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Retaliation lawsuit reinstated against L’Oréal

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Stating a terminated attorney’s retaliation charge against L’Oréal USA Inc. is “more than skin deep” a federal appeals court has reinstated litigation against the beauty products company, in a divided opinion.

Steven J. Trzaska was an in-house patent attorney for New York-based L’Oréal USA Inc., heading its regional patent team in Clark, New Jersey, beginning in 2004, according to Tuesday’s ruling by the 3rd U.S. Circuit Court of Appeals in Philadelphia in Steven J. Trzaska v. L’Oréal USA, Inc.; L’Oréal S.A.

In his position, Mr. Trzaska oversaw the process under which the company patented its newly developed products and inventions. In 2014, the annual quota for Mr. Trzaska’s team was 40 patent applications.

At the same time, however, L’Oréal adopted an initiative to improve the quality of is patent applications with the U.S. Patent and Trademark Office, which resulted in fewer inventions submitted to the patent team for vetting, according to the ruling.

Mr. Trzaska approached his superiors and told them that if any attorney filed a patent application that they in good faith did not believe was patentable, it would be in violation of the Rules of Professional Conduct that attorneys are required to follow, which bars them from filing frivolous or bad-faith patent applications.

In the weeks following this meeting L’Oréal offered Mr. Trzaska two severance packages he could accept so long as he left the company.  After he rejected both, L’Oréal fired him, stating his position was no longer needed.

Mr. Trzaska filed suit in U.S. District Court in Newark, New Jersey, for wrongful retaliatory discharge in violation of the New Jersey Conscientious Employee Protection Act. The law protects employees from retaliatory termination if they refuse to participate in illegal activity at their employer’s request, including a practice the employee believes contravenes public policy, according to the ruling.

The District Court dismissed Trzaska’s claims, and Mr. Trzaska appealed. “An employee cannot be terminated for refusing to violate or disregard ethical standards regulating his profession, as public policy in New Jersey requires that he follows them,” said the 2-1 majority opinion.

Mr. Trzaska “has alleged he had a reasonable belief that his employer was either instructing or coercing him to disregard” the professional rules of conduct, which “is a violation of public policy sufficient to serve as the basis” of a claim under the New Jersey law, said the decision, in reversing the lower court’s dismissal.

The dissenting opinion said Mr. Trzaska had failed to present facts that would support “an objectively reasonable belief” the New Jersey law was violated.