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Date: 08-01-2017

Case Style: Steven J. Trazaska v. L'Oreal USA, Inc.; L'Oreal, S.A.

Case Number: 15-3810

Judge: Ambro

Court: United States Court of Appeals for the Third Circuit on appeal from the District of New Jersey (Essex County)

Plaintiff's Attorney: Dan Bencivenga and Harold Goodman

Defendant's Attorney: George P. Barbatsuly, Laura Scully, Christopher Carton, Eric A Savage

Description: Steven J. Trzaska was an in-house patent attorney for
L’Oréal USA, Inc. (“L’Oréal USA”), a cosmetics company.
It fired him, he alleges, for his refusal to violate various
ethical rules that govern the legal profession. He asserts that
this action violated New Jersey employment law, as one
cannot be fired for refusing to violate regulations or public
3
policy at the instruction of his employer. The District Court
dismissed Trzaska’s claim without discovery. Because his
allegations against the beauty-products corporation are more
than skin-deep, we reverse.
I. BACKGROUND
Beginning in 2004, Trzaska was employed as the
head of L’Oréal USA’s regional patent team in Clark, New
Jersey, overseeing the process by which the latter would
patent the company’s newly developed products and
inventions. The process would begin when an inventor
submitted to the patent team an “invention disclosure” for a
new product describing its potentially patentable subject
matter. A patent attorney on the team then vetted the
invention disclosure to determine the product’s patentability
by interviewing the inventor and searching L’Oréal USA’s
internal database to confirm that the subject matter of the
product did not already exist. If the patent team determined
that the product was patentable, an attorney prepared the
necessary paperwork and submitted a patent application to the
United States Patent and Trademark Office (“USPTO”).
As with any legal practitioner, the attorneys on
L’Oréal USA’s patent team were required to follow various
ethical standards known as Rules of Professional Conduct
that guide and regulate the legal profession. Because he was
admitted to practice law in Pennsylvania and before the
USPTO, both the Rules of Professional conduct established
by the Supreme Court of Pennsylvania and the professional
rules promulgated by the USPTO (collectively, the “RPCs”)
governed Trzaska’s conduct. In relevant part, these RPCs
barred attorneys from filing frivolous or bad-faith patent
applications or from knowingly making false statements
4
before a tribunal.1
Violations of the RPCs could result in
sanctions or disbarment.
L’Oréal, S.A.—the French parent company of L’Oréal
USA (collectively, “L’Oréal”)—established a global quota of

1
In relevant part, the RPCs of the USPTO provide:
A practitioner shall not bring or
defend a proceeding, or assert or
controvert an issue therein, unless
there is a basis in law and fact for
doing so that is not frivolous,
which includes a good-faith
argument for an extension,
modification or reversal of
existing law[;]
and
A practitioner shall not knowingly
. . . [m]ake a false statement of
fact or law to a tribunal or fail to
correct a false statement of
material fact or law previously
made to the tribunal by the
practitioner . . . .
37 C.F.R. §§ 11.301, 11.303(a)(1) (2013). Trzaska also
asserts that 37 C.F.R. §§ 11.18, 11.113, 11.201, and 11.804
are relevant, as they relate to other pertinent forms of attorney
misconduct. Parallel provisions appear in Rules 1.13, 3.1,
3.3, and 8.4 of the Pennsylvania RPCs. See 204 Pa. Code §
81.4.
5
patent applications that each regional office must file each
year. In 2014, the annual quota for Trzaska’s team was 40
patent applications. Management officials at L’Oréal told
Trzaska and his team members that, if they failed to meet that
quota, “there would be consequences which would negatively
impact their careers and/or continued employment.” J.A. at
32. At the same time, L’Oréal adopted an initiative to
improve the quality of patent applications it filed with the
USPTO. Adopting this company policy resulted in fewer
invention disclosures submitted to the patent team for vetting.
With two competing company policies in place—one
that required the patent team to meet an annual minimum of
patent applications and one that effectively reduced the
amount of invention disclosures that could be evaluated—
Trzaska’s team found itself in a predicament. According to
several members of the team, there were very few patentable
products submitted to it for vetting while L’Oréal continued
to demand that the team meet the annual quota.
Consequently, the patent team did not believe it was able to
meet the mandatory quota for 2014 without filing patent
applications for products that it did not in good faith believe
were patentable. And, as L’Oréal had threatened, if the team
did not meet that quota, the patent attorneys’ job security
would be in peril.
In the hope of resolving this professional Catch-22,
Trzaska approached his superiors. He explained that neither
he nor his team would be willing to file any patent
applications for products that they in good faith believed were
not patentable. He advised management that if any attorney
on the patent team filed such a patent application, he or she
would be in violation of the ethical standards—or RPCs—to
which they were bound as licensed patent attorneys. Though
Trzaska did not identify any offending patent application that
he nonetheless was instructed to file, he informed his
6
superiors that he would not do so should he come across one,
even if that meant that the annual quota would not be met.
Apparently L’Oréal did not receive well Trzaska’s
protest. In the weeks following Trzaska’s meeting with
management, L’Oréal offered him two severance packages
that he could accept so long as he left the company. If he
chose not to leave, he was instructed to “go back to [his]
office and get back to work.” J.A. at 34. After he rejected
both severance packages offered, L’Oréal fired Trzaska,
stating that his position was no longer needed.
Trzaska brought suit in District Court against both
L’Oréal entities for wrongful retaliatory discharge in violation
of the New Jersey Conscientious Employee Protection Act
(“CEPA”), N.J. Stat. Ann. § 34:19-1 et seq. Among other
things, CEPA protects an employee from retaliatory
termination following his disclosure of the employer’s
violation of law or his refusal to participate in illegal activity
at the request of the employer, including a practice that the
employee believes contravenes public policy. Trzaska
alleged he was fired because he refused to participate in an
illegal activity by filing frivolous or bad-faith patent
applications that would violate the RPCs and his ethical
obligations as a licensed patent attorney.
The District Court dismissed Trzaska’s claims under
Federal Rule of Civil Procedure 12(b)(6) because in its view
the RPCs were an inadequate basis to maintain his CEPA
claim. It reasoned that, because the RPCs do not govern any
activities, ethical obligations, or business decisions of the
L’Oréal entities, they did not violate any law on which a
CEPA claim could be based. It further determined that
Trzaska failed to show he had a reasonable belief that L’Oréal
had violated a law or that a violation was imminent (which it
deemed a necessary element for a CEPA claim).
7
(Interestingly, the Court also dismissed Trzaska’s claims
against L’Oréal, S.A. for the same reasons even though it
only sought a Rule 12(b)(5) dismissal for insufficient service
of process.) This appeal followed.
II. JURISDICTION AND STANDARD OF REVIEW
We have jurisdiction over final orders of the District
Court per 28 U.S.C. § 1291. We review de novo a district
court’s dismissal of a complaint under Rule 12(b)(6) for
failure to state a claim. Chavarriaga v. N.J. Dep’t of Corr.,
806 F.3d 210, 218 (3d Cir. 2015). When conducting our
review, “we must accept the allegations in the complaint as
true . . . [but] are not compelled to accept unsupported
conclusions and unwarranted inferences, or a legal conclusion
couched as a factual allegation.” Morrow v. Balaski, 719
F.3d 160, 165 (3d Cir. 2013) (quotations omitted).
III. ANALYSIS
A. RPCs and CEPA Violations
“CEPA . . . protect[s] employees from retaliatory
actions by employers . . . .” Blackburn v. United Parcel
Serv., Inc., 179 F.3d 81, 91 (3d Cir. 1999) (quotations
omitted). To that end, courts construe it flexibly. Id. It
provides in relevant part:
An employer shall not take any retaliatory
action against an employee because the
employee does any of the following:
. . .
(c) Objects to, or refuses to participate in any
activity, policy or practice which the employee
reasonably believes: (1) is in violation of a law,
8
or a rule or regulation promulgated pursuant to
law . . .; (2) is fraudulent or criminal . . .; or (3)
is incompatible with a clear mandate of public
policy concerning the public health, safety or
welfare or protection of the environment.
N.J. Stat. Ann. § 34:19-3(c).2
Accordingly, a plaintiff must
identify a law, rule, regulation, or clear mandate of public
policy, that supports the basis of his CEPA claim as well as
“unacceptable practices in the defendant employer’s

2 Trzaska insists that N.J. Stat. Ann. § 34:19-3(a) also
applies to his claims because the RPCs imposed ethical duties
on “L’Oréal [that it] owed to the PTO.” Br. for Appellant at
40. That section protects an employee from retaliatory
discharge following the employee’s whistleblowing of his
employer’s illegal conduct. Despite Trzaska’s argument, we
agree with the District Court that that the RPCs—which
regulate attorney conduct—do not govern the business
activity of non-legal practitioners such as L’Oréal. Under
Trzaska’s theory, there is no violation of that CEPA
provision. However, as discussed below, L’Oréal’s alleged
instruction to disregard the RPCs constitutes a CEPA
violation under N.J. Stat. Ann. § 34:19-3(c) (refusal to
participate in illegal activity). It is possible, therefore, that
this violation of subsection (c) could be bootstrapped as a
violation of subsection (a) (“disclos[ing] . . . to a supervisor . .
. an activity, policy, or practice of the employer” that “is in
violation of the law”). Trzaska has made no such allegation,
however, and thus we need not address this hypothetical
argument.
9
business” that contravene the identified authority. Hitesman
v. Bridgeway, Inc., 93 A.3d 306, 321 (N.J. 2014).3

Following these guidelines, an allegation that an
employer instructed, coerced, or threatened its patent attorney
employee to disregard the RPCs binding him violates a clear
mandate of public policy within the meaning of CEPA. See
N.J. Stat. Ann. § 34:19-3(c). Terminating that employee for
refusing to follow such an instruction or its equivalent
triggers CEPA protection for two reasons.
First, “[a] patent by its very nature is affected with a
public interest.” Blonder-Tongue Labs., Inc. v. Univ. of Ill.
Found., 402 U.S. 313, 343 (1971) (quotations omitted). It
“favors the maintenance of a well-functioning patent system.”
Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S. Ct.
843, 851 (2014); see also King Drug Co. of Florence, Inc. v.
Smithkline Beecham Corp., 791 F.3d 388, 394 (3d. Cir. 2015)
(“A patent, consequently, is a special privilege designed to
serve the public . . . .” (quotations omitted)). Accordingly,
“the relationship of attorneys to the Patent Office requires the
highest degree of candor and good faith,” Kingsland v.
Dorsey, 338 U.S. 318, 319 (1949) (quotations omitted), which
includes adherence to the USPTO’s RPCs and regulations

3 Our dissenting colleague believes that “a cause of
action under CEPA is stated only when illegal activity is
occurring or imminent.” Dissent at 5. We disagree, as “when
a plaintiff brings an action pursuant to [CEPA], the trial court
must identify a statute, regulation, rule, or public policy that
closely relates to the complained-of conduct. . . . [A] plaintiff
[need not] allege facts that, if true, actually would violate that
statute, rule, or public policy.” Dzwonar v. McDevitt, 828
A.2d 893, 901 (N.J. 2003). Regardless, as discussed below,
Trzaska has alleged conduct that contravenes public policy.
10
governing the submission of good-faith, non-frivolous patent
applications. A well-functioning patent system cannot exist
without it. An employer’s directive to its employees to
disregard these RPCs thus crosses a clear mandate of public
policy. Moreover, while the USPTO’s RPCs fall within
CEPA’s public policy provision, N.J. Stat. Ann. § 34:19-
3(c)(3), they also are codified federal regulations, implicating
N.J. Stat. Ann. § 34:19-3(c)(1) as well. See, e.g., 37 C.F.R.
§§ 11.301, 11.303(a)(1).
Second, rules of professional conduct in general can
underlay a CEPA violation. “In New Jersey, [the courts] are
deeply committed to the principle that an employer’s right to
discharge an employee carries a correlative duty to protect his
freedom to decline to perform an act that would constitute a
violation of a clear mandate of public policy.” Abbamont v.
Piscataway Twp. Bd. of Educ., 650 A.2d 958, 971 (N.J. 1994)
(quotations omitted). To stymie that duty finds the employer
afoul of CEPA. See Parker v. M&T Chemicals, Inc., 566
A.2d 215, 219-20 (N.J. Super. Ct. App. Div. 1989) (in-house
patent counsel’s adherence to a state Supreme Court’s ethical
Rules of Professional Conduct constitutes a clear mandate of
public policy that CEPA protects); see also Weiss v.
Carpenter, Bennett & Morrison, 672 A.2d 1132, 1144 (N.J.
1996) (holding generally, in the arbitration context, that New
Jersey “precedents demonstrate quite clearly that the Rules of
Professional Conduct . . . express a clear mandate of public
policy”); Pierce v. Ortho Pharm. Corp., 417 A.2d 505, 512
(N.J. 1980) (in a case giving rise to the passage of CEPA, the
New Jersey Supreme Court determined that nonadministrative
Rules of Professional Conduct may contain
expressions of public policy, and a request to violate them
serves as a basis for wrongful termination). 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 follow them.
11
Given these two principles—that the abuse of the
patent application system and the violation of Rules of
Professional Conduct harm the public’s interest—an
employer’s policy effecting the disregard of the RPCs
contravenes clear mandates of public policy within the
meaning of CEPA. As such, an allegation that an employer
promulgates such a policy serves as an adequate basis to
bring a CEPA claim. See Tartaglia v. UBS PaineWebber
Inc., 961 A.2d 1167, 1182-83 (N.J. 2008) (CEPA requires “an
expression by the employee of a disagreement with a
corporate policy, directive, or decision based on a clear
mandate of public policy,” and in those contexts the
“termination [itself] violates a public policy mandate.”)
The District Court determined that the applicable
RPCs could not serve as a basis for a CEPA violation because
they do not regulate L’Oréal’s business practices. That
conclusion may be correct, but the basis of the CEPA claim
here is not L’Oréal’s violation of the RPCs; rather, it is the
instruction to its employees that would result in the disregard
of their RPC duties and hence violates a mandate of public
policy. CEPA is clear: an employee cannot be terminated for
refusing to participate in conduct that he reasonably believes
violates public policy. This is especially so because we must
construe the statute’s protections liberally. See Blackburn,
179 F.3d at 90. Accordingly, the failure to follow instructions
that effectively disregard RPCs forms a CEPA claim.
B. Trzaska’s Allegations
The District Court determined that, regardless whether
an employer’s instruction to an employee that would result in
the disregard of that employee’s professional ethical
standards can be the basis of a CEPA claim, Trzaska failed to
plead adequately such a claim. It found that Trzaska did not
12
allege that L’Oréal had violated a law or public policy or that
such a violation was imminent. His apparent failure to do so,
the Court believed, was fatal to his CEPA claim. We
disagree.
First, as stated above, professional ethical codes can
serve as a basis to state a claim under CEPA when an
employee is coerced to disregard them. In New Jersey
the sensible meaning of CEPA is that the
objecting employee must have an objectively
reasonable belief, at the time of objection or
refusal to participate in the employer’s
offensive activity, that such activity is . . .
incompatible with a constitutional, statutory or
regulatory provision, code of ethics, or other
recognized source of public policy. Specific
knowledge of the precise source of public
policy is not required.
Mehlman v. Mobil Oil Corp., 707 A.2d 1000, 1015 (N.J.
1998). Trzaska’s allegations thereby come within the scope
of CEPA protection, especially in light of the liberal
construction afforded the statute. See Blackburn, 179 F.3d at
90.
Second, we disagree with the District Court that
Trzaska’s CEPA claim should be brushed away because his
“pleadings contain no evidence that [L’Oréal] demanded or
ordered that [he] or others relinquish their professional
judgments or obligations.” Trzaska v. L’Oréal USA, Inc. et
al., Civil Action No. 2:15-cv-02713-SDW-SCM, 2015 WL
6687661, at *5 (D.N.J. Oct. 30, 2015). That statement
misapplies the standard of review at the motion-to-dismiss
stage. There, a court must consider no more than whether the
complaint establishes “enough facts to raise a reasonable
13
expectation that discovery will reveal evidence of the
necessary elements” of the cause of action. Connelly v. Lane
Constr. Corp., 809 F.3d 780, 789 (3d Cir. 2016) (quoting
Phillips v. Cty. of Allegheny, 515 F.3d 224, 234 (3d Cir.
2009) (quotation and alteration omitted)). A plaintiff’s
allegations must be accepted as true and construed in the light
most favorable to him when determining if his complaint
should be dismissed. Phillips, 515 F.3d at 231 (quotations
omitted).
Trzaska’s complaint has met this threshold. It alleges
there was a company policy of meeting the patent application
quota regardless whether the applications submitted were for
products that he did not believe were patentable. He also
claimed that he and other colleagues were implicitly
instructed to disregard the RPCs in order to meet the quota
and that his supervisors expressly rejected his concern about
violating the RPCs. And, to close the circle, L’Oréal
threatened to terminate his employment if he did not meet the
quota. J.A. at 32, 35-36. If these allegations are taken as
true, which they must be for the purposes of deciding a
motion to dismiss, Trzaska has alleged a colorable violation
of CEPA. Whether he was in fact instructed to violate the
RPCs is determined later in the litigation process.4


4 Our dissenting colleague does not refute that these
allegations have been pled in Trzaska’s first amended
complaint; rather, he thinks those factual allegations are
insufficient to state a claim. We again part ways. First, the
dissent describes these allegations as “conclusory.” Dissent
at 6, 9. We think that characterization mistakenly blurs the
distinction between factual allegations—which we must
accept as true—with conclusory legal assertions—which we
can reject. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
14

Second, Trzaska has pled that he and his colleagues were
instructed to meet the quota “or else,” and that management
ignored his concerns about violating his ethical duties. Given
the facts provided in his complaint, Trzaska has alleged he
had a reasonable belief that his employer was either
instructing or coercing him to disregard the RPCs, which—as
the dissent agrees—is a violation of public policy sufficient to
serve as the basis of a CEPA claim. That reasonable belief is
all that is required at the pleading stage. Dzwonar, 828 A.2d
at 900-02. The heightened standard that the dissent would
have us impose is inappropriate when considering a motion to
dismiss.
On this point, the dissent believes that we should hold
Trzaska to a higher standard because he is an attorney.
Dissent at 9. It cites to Tartaglia v. UBS PaineWebber Inc.,
961 A.2d 1167 (N.J. 2008), for this assertion. Tartaglia dealt
with a claim brought under Pierce v. Ortho Pharmaceutical
Corporation, 417 A.2d 505 (N.J. 1980), which created the
common-law antecedent to CEPA. In Tartaglia, the plaintiff
sought relief from wrongful termination following whistleblowing
of her employer’s own ethical violations. The New
Jersey Supreme Court determined that the plaintiff, an
attorney who internally complained about her employer’s
RPC violation, was held to a “higher standard” of
demonstrating an actual RPC violation occurred (as opposed
to a reasonable belief that one occurred) because, as an
attorney, she was more knowledgeable about the RPCs and
under them was obligated to report another’s violation.
Tartaglia, 961 A.2d at 1184-85. That case does not apply to
what is before us: it dealt with an attorney-employer’s own
RPC violations (ours does not); a Pierce whistle-blowing
15
Trzaska’s amended complaint makes allegations that
are hardly cosmetic. Hence he has sufficiently pled a CEPA
claim, and that claim should not be dismissed at this stage in
the litigation.
C. L’Oréal, S.A.’s Motion to Dismiss
L’Oréal, S.A. filed a motion to dismiss Trzaska’s
appeal as to it because Trzaska did not initially file a notice of
appeal as required by Federal Rule of Appellate Procedure
3(c)(1)(B). Specifically, L’Oréal USA and L’Oréal, S.A. are
two separate defendants, they have separate counsel, and they
each filed separate motions to dismiss Trzaska’s complaint on
different grounds. The District Court dismissed the complaint
against L’Oréal USA for the reasons stated above and, in a
companion order issued the same day, denied as moot
L’Oréal, S.A.’s motion to dismiss for improper service and
instead dismissed Trzaska’s complaint against it for the same
reasons the Court gave in dismissing the complaint against
L’Oréal USA. Trzaska only attached to his notice of appeal
the order that dismissed his complaint as to L’Oréal USA.
A notice of appeal must specify the “judgment, order,
or part thereof being appealed.” Fed. R. App. P. 3(c)(1)(B).
However, “[t]his court will exercise appellate jurisdiction
over orders that are not specified in the notice of appeal
where: (1) there is a connection between the specified and
unspecified orders; (2) the intention to appeal the unspecified
order is apparent; and (3) the opposing party is not prejudiced

claim regarding that violation (ours does not); and a claim
that has a statutory corollary in N.J. Stat. Ann. § 34:19-3(a)
(which we have noted above Trzaska has not sufficiently pled
as stated in his complaint, as opposed to his claims under §
34:19-3(c)).
16
and has a full opportunity to brief the issues.” Polonski v.
Trump Taj Mahal Assocs., 137 F.3d 139, 144 (3d. Cir. 1998)
(citations omitted). In this vein, “our jurisprudence liberally
construes notices of appeal.” Sulima v. Tobyhanna Army
Depot, 602 F.3d 177, 184 (3d Cir. 2010) (quotations omitted).
The Polonski factors point to our jurisdiction. No
doubt there is a connection between the specified and
unspecified orders; they were issued the same day and relied
exclusively on the same opinion. Given that Trzaska sought
appellate review of that opinion, it is easy to infer his
intention to appeal both orders that relied on it in dismissing
his entire complaint against both defendants. Finally,
L’Oréal, S.A. has failed to demonstrate how it has been
prejudiced and has not had a full opportunity to brief the
issues. The Clerk of Court sent notice of the appeal to
L’Oréal, S.A.’s counsel shortly after it was filed requesting
that he enter his appearance. L’Oréal, S.A. then waited five
months to file its motion to dismiss the appeal. Most
importantly, L’Oréal, S.A. has had a full opportunity to brief
the issues, which it has done. Therefore, because of the
connection between the orders, Trzaska’s inferred intent to
appeal both of them, and the lack of prejudice to L’Oréal,
S.A., we deny L’Oréal, S.A.’s motion to dismiss the appeal.

Outcome: An instruction, coercion, or threat by an employer that
would result in the disregard of obligatory ethical standards of
one’s profession violates a clear mandate of public policy
within the meaning of CEPA. Under it, an employee cannot
be terminated for refusing to engage in conduct in which he
or she is prohibited from engaging. We therefore reverse the
District Court’s dismissal and remand the case for further
proceedings without dismissing Trzaska’s appeal as to
L’Oréal, S.A.

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