and-drug laws and FDA rules.
- A Gambro affiliate shipped dialyzers that Balla believed did not comply with FDA requirements.
- Balla advised the company president that the shipment should be rejected and warned that sale could cause serious injury or death.
- Management refused to reject the shipment and terminated Balla.
- After termination, Balla reported the matter to the FDA; the FDA seized the shipment and found the dialyzers adulterated.
- Balla sued for retaliatory discharge, alleging he was fired for acting to prevent unlawful or unsafe distribution and for reporting to the FDA.

## Issues

1. Whether an in-house attorney may maintain a common-law retaliatory discharge action against a corporate employer/client when the attorney alleges termination for acting to further clearly mandated public policy and regulatory compliance.

## Decision

- The Illinois Supreme Court reversed the appellate court and affirmed summary judgment for defendants.
- The court held that in-house counsel generally cannot bring a retaliatory discharge claim against the corporate employer/client.
- The court reasoned that extending the tort to in-house counsel would risk impairing attorney-client confidentiality and candid communications.
- The court further reasoned that attorneys already have independent ethical duties to prevent or report client conduct posing serious harm or involving illegality, reducing any need for a tort remedy.

## Legal Principles

- Retaliatory discharge is a narrow exception to employment at will and will not be extended where doing so would conflict with the attorney-client relationship.
- An in-house attorney’s relationship with the corporate employer is principally attorney-client; imposing tort liability for discharge risks chilling client candor and threatens confidentiality and privilege.
- Lawyers have professional obligations that may require withdrawal, refusal to assist unlawful conduct, and action to prevent serious harm, even at the cost of employment.
- In-house counsel disputes arising from performance of legal duties are addressed primarily through professional-responsibility rules and contract principles rather than retaliatory discharge tort liability.

## Conclusion

Illinois law does not recognize a retaliatory discharge cause of action by in-house counsel against a corporate employer/client for termination allegedly based on the attorney’s efforts to secure regulatory compliance or report dangerous conduct, because the attorney-client relationship and existing professional duties outweigh the incremental public-policy value of the tort remedy.


Balla v. Gambro, Inc., 145 Ill. 2d 492, 584 N.E.2d 104 (Ill. 1991)