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Smart Summary

Factual and Procedural Background

Plaintiff Frances E. O'Sullivan, formerly employed as an X-ray technician by defendants Dr. James Mallon, Joseph Mozaffari, and Washington Memorial Hospital, instituted suit for breach of an employment contract following her discharge in March 1976. Plaintiff contends she was discharged due to her refusal to perform catheterizations, which she claims she was neither properly trained for nor legally authorized to perform, as such procedures are restricted to licensed nurses or physicians under New Jersey law. After her discharge, the New Jersey Board of Medical Examiners determined that catheterizations performed by plaintiff would violate the Medical Practice Act, and the State Board of Nursing issued a cease and desist order forbidding unlicensed personnel from performing catheterizations. Defendants moved to dismiss the complaint for failure to state a cause of action, raising the issue of an employer’s right to discharge an employee who refuses to perform an illegal act.

Legal Issues Presented

  1. Whether an employer may lawfully discharge an employee who refuses to perform an act that is illegal under state law.
  2. Whether public policy considerations prohibit termination of at-will employment in retaliation for refusal to commit an illegal act.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Schlenk v. Lehigh Valley Railroad Co., 1 N.J. 131 (1948) Employer may discharge employee with or without cause absent contractual or statutory restrictions. Referenced to establish baseline rule on at-will employment discharge authority.
Hindle v. Morrison Steel Co., 92 N.J. Super. 75 (1966) Same principle regarding employer’s discharge authority. Used to reinforce the general rule of at-will employment discharge.
English v. College of Medicine and Dentistry of N.J., 73 N.J. 20 (1977) Reaffirmed employer’s authority to discharge at-will employees. Distinguished from current case due to public policy concerns.
Monge v. Beebe Rubber Co., 114 N.H. 130, 316 A.2d 549 (1974) Termination motivated by bad faith, malice, or retaliation breaches employment contract. Used as persuasive authority to suggest public policy exceptions to at-will discharge.
Petermann v. International Brotherhood of Teamsters, 174 Cal.App.2d 184, 344 P.2d 25 (1959) Employee cannot be lawfully discharged for refusing to commit illegal acts (e.g., perjury). Adopted as a guiding rule that refusal to perform illegal acts protects employee from discharge.
Schipper v. Levitt Sons, Inc., 44 N.J. 70 (1965) Law must evolve with current concepts of justice; outdated distinctions should be rejected. Invoked to support adapting common law to protect public policy interests in employment law.
Isaacson v. Boswell, 18 N.J. Super. 95 (App.Div. 1952) Landmark holdings require a developed factual record. Emphasized the necessity of a full factual record before applying new legal rules.
Elizabeth Water Co. v. Bontempo, 67 N.J. Super. 8 (App.Div. 1961) Same as Isaacson: careful fact-finding required before ruling. Supported the court’s caution in applying new legal principles.
Hanover Ins. Co. v. Franke, 75 N.J. Super. 68 (App.Div. 1962), cert. denied 38 N.J. 308 (1963) Reinforces the need for sufficient evidentiary record before landmark rulings. Used to justify denial of dismissal pending further factual development.

Court's Reasoning and Analysis

The court acknowledged the well-established New Jersey rule permitting employers to discharge employees at will absent contractual or statutory restrictions. However, it recognized that this case raised a novel issue: whether an employee can be discharged for refusing to perform an illegal act. The court considered persuasive authority from other jurisdictions, particularly Petermann, which held that public policy forbids discharge in retaliation for refusal to commit illegal acts, as such discharge would encourage unlawful conduct and undermine public welfare.

The court found this principle especially compelling given the regulated nature of medical procedures and the public interest in their lawful administration. It further noted the New Jersey Supreme Court's directive that the law must evolve to reflect contemporary concepts of justice and reject outdated legal distinctions.

Despite these considerations, the court declined to apply a definitive ruling on the motion to dismiss due to an insufficient factual record. Critical unresolved facts included whether defendants knew or should have known the illegality of the requested act, plaintiff’s qualifications, and the reasonableness of the parties’ conduct. These factual issues are essential to determine whether the discharge violated public policy.

Accordingly, the court denied defendants’ motion to dismiss, allowing the case to proceed to further factual development.

Holding and Implications

The court DENIED the defendants' motion to dismiss the complaint for failure to state a cause of action.

This decision means the plaintiff’s claim that discharge for refusal to perform an illegal act may violate public policy is permitted to proceed. The ruling does not establish a binding precedent but signals the court’s openness to adopting a public policy exception to at-will employment discharge if supported by a sufficient factual record. The case will require further factual development to determine whether the discharge was improper under the principles discussed.

FRANCES E. O'SULLIVAN, PLAINTIFF, v. DR. JAMES MALLON, JOSEPH MOZAFFARI, AND WASHINGTON MEMORIAL HOSPITAL, DEFENDANTS.

ROSSETTI, J.C.C. (temporarily assigned).

Plaintiff has instituted suit for breach of an employment contract. This is defendants' motion to dismiss plaintiff's complaint for failure to state a cause of action. Plaintiff was employed by defendants as an X-ray technician until her discharge in March 1976. She alleges that her discharge resulted from her refusals to perform catheterizations. Plaintiff alleges that she was ordered to perform catheterizations and that she refused on the basis that she was not properly trained to perform such a procedure and that it was legally permissible for such a procedure to be performed only by a licensed nurse or physician. Subsequent to her discharge, the New Jersey Board of Medical Examiners concluded that such an act performed by her would be in violation of the Medical Practice Act. In August 1976, the State Board of Nursing issued a cease and desist order to these defendants forbidding the performance of catheterizations by persons not licensed as nurses.

Defendants' motion raises a novel issue concerning the right of an employer to discharge an employee who refuses to perform an illegal act.

The law in this State concerning the authority of an employer to discharge with or without cause in the absence of contractual or statutory restrictions, would appear to be quite clear. Schlenk v. Lehigh Valley Railroad Co., 1 N.J. 131 , 135 (1948); Hindle v. Morrison Steel Co., 92 N.J. Super. 75 , 81 (1966); English v. College of Medicine and Dentistry of N.J., 73 N.J. 20 , 23 (1977). The issue in this case may be distinct from those cases, which recognized that an employer may discharge an employee with or without cause. Id.

The Supreme Court of New Hampshire has recently held that the "termination by the employer of a contract of employment at will which is motivated by bad faith or malice or based on retaliation is not the best interest of the economic system or the public good and constitutes a breach of the employment contract". Monge v. Beebe Rubber Co., 114 N.H. 130, 316 A.2d 549, 551 (1974).

A California case involving an employee who refused to commit perjury at the direction of his employer is more akin to the matter before this court. In Petermann v. International Brotherhood of Teamsters, 174 Cal.App.2d 184, 344 P.2d 25, 27 (D. Ct. App. 1959), the court stated:

The public policy of this state as reflected in the penal code sections referred to above would be seriously impaired if it were to be held that one could be discharged by reason of his refusal to commit perjury. To hold that one's continued employment could be made contingent upon his commission of a felonious act at the instance of his employer would be to encourage criminal conduct upon the part of both the employee and employer and would serve to contaminate the honest administration of public affairs. This is patently contrary to the public welfare. The law must encourage and not discourage truthful testimony. The public policy of this state requires that every impediment, however remote to the above objective, must be struck down when encountered.

This court is of the opinion that the public policy of the State of New Jersey may require that this State adopt the rule established in Petermann, supra, that an employment at will may not be terminated by an employer in retaliation for an employee's refusal to perform an illegal act. This rule is especially cogent where the subject matter is the administration of medical treatment, an area in which the public has a foremost interest and which is extensively regulated by various state agencies. Such a finding may very well be consistent with the existing New Jersey cases that were not concerned with situations where public policy was involved or was being violated.

The viewpoint expressed by our Supreme Court in Schipper v. Levitt Sons, Inc., 44 N.J. 70 , 90 (1965), would appear to be appropriate:

The law should be based on current concepts of what is right and just and the judiciary should be alert to the never-ending need for keeping its common law principles abreast of the times. Ancient distinctions which make no sense in today's society and tend to discredit the law should be readily rejected. . . .

In any event, such a landmark holding should not be applied to a barren factual record. Isaacson v. Boswell, 18 N.J. Super. 95, 96 (App.Div. 1952); Elizabeth Water Co. v. Bontempo, 67 N.J. Super. 8, 13 (App.Div. 1961); Hanover Ins. Co. v. Franke, 75 N.J. Super. 68 , 74 (App.Div.); certif. den., 38 N.J. 308 (1963). There are many facts which would be pertinent to such a holding and which are not stipulated before this court. These include whether the defendants knew or should have known the act in question was illegal, the extent of plaintiff's training and qualifications to perform such a procedure, and generally, the reasonableness of the acts by all of the parties. These are all issues which must be subjected to proofs and which are essential in determining whether plaintiff's discharge was improper and the relationship of that alleged impropriety to the public policy of this State.

Accordingly, the defendants' motion is denied.

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O'SULLIVAN v. MALLON
(Jun 26, 1978)