A lawyer who claims her firm fired her for threatening to report a violation of ethics rules governing civil case settlements can sue under New Jersey's whistleblower law, a state appeals court says.
The Appellate Division held on Thursday that a trial judge erred in throwing out the claim based on his view that the alleged misconduct was not covered by the Conscientious Employee Protection Act and because plaintiff Melissa Morris did not follow through on her threat to go to authorities.
The ruling, in Morris v. Greitzer and Locks of New Jersey, allows Morris to pursue her CEPA claim against what is now the Locks Law Firm of Philadelphia over its handling of an aggregate settlement of suits over fen-phen diet drugs.
When Morris joined the firm's Cherry Hill, N.J., office as an associate in March 2000, bringing nine case files with her, partner Gene Locks allegedly promised her 50 percent of all fees earned on any of her cases that were completed by Dec. 31, 2000. That beat the offer she got from her old firm, Ominsky & Messa in Philadelphia: a 30 percent cut of fees on any cases she left behind, upped to 40 percent in diet-drug cases.
Morris' dispute with the Locks firm concerns the only one of her cases not already pending in a Pennsylvania court -- a fen-phen claim by her neighbor Alan Weber over the death of his wife. After Morris' move, Weber signed a new agreement with the Locks firm, opted out of a diet-drug class action and sued in Middlesex County Superior Court.
Morris alleges that in September 2000, James Pettit, managing partner of the Cherry Hill office, told her he settled Weber's case for more than four times the amount Weber authorized but he refused to tell her how much. Around the same time, Pettit said he feared some diet-drug clients might not accept the amount allocated to them so he wanted Weber to sign a release stating consideration of only one dollar, Morris claims.
She also alleges that Pettit said he was withholding 10 percent of each diet-drug client's settlement in case anyone objected to the amount they got. Morris understood this to mean that Pettit would use the withheld amounts to give more money to the ones who were not happy, and when she asked Pettit if this was ethical, he allegedly told her, "Melissa, I am doing the best I can."
Morris claims that when she raised the issue of her 50 percent share of fees for the Weber case on Oct. 2, 2000, Pettit denied the existence of the fee agreement. The next day, he told her that he had made a mistake about the size of the Weber settlement -- that it was actually only three times the authorized amount.
That created a problem for Morris, who had already given Weber the good news about the higher figure. Weber, who wanted outside proof of the amount of his settlement, met with Pettit and afterwards told Morris he feared he would lose the settlement altogether if he challenged the firm, she alleges.
Morris continued to assert her right to the fees and on Nov. 14, 2000, was told to send her case files to the firm's Philadelphia office, which she alleges violated an agreement that she would work on her own cases. Interpreting the demand as a first step in firing her, she did not comply.