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Young v. Schering Corp.

Decided: July 25, 1994.


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

Before Judges Michels, Kestin and Wefing.


The opinion of the court was delivered by


Plaintiff Dr. William B. Young appeals from three orders of the Law Division entered in favor of defendants Schering Corporation (Schering) and Dr. Edwin S. Brokken (Dr. Brokken) that dismissed his original complaint for failing to state a claim upon which relief could be granted following his alleged wrongful termination from his employment by Schering in violation of New Jersey's Conscientious Employee Protection Act (CEPA), N.J.S.A. 39:19-1 et seq., and dismissed his amended complaint on the grounds that it was time-barred by the applicable statute of limitations and by laches.

Plaintiff, a veterinary doctor, was hired in 1981 as Manager of International Clinical Research and Technical Services in Schering's Animal Health Division. In 1984, plaintiff was promoted to Director of that department and in 1986 he was again promoted to Director of Worldwide Clinical Research and International Technical Services. In 1988, Dr. Brokken became plaintiff's immediate supervisor. Sometime thereafter, plaintiff expressed concern to Dr. Brokken about Schering's research and development of three veterinary drugs, Florfenicol, Netobimin and Flunixin. Plaintiff's original complaint specifically alleged that he disagreed with the decision to concentrate research resources on the drug Florfenicol over the other two drugs. Plaintiff believed that Florfenicol would not receive Federal Drug Administration approval because it posed a potential human health hazard. This Conclusion was derived from studies which showed that the drug's analogue, Chloramphenicol, which is banned from use in food animals worldwide, is associated with the human disease of idiosyncratic aplastic anemia.

Plaintiff complained to Dr. Brokken that Schering's investment of resources in researching and developing Florfenicol was an "unrealistic priority of funding" which would hinder the development of the North American market of Flunixin and Netobimin. Plaintiff charged that as a result of his complaints, Dr. Brokken harassed him and unfairly criticized and scrutinized his work and expenses, and that this led to his "unjust and wrongful" termination in August, 1988. According to plaintiff's complaint, Dr. Brokken informed him of the reasons for his termination as follows:

As we discussed today, it has been decided to terminate your employment with Schering Animal Health. This decision is based primarily on certain irregularities in your reporting of expenses. There are also overall general concerns about your performance, but these are immaterial relative to our concerns over your handling of expenses. Effective immediately, therefore, you are removed from your position as Director, International Technical Services and Clinical Research.

Plaintiff claims that the next day, Dr. Brokken defamed and slandered his personal and professional reputation by "gratuitously broadcasting" to members of the animal health community, including Schering employees, that he (plaintiff) was asked to leave Schering because of irregularities in his expense reports. Plaintiff also alleges that since his termination, he has applied for other employment but Dr. Brokken has maliciously interfered with his job applications by defaming and slandering him.

Plaintiff instituted this action against Schering and Dr. Brokken. In Count I plaintiff alleged that he was wrongfully terminated in violation of CEPA after he criticized Schering's decision to research Florfenicol. Plaintiff also alleged in Count I that his discharge was wrongful under the common law and constituted malicious interference with an advantageous business relationship, harassment and intentional infliction of emotional distress. In Count II plaintiff alleged that upon his discharge he was wrongfully denied severance pay due and owing to him under Schering's personnel policies. In Count III plaintiff alleged that Dr. Brokken defamed and slandered him, both personally and professionally, and maliciously interfered with his prospective employment opportunities. Plaintiff sought (1) an injunction to cease Schering's continued violation of CEPA; (2) reinstatement to his former position at Schering; (3) reinstatement of full fringe benefits and seniority rights; (4) compensation for lost wages, benefits and remuneration; (5) an injunction restraining Dr. Brokken from maliciously interfering with his advantageous business relationships and maliciously interfering with his ability to mitigate damages by obtaining subsequent employment; (6) reasonable costs and attorney's fees; (7) punitive damages; (8) compensatory damages; and (9) civil fines against Schering and Dr. Brokken.

After issue was joined, Schering and Dr. Brokken moved to dismiss all of plaintiff's claims other than the CEPA claim. Following argument, the trial court dismissed plaintiff's claim for severance pay alleged in Count II, and dismissed his common law claims based on theories of wrongful discharge, malicious interference with an advantageous business relationship, harassment, and intentional infliction of emotional distress alleged in Count I. The trial court, however, preserved plaintiff's CEPA claim alleged in Count I. The trial court also preserved plaintiff's claims based on theories of defamation, slander and malicious interference with prospective employment opportunities alleged in Count III, but only to the extent that the pleading asserted a cause of action against Dr. Brokken individually for his alleged ultra vires conduct. The trial court dismissed all other common law claims on the ground that the CEPA waiver provision, N.J.S.A. 34:19-8, precluded plaintiff from pursuing those claims.

Thereafter, Schering and Dr. Brokken moved to dismiss the CEPA claim alleged in Count I, contending that it failed to state a claim upon which relief could be granted. Essentially, Schering and Dr. Brokken argued that plaintiff was not a whistle-blower within the meaning or intendment of the statute because he merely expressed disagreement with certain management policies and decisions. In granting the motion to dismiss the claim, the trial court in part reasoned:

Even accepting as true and viewing in the light most favorable to Young, all allegations in his complaint and all reasonable inferences that can be drawn therefrom . . . these averments do not set forth a cause of action under N.J.S.A. 34:19-3a [and] c(1) or c(3) of CEPA. What Young has "disclosed" to Brokken and Schering officials, is his own disagreement with the choice made by both Brokken and Schering, to research the marketability potential of Florfenicol as opposed to Flunixin and Netobimin. He does not allege that he, in his oral and written communications, confronted Brokken or senior colleagues, with a particular law, rule, or regulation that would be violated by the decision to pursue the Florfenicol research, nor does Schering's decision, which this court believes to be a company policy decision, violate public policy. On the contrary, the New Jersey Supreme Court has held:

As a matter of law, there is no public policy against conducting research on drugs that may be controversial, but potentially beneficial to mankind, particularly where continuation of the research is subject to approval by the FDA. . . . To hold otherwise would seriously impair the ability of drug manufacturers to develop new drugs according to their best judgment. [Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 76, 417 A.2d 505 (1980)].

Approximately twenty months after Count I was dismissed, plaintiff filed an amended complaint alleging that he was fired in retaliation for warning Schering and Dr. Brokken that the results of certain test results regarding the adverse effects of Flunixin in cattle should be reported to governmental agencies. Plaintiff contended that Schering's and Dr. Brokken's failure to research a safe dosage and regimen for Flunixin and their failure to report the adverse effects of Flunixin violated the laws of the United States, Canada and the United Kingdom. According to plaintiff, Schering currently markets Flunixin in these countries.

In this amended complaint, plaintiff further alleged that at a 1987 worldwide Schering Animal Health meeting held in Canada, executives determined that the use of Flunixin was associated with kidney damage in cattle and, as such, further studies should be conducted. Schering executives also concluded that the already-discovered adverse effects of Flunixin must be reported to the appropriate regulatory bodies in the countries which market the drug. The complaint alleged that plaintiff informed Dr. Brokken and the Schering executives of his perceived need to report the results of the Flunixin studies to the appropriate governmental authorities. Plaintiff also now alleges in his brief, but not in the amended complaint, that the research of Florfenicol violates Schering's guidelines and policies.

Plaintiff contends that the issues he has raised regarding the safety of Flunixin are genuine, and cites as proof of this the fact that United Kingdom Regulatory Authorities have declared Flunixin to be unsafe, and have rejected the use of Florfenicol in food animals on safety grounds. Plaintiff, therefore, claims that Dr. Brokken's true motive in defaming his character to his prospective employers was to destroy his credibility so that his concerns over the animal health drugs would not be seriously considered. The trial court on motion by Schering and Dr. Brokken dismissed Counts I and II of the amended complaint on grounds that the claims were barred by the statute of limitations set forth in N.J.S.A. 34:19-5 and by the doctrine of laches. This appeal followed.


We are satisfied that the trial court properly dismissed plaintiff's amended complaint on the ground that the CEPA claim asserted therein was barred by the one-year statute of limitations set forth in N.J.S.A. 34:19-5. Approximately twenty months after the dismissal of Count I of the original complaint which set forth plaintiff's CEPA claim, and after the CEPA one-year statute of limitations had run, plaintiff filed an amended complaint. Unlike the original complaint, which simply alleged that plaintiff disagreed with Schering and Dr. Brokken's choice to give an unrealistic funding priority to Florfenicol, the amended complaint asserted that the emphasis on Florfenicol research "has caused Schering to refuse to respond to admonitions by the plaintiff to carry out work ...

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