1. Conflicting Loyalties; Pierce v.
Ortho Pharmaceutical Corp; &
Montana: Wrongful Discharge
From Employment Act
Presented By: Nida Khan
Halbert, Terry, and Elaine Ingulli. Law & Ethics
in the Business Environment. 7th ed. Mason,
OH: South-Western Cengage Learning, 2012.

2. 1. Dr. Thomas Stockmann is a Medical Officer of the municipal Baths, which the town
recently built to help its economy.
2. Peter Stockmann (The MAYOR) is Dr. Stockmann‟s brother. He is the chairman of the
Baths‟ committee.
3. Dr. Stockmann, after conducting an investigation, discovers the Baths‟ drainage
system is contaminated, and people are bathing in polluted water.
4. The Mayor, in response, tells Dr. Stockmann the investigation exaggerates the
situation. He tries to convince Dr. Stockmann that the necessary repairs would be too
expensive and will take too long to complete (2 years). The Mayor further says the
board might make changes in a few years, because losing the Baths right now would
be catastrophic to the town‟s economy.
5. Dr. Stockmann is enraged. The Mayor demands that further studies be conducted and
Dr. Stockmann must make a public announcement that his findings were not as
dangerous as Dr. Stockmann imagined.
6. The Mayor stresses that as a member of the staff, Dr. Stockmann has no rights to
“personal convictions.”
7. Dr. Stockmann replies that as a doctor, he is free to speak his mind.

3. “Conflicting Loyalties – to
one‟s employer, and to
one‟s conscience – the
dilemma faced by a
person who must decide
whether to become a
„whistleblower‟ (Halbert &
Ingulli at 46.)”

4. • Whistleblowers are people who
decide to report unethical or illegal
activities.
◦ They feel morally driven to call
attention to problems they see at work.
◦ They are often at the risk of bringing
damaging repercussions upon
themselves.
• “Those who blow the whistle very
often must choose between silence
and driving over a cliff (Halbert &
Ingulli at 52.)”

5. • A set of standards adopted by a professional
community.
• Often referred to as code of ethics.
• “Employees who are professionals owe a
special duty to abide not only by federal and
state law, but also by the recognized codes of
ethics of their professions (Halbert & Ingulli
at 54.)”

6. • Earliest example of professional ethics is the
Hippocratic Oath.
• This oath was historically taken by doctors
promising to practice medicine ethically.
• It is believed to be written by Hippocrates.

7. “Gives employers unfettered power to dismiss
employees at will for good cause, for no cause, or
even for cause morally wrong, without being thereby
guilty of a legal wrong (Halbert & Ingulli at 49).”

8. Dr. Grace Pierce, Plaintiff-Appellant
• She was an at-will employee at Ortho
Ortho Pharmaceutical Corporation, Defendant-
Respondent
• Specializes in developing and manufacturing
therapeutic and reproductive drugs.

9. Does an at-will employee have a cause of action
against the employer to recover damages for
termination following the refusal to continue a project
viewed as medically unethical by the employee?

10. • Dr. Pierce was the only medical doctor on Ortho‟s team
developing loperamide for treating diarrhea in infants, children,
and the elderly.
• The formulation of loperamide contained saccharin. Because of
its safety concerns, Dr. Pierce felt that by continuing to work on
loperamide, she was violating the Hippocratic Oath. She opposed
work being done on loperamide at Ortho.
• Her immediate supervisor, Dr. Pasquale informed her she would
no longer be assigned to the loperamide project. He asked her to
choose other projects.
• Even though her salary was not decreased, Dr. Pierce felt she was
being demoted, Dr. Pierce resigned. Dr. Pasquale accepted her
resignation.

11. 1. Dr. Pierce sued for damages after termination, claiming
Ortho pressured her to violate her ethical principles.
2. The trial court judge dismissed her claim, mainly
because of the employment at-will doctrine. The trial
judge granted defendant‟s motion for summary
judgment.
3. The appellate court reversed and remanded for a full
trial.
4. Dr. Pierce appealed to the New Jersey Supreme Court.
The Supreme Court granted the defendant‟s petition for
certification. The Supreme Court reversed the Appellate
Division and reinstated the summary judgment.

12. • Under the common law, the employers of at-will-employees, and
the employees may terminate the employment relationship with
or without cause.
• The court found that an employee has a cause of action for
wrongful discharge when the discharge is contrary to a clear
mandate of public policy.
• The controversy at Ortho involved a difference in medical
opinions.
• An employer may discharge an employee who refuses to work
unless the refusal is based on a clear mandate of public policy.
• The Hippocratic Oath does not contain a clear mandate of public
policy that prevented Dr. Pierce from continuing her research on
loperamide.

13. • There are a number of codes of medical ethics that
proscribe participation in clinical experimentation
when a doctor perceives an unreasonable threat to
human health.
• It is pointed out that Dr. Pierce contends she may not
be discharged for expressing her view that the
program is unethical or for refusing to continue her
participation in the project.
• The dissonance ends asking, should Dr. Pierce have
waited until the first infant was placed before her,
ready to receive the first dose of the drug containing
44 times the concentration of saccharin permitted in
12 ounces of soda?

14. An at-will employee does not have a cause of action
against the employer to recover damages for
termination following the refusal to continue a project
viewed as medically unethical by the employee, unless
the discharge is contrary to a clear mandate of public
policy.

15. Unlike Dr. Pierce, I would not have opposed working on the development of
loperamide. I would have instead worked harder on obtaining an alternative formula
containing less saccharin. It is unknown if the FDA would have even approved the
Investigational New Drug application (IND). By being a part of the project team, I
would have been able to oversee the details that are filed with the FDA. I would share
all the relevant results with the FDA and share the adverse information known about
the medical controversy of such high doses of saccharin. I would wait for their
response. There are several medicines available in the market, and most if not all
have some side effects associated with them. It is a matter of deciding if the benefit
outweighs the risk. Dr. Pierce was not forced to conduct tests. She had a difference
of opinion with the management. Her employment was at-will with Ortho, and by
submitting a resignation, she is willingly ending her employment with the company. I
agree with the reasoning, as mentioned in Law & Ethics in the Business Environment,
“The case would have been different if Ortho had filed the IND, the FDA had
disapproved it, and Ortho insisted on testing the drug on humans (Halbert & Ingulli
at 55.)” Professional employees do have assertive rights against an employer, but the
actions must be for the public interest. “The public has an interest in the
development of drugs, subject to the approval of responsible management and the
FDA, to protect and promote the health of mankind (55.)”

16. • Passed in 1987 by the Montana legislature
• Designed to preserve at-will-employment
• Specifies the legal basis for a wrongful discharge
• Must be filed within 1 year after the date of discharge.

17. Constructive Discharge
• Voluntary termination of employment by employee
because of a situation created.
• Can‟t be because of employer‟s refusal to promote the
employee or improve wages.
Discharge
• Includes constructive discharge.
• Any other termination of employment, including
resignation, elimination of the job, layoff for lack or
work, failure to recall or rehire, and any other cutback in
the number of employees for a legitimate business
reason.

18. Employee
• A person who works for another for hire.
• Does not include an independent contractor
Good Cause
• Job-related grounds for dismissal based on a failure to
satisfactorily perform job duties, disruption of
employer‟s operation, or other legitimate business
reason
Public Policy
• A policy in effect at the time of the discharge
concerning the public health, safety, or welfare
established by constitutional provision, statute, or
administrative rule.

19. A discharge is wrongful only if:
1. It was in retaliation for the employee‟s refusal
to violate public policy or for reporting a
violation of public policy
2. The discharge was not for good cause and the
employee had completed the employer‟s
probationary period of employment
3. The employer violated the express provisions of
its own written personnel policy.

20. 1. The employee may be
awarded lost wages and
fringe benefits for a
maximum of 4 years from 1. No claim for
the date of discharge
discharge may arise
2. The employee may claim from tort or express
punitive damages if it is
established with clear and or implied contract
convincing evidence that
the employer engaged in
actual fraud or malice in
the discharge of the
employee
Preemption of common
Remedies
law remedies

21. This part does not apply to a discharge:
1. Subject to any other state or federal statute that
provides a procedure or remedy for contesting
the dispute. Statutes includes those that prohibit
discharge for filing complaints , charges, or
claims with administrative bodies, or that prohibit
unlawful discrimination, and other similar
grounds.
2. An employee covered by a written agreement or
contract of employment for a specific term.