Quick Resolution of Alleged Patent Quota Whistleblower Case against L’Oreal

Judge Susan Wigenton of the Unites States District Court for New Jersey quickly dismissed a whistleblower wrongful retaliatory firing claim against L’Oreal. L’Oreal successfully moved for dismissal at the earliest stage in the litigation, before even answering the Plaintiff’s complaint.  Judge Wigenton found that even assuming all the allegations alleged by the Plaintiff were true, there would not be a viable cause of action for wrongful retaliatory firing.        
 
The Plaintiff, Steven J. Trzaska, was a patent attorney employed by L’Oreal in its Clark New Jersey facility until December 2014.  Mr. Trzaska was employed by L’Oreal for 10 years and oversaw the Clark facility’s patent application process.  Trzaska’s complaint alleged that L’Oreal had a yearly quota of 500 patent applications and failures to meet quotas would negatively affect “careers and/or continued employment.”  Trzaska’s group filed only half of its quota of patent applications in 2014.  Trzaska informed his superiors that “neither he nor the patent attorneys who reported to him were willing to file patent applications that the attorneys believed were not patentable . . . solely for the purpose of meeting” quotas.   The complaint alleged that Trzaska believed that he would “run afoul of ethical and legal mandates governing their practice as patent attorneys” by filing certain applications
 
The New Jersey Legislature enacted the whistleblower statute, formerly known as the Conscientious Employee Protection Act (“CEPA”), to “protect and encourage employees to report illegal or unethical workplace activities and to discourage public and private sector employers from engaging in such conduct.” Abbamont v. Piscataway Twp. Bd. of Educ., 138 N.J. 405, 431 (1994).  Judge Wigenton found that the New Jersey Rules of Professional Conduct for attorneys do not forbid L’Oreal from adopting metrics or measurable goals for its cosmetic business or define how L’Oreal may go about securing or maintaining intellectual property rights. Furthermore, the Court found that CEPA protections come into effect when “a reasonable lay person would conclude that illegal activity was going on or at the very least, is imminent”  and it “is not enough to claim that a policy may, possibly, at some time in the future, violate a rule or law.”  Judge Wigenton held that pressure from management to meet a quota is not equivalent to instructions to violate rules of attorney conduct, or other laws or regulations.  Therefore, no CEPA violation occurred and the complaint was dismissed. 
 
The Intellectual Property Department and the Employment Law Department at Bathgate, Wegener & Wolf counsels employers and employees regarding IP issues and their effect on the employment relationship. Please contact us with any questions that you may have. 

By Daniel F. Corrigan