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Fired L'Oreal Patent Lawyer Wins Whistleblower Appeal

By George Khoury, Esq. on July 28, 2017 | Last updated on March 21, 2019

The Third Circuit reversed the district court's dismissal of a whistleblower case against a make-up company because the claims were more than just "skin deep."

Perhaps the most fascinating aspect of this case is the court's acceptance that a lawyer's whistleblower claim can be premised upon an obligation under the code of professional responsibility. The lower court dismissed the case partly based on the fact that the rules of professional responsibility were not laws that the makeup company had to abide by, and therefore did not fit the New Jersey statute at issue. The Third Circuit disagreed and specifically ruled that the rules of professional conduct could be used as the basis of a whistleblower claim premised on NJ's Conscientious Employee Protection Act (CEPA).

Details of the Case

Steven Trzaska, a patent attorney for L'Oreal, filed a lawsuit after being terminated for protesting a strict policy that he believed violated his professional duties as a patent attorney. The policy, allegedly, would have forced him, and others on his team, to file patent applications without a good faith belief that the applications were meritorious.

Essentially, L'Oreal instituted two new policies that created a sort of in-house patent lawyer conundrum. On the one hand, it issued a patent application quota, in essence requiring attorneys to meet a certain numerical goal for number of patent applications filed. While on the other hand, it created a policy that drastically reduced the number of inventions and potential patentable items for the attorneys to draw up applications that could be filed.

Trzaska raised this concern to his employer, explaining that he was essentially being required to violate his professional duties because the lack of new patentable projects and the new quota requirement meant he would need to submit applications for projects he did not believe were patentable in order to meet the quota.

Prior to the reversal, the case had been dismissed on a 12(b)6. As such, now the case can proceed, at least to summary judgment, where L'Oreal will likely try to cover this whole thing up with a well laid foundation.

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