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D''Agostino v. Johnson & Johnson Inc.

Decided: March 30, 1992.


On appeal from the Superior Court of New Jersey, Law Division, Essex County.

Michels, O'Brien and Conley. The opinion of the court was delivered by Michels, P.J.A.D.



Defendants Johnson & Johnson, Inc. (J & J), Robert N. Wilson (Wilson), J & J's Vice Chairman, and Ronald G. Gelbman (Gelbman), a J & J Company Group Chairman, appeal pursuant to leave granted by this court from an order of the Law Division that denied their motions for summary judgment in this action by plaintiff Richard J. D'Agostino to recover damages for the alleged retaliatory termination of his employment by Cilag, A.P. (Cilag), a Swiss subsidiary of Johnson & Johnson,

Inc. Plaintiff claims that he was fired by Cilag for his refusal to approve payments to a Swiss pharmaceutical official and that defendants made defamatory statements about him and engaged in a conspiracy to prevent him from obtaining other employment in the pharmaceutical industry. Under Swiss law, there is no cause of action for retaliatory termination and plaintiff's claims would be barred by the Swiss one-year limitations period. The Law Division, however, applied New Jersey law and denied summary judgment, finding that plaintiff had alleged sufficient facts for his claim under Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 417 A.2d 505 (1982), to proceed to trial. The pivotal issue raised by this appeal, therefore, is whether Switzerland has a more significant governmental interest in the resolution of this matter so that Swiss law should have been applied by the trial court rather than the law of New Jersey. We are satisfied that Swiss law should have been applied and, therefore, reverse and enter summary judgment in favor of defendants.

The factual background giving rise to this appeal began in December 1984, when plaintiff, who was a citizen of the United States but a resident of Switzerland, was hired as General Manager of the Swiss Home Market Division of Cilag, a Switzerland corporation and a subsidiary of J & J. Plaintiff was hired by Dr. Hans Schmid (Dr. Schmid), Chairman of Cilag, and an announcement of plaintiff's employment was issued by Dr. Schmid on the letterhead of Johnson & Johnson International, which is located in New Brunswick, New Jersey. J & J explained that such an announcement was routinely issued from Switzerland on the Johnson & Johnson International stationery and widely distributed as a matter of course to many of the executives of J & J and its subsidiaries.

Plaintiff signed an employment contract with Cilag, dated December 21, 1984, which designated that Swiss law would govern disputes arising from the employment contract and that the City of Schaffhausen, Switzerland was the place of venue. The contract further provided for an at-will employment and

that either party could terminate the employment relationship on six-months notice. Plaintiff commenced working for Cilag at its Schaffhausen, Switzerland facility in April 1985. He acknowledged that he was on a six-month probationary period. As General Manager of Cilag, plaintiff performed his duties in Schaffhausen and reported to Dr. Schmid and Paul G. Reinstadtler (Reinstadtler), Managing Director of Cilag, Germany. According to J & J, plaintiff's duties involved the marketing and registration of pharmaceutical products in Switzerland and plaintiff had no duties outside Switzerland and had no position with J & J.

Plaintiff maintains that he received direct instruction from J & J officers located at corporate headquarters in New Jersey. Plaintiff received a letter dated June 4, 1985 from the Office of General Counsel of J & J regarding the J & J Policy Statement which prohibits use of corporate funds for unlawful purposes. According to plaintiff, this Policy Statement refers to the necessity of compliance with the Federal Foreign Corrupt Practices Act, 15 U.S.C.A. § 78dd-1, et seq. and is applicable to "J & J and all its domestic and foreign subsidiaries." With this Policy Statement, plaintiff received a letter from the Chairman of J & J announcing a "worldwide" policy binding on all J & J employees. Plaintiff indicates that when he received the letter from General Counsel, he promptly replied that he had not received a copy of the Policy Statement, but would execute said document upon receipt.

In June 1985, plaintiff was in New Brunswick, New Jersey, to attend a meeting of the managing directors of J & J's Cilag Companies. At this meeting, plaintiff alleges that he was asked by Wilson, who, in addition to being Vice Chairman of J & J, was also Executive Vice President of J & J International, about the status of Immunox, a synthetic hormone under development. When plaintiff said that Immunox had been rejected for the second time by Swiss authorities, plaintiff claims that Dr. Schmid and a Dr. H.U. Balthasar (Balthasar) "jumped up" and assured everyone at the meeting that the

Immunox situation was under control. According to plaintiff, both Dr. Schmid and Dr. Balthasar appeared to be very excited at this time. Plaintiff claims that his job performance was evaluated largely by his ability to gain approval of compounds such as Immunox, referring to a letter received from his supervisor, Reinstadtler, which stressed corporate objectives, including the "mandatory" goal of obtaining quick approval of new pharmaceutical compounds offered by J & J's "worldwide research centers."

Sometime in June 1985, plaintiff received a voucher authorizing payment of "consulting fees" to a Dr. Rudolph Preisig (Preisig). Dr. Preisig was the president of the "college of experts" of the International Office for the Control of Medicaments, which controls the registration of new drugs in Switzerland. Suspecting that the payment of such consulting fees was tantamount to a bribe, plaintiff did not sign the voucher and asked his secretary to organize a dossier regarding the payments to Dr. Preisig. Plaintiff admits that at this point, he did not ask his superiors, Dr. Schmid and Reinstadtler, or J & J's General Counsel, George Frazza (Frazza), about the payments to Dr. Preisig. Plaintiff, however, received an inquiry from Dr. Balthasar as to why Dr. Preisig had not received payment of his consulting fees.

Several days later, plaintiff received a dossier containing documents which stated the importance of Dr. Preisig due to his official position, and the importance of drug testing to J & J. This dossier contained no contract with Dr. Preisig. At this point, plaintiff went to Dr. G. Kretzschmar, the Cilag executive from whom the voucher in question originated, and was told that there was no contract with Dr. Preisig. Plaintiff did not ask Dr. Balthasar, Dr. Schmid, Frazza or Cilag's lawyer if such a contract existed. According to plaintiff, Dr. Kretzschmar told him,

you have to pay, you have to go along. He says, it has been going on for a long time. Be happy that it wasn't more.

However, Dr. Kretzschmar did not indicate to plaintiff that the payments to Dr. Preisig were unlawful and plaintiff did not recall if he said anything about the payments being unlawful.

Plaintiff received a second payment voucher for payment to Dr. Preisig. Sometime after receipt of the voucher, plaintiff met with Reinstadtler and Dr. Kretzschmar. Dr. Kretzschmar asked plaintiff if he was going to sign the voucher for payment to Dr. Preisig, and plaintiff replied that he would not sign it until he had "a better explanation." Reinstadtler thereupon excused himself from the meeting because he had to meet with Dr. Schmid. According to plaintiff, he called Reinstadtler that night because they were supposed to have dinner together, and Reinstadtler canceled their dinner because he was still talking to Dr. Schmid. The next day plaintiff was notified that he was being terminated. Plaintiff says he was told by Reinstadtler: "I have been talking with Schmid and you have to go . . . ." Plaintiff contends that his termination was based on his failure to approve the payments to Dr. Preisig.

After his termination, plaintiff claims that he telephoned Frazza, and told him that there were some "funny business" and "credo violations" going on at Cilag. According to Frazza, plaintiff never mentioned illegal payments to Dr. Preisig and he does not recall if plaintiff used the phrase "funny business" in their conversation. Plaintiff also indicates that he spoke with Frank Ziegler (Ziegler), who was located at the J & J Company in Sprittenbach, about credo violations. However, plaintiff did not specifically refer to the payments to Dr. Preisig in this conversation.

Subsequent to his termination, Cilag and plaintiff began negotiating a separation agreement. Eventually, an agreement was reached between the parties, and a settlement document was prepared. However, plaintiff refused to sign the document because it did not reflect all the terms he had discussed with Cilag. Moreover, plaintiff claims that ...

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