## Facts

- Peter M. Kelly began working for Hunton & Williams in 1990 as a law-school graduate employee.
- Kelly passed the New York bar exam in 1991 but was not admitted to practice until 1997.
- In 1991, Kelly learned of alleged billing fraud by firm partner Scott Wolas and reported the allegations internally to firm leadership.
- Kelly alleged certain partners had conflicting financial ties with Wolas and pressed Kelly to stop pursuing the allegations.
- Kelly claimed that, on the eve of a meeting with a former managing partner in 1993 about the allegations, he was pressured to resign and was threatened with a negative reference if he continued pursuing the matter.
- Kelly sued the firm asserting contract-based theories (including implied covenant and related wrongful-discharge concepts), arguing that retaliation for ethics reporting was actionable despite at-will employment.

## Issues

1. Whether New York’s narrow implied-contract exception for law-firm retaliation against ethics reporting (associated with *Wieder v. Skala*) applies to a law-firm employee who had passed the bar exam but was not yet admitted to practice at the relevant time.
2. Whether New York law otherwise recognizes an implied-contract or public-policy limit on at-will termination for a law-firm employee allegedly forced out for reporting internal billing fraud or ethical violations.

## Decision

- The court granted the defendant law firm’s motion for summary judgment and dismissed Kelly’s claims.
- The court held that the *Wieder* exception did not apply because Kelly was not an admitted attorney during the relevant events.
- The court held that New York law does not recognize a broader at-will exception, outside *Wieder*’s narrow setting, for retaliation based on internal ethics or fraud reporting.
- The court concluded that, even crediting Kelly’s allegations for purposes of summary judgment, the asserted contract-based theories failed as a matter of law.

## Legal Principles

- Under New York law, at-will employment generally permits termination for any reason absent an express contractual term or a specific statutory restriction.
- *Wieder* creates a limited implied-contract remedy tied to the distinctive relationship between a law firm and its admitted attorney-employees when termination would require the attorney to forgo core, nondelegable professional obligations.
- Passing a bar exam without admission to practice does not place an employee within the class protected by *Wieder* for purposes of an implied limitation on termination by a law firm.
- New York does not recognize a generalized common-law whistleblower or public-policy exception that converts ethics-reporting retaliation into a contract claim in the absence of the narrow *Wieder* circumstances or a governing statute.

## Conclusion

The court entered summary judgment for the law firm, holding that New York’s limited implied-contract protection for attorneys discharged for fulfilling professional reporting duties did not extend to a nonadmitted employee and that New York law supplied no broader contract or public-policy remedy for the alleged retaliation.


Kelly v. Hunton & Williams, No. 97-CV-5631 (JG), 1999 WL 408416 (E.D.N.Y. June 17, 1999)