SECOND DIVISION
May 18, 2004
(Nunc pro tunc April 13, 2004)

Plaintiff Susan Ausman, an attorney, appeals from an order ofthe circuit court dismissing her retaliatory discharge actionagainst defendant Arthur Andersen, LLP for failure to state aclaim. On appeal, plaintiff contends that our supreme court'sdecision in Balla v. Gambro, Inc., 145 Ill. 2d 492, 584 N.E.2d 104(1991), did not bar her cause of action. Alternatively, plaintiffargues that Balla should be overruled. For the reason set forthbelow, we affirm.

STATEMENT OF FACTS

On January 8, 2001, plaintiff was employed as an attorney indefendant's "Legal Group." After she was summarily discharged onJanuary 31, 2002, plaintiff filed a complaint in the trial court onMarch 20 based upon grounds of retaliatory discharge and breach ofcontract.

With respect to plaintiff's retaliatory discharge claim,plaintiff alleged that "Andersen developed independence and ethicalstandards, policies and processes (collectively, 'independencereview') to, among other things, ensure that its partners andemployees complied with the letter and spirit of SEC regulations";this independence review was published in Anderson's "IESHandbook"; plaintiff worked on expansions and alliances under theglobal head of Andersen's Legal Group's expansion and allianceteam; plaintiff was responsible for complying with the independencereview and for ensuring that proposed business transactions weresubjected to the independence review; plaintiff objected toproposed business transactions that had the potential to violateAndersen's independence review and urged her supervisors to subjectthese business transactions to such review; plaintiff'ssupervisors, along with other Andersen employees, objected toplaintiff's recommendations and sought quick approval of suchtransactions without fully subjecting them to an independencereview, the supervisors gave their approval, "on information andbelief, without disclosing such violation to senior management";the supervisors' annual appraisals contained various complaintsabout plaintiff's recommendations; and a supervisor's conclusionthat plaintiff should leave Andersen "was a direct result of [her]insistence that proposed business transactions be subject toindependence review." Plaintiff concluded that she was terminated"in retaliation for her efforts to ensure compliance with SECregulations through enforcement of Andersen's independence review,[and that her termination was] with malicious indifference tofederal public policy."⁽¹⁾

On May 3, defendant filed a motion to dismiss both counts ofplaintiff's complaint pursuant to section 2-615 of the IllinoisCode of Civil Procedure (Code). 735 ILCS 5/2-615 (West 2002). OnAugust 20, the trial court dismissed plaintiff's breach of contractclaim without prejudice and dismissed plaintiff's retaliatorydischarge claim with prejudice. On September 17, plaintiff fileda motion requesting a Supreme Court Rule 304(a) (155 Ill. 2d R.304(a)) finding that the dismissal of the retaliatory dischargecount was a final and appealable order and that there was no justreason for delaying the appeal. The trial court grantedplaintiff's motion on December 9. This appeal followed.

ANALYSIS

Plaintiff first argues that our supreme court's decision inBalla did not, contrary to the trial court's interpretation,unequivocally disallow all in-house counsels' claims forretaliatory discharge and that she adequately pleaded therequirements of her claim. Plaintiff further argues that sheshould have been allowed to bring her action because the publicinterest of having public accounting firms adhere to the SEC'sRules on "Auditor Independence" was not adequately safeguarded bythe Illinois Rules of Professional Conduct (Rules of ProfessionalConduct). Plaintiff also contends that the Rules of ProfessionalConduct did not adequately safeguard this public interest becausethey did not allow her to disclose the potential violations in theinstant case. Alternatively, plaintiff cites other state supremecourts' decisions that have criticized the Balla court's rationaleand argues that Balla should be overturned.

Defendant contends that Balla unequivocally prohibits anyIllinois in-house attorney from bringing a retaliatory dischargeaction against his or her employer. Defendant argues thatplaintiff is merely trying to find a "loophole" in Balla byasserting that the public interest is unprotected by the Rules ofProfessional Conduct. Defendant contends that plaintiff's"loophole" cannot be reconciled with this court's holding inHerbster v. North American Co. for Life and Health Insurance, 150Ill. App. 3d 21, 501 N.E.2d 343 (1986), because the court's holdingin Herbster "was a categorical prohibition of the retaliatorydischarge cause of action for any Illinois attorney, based solelyon the harm this tort would do to attorney/client relations and thepublic interest." In the alternative, defendant argues thatplaintiff failed to show that she met the requirements of aretaliatory discharge cause of action because the claim requiresthat the discharge violate "a clear mandate of public policy." Defendant maintains that plaintiff has alleged mere disagreementover internal "company rules," which do not rise to the level of aclearly mandated public policy. Lastly, defendant argues thatplaintiff cannot ask this court to overrule Balla because it is thelaw of this state.

A section 2-615 motion to dismiss attacks the legalsufficiency of a plaintiff's complaint. Weatherman v. Gary-WheatonBank of Fox Valley, 186 Ill. 2d 472, 491, 713 N.E.2d 543 (1999). When reviewing the sufficiency of a complaint, the court mustaccept as true all well-pleaded facts and all reasonable inferencesthat can be drawn from those facts. Bryson v. News AmericaPublications, Inc., 174 Ill. 2d 77, 86, 672 N.E.2d 1207 (1996). Itis the court's duty to determine, considering the allegations ofthe complaint in the light most favorable to the plaintiff, whetherthe allegations are sufficient to state a cause of action uponwhich relief may be granted. Board of Directors of Bloomfield ClubRecreation Ass'n v. Hoffman Group, Inc., 186 Ill. 2d 419, 424, 712N.E.2d 330 (1999). The complaint should not be dismissed unless itis clear that the plaintiffs could prove no set of facts that wouldentitle them to relief. Bryson, 174 Ill. 2d at 86-87. We reviewthe trial court's decision on a motion to dismiss de novo. Neadev. Portes, 193 Ill. 2d 433, 439, 739 N.E.2d 496 (2000).

As a general rule, "an employer may fire an employee-at-willfor any reason or no reason at all." Jacobson v. Knepper & Moga,P.C., 185 Ill. 2d 372, 375-76, 706 N.E.2d 491, 492 (1998). However, our supreme court has recognized a limited and narrowexception, known as retaliatory discharge, to the general rule ofat-will employment. Jacobson, 185 Ill. 2d at 376. "To establisha cause of action for retaliatory discharge, a plaintiff mustdemonstrate that (1) he was discharged in retaliation for hisactivities; and (2) the discharge is in contravention of a clearlymandated public policy." Jacobson, 185 Ill. 2d at 376; see alsoZimmerman v. Buchheit of Sparta, Inc., 164 Ill. 2d 29, 35, 645N.E.2d 877 (1994); Balla, 145 Ill. 2d at 499; Palmateer v.International Harvester Co., 85 Ill. 2d 124, 134, 421 N.E.2d 876(1981).

Because plaintiff in the instant case is an attorney licensedto practice law in Illinois, a review of our supreme court'sdecision in Balla is necessary. In Balla, the plaintiff, anattorney licenced to practice law in the State of Illinois, washired as in-house counsel by the defendant Gambro, Inc., adistributor of kidney dialysis equipment, to, among other things,be responsible for the legal matters within the company. Balla,145 Ill. 2d at 495. The attorney subsequently assumed duties thathad previously been conducted by the manager of regulatory affairs,and, as such, the attorney became responsible for " 'ensuringawareness of and compliance with federal, state and local laws andregulations affecting the company's operations and products.' " Balla, 145 Ill. 2d at 496.

In July 1985, Gambro's affiliate notified the company that itwould be receiving certain defective dialyzers. Balla, 145 Ill. 2dat 496. The attorney told Gambro's president to reject theshipment because the dialyzers did not comply with FDA regulations. Balla, 145 Ill. 2d at 496. The attorney later learned that thepresident was intending to accept the shipment for distributiondespite the attorney's advice, and the attorney confronted thepresident, warning that "he would do whatever [was] necessary tostop the sale of the dialyzers." Balla, 145 Ill. 2d at 496. Theattorney was fired shortly thereafter. Balla, 145 Ill. 2d at 497. The day following his termination, the attorney reported theshipment to the FDA, which seized the shipment and determined theproduct to be "adulterated" within the meaning of the federal actat issue in that case. Balla, 145 Ill. 2d at 497.

The attorney brought a retaliatory discharge action againsthis former employer, Gambro, and the trial court dismissed theaction on Gambro's motion for summary judgment. Balla, 145 Ill. 2dat 494. On appeal, the appellate court reversed the trial court,stating that an attorney is not barred as a matter of law frombringing a retaliatory discharge action (Balla, 145 Ill. 2d at 498,citing Balla v. Gambro, Inc., 203 Ill. App. 3d 57, 62, 560 N.E.2d1043 (1990)), and finding that questions of fact existed regardingthe following three-part test in determining whether the attorneyhad standing to bring his retaliatory discharge action:

" ' (1) whether [the attorney's] dischargeresulted from information he learned as a"layman" in a nonlegal [sic] position; (2)whether [the attorney] learned the informationas a result of the attorney/clientrelationship, if so, whether the informationwas privileged, and if it was privileged,whether the privilege was waived; and (3)whether there were any countervailing publicpolicies favoring disclosure of privilegedinformation learned from the attorney/clientrelationship.' " Balla, 145 Ill. 2d at 498,quoting Balla, 203 Ill. App. 3d at 63.

Accordingly, the appellate court remanded the case for adetermination of the above questions of fact.

On appeal to the supreme court, the Balla court agreed withthe trial court that the attorney did not have a cause of actionagainst Gambro for retaliatory discharge under the facts of thecase (Balla, 145 Ill. 2d at 498) based on the following rationale:

"In this case it appears that Gambrodischarged [the attorney] in retaliation forhis activities, and this discharge was incontravention of a clearly mandated publicpolicy. *** As we have stated before, '[t]hereis no public policy more important or morefundamental than the one favoring theeffective protection of the lives and propertyof citizens.' [Citations.] However, in thiscase, [the attorney] was not just an employeeof Gambro, but also general counsel forGambro.

*** [I]n Herbster v. North American Co.for Life and Health Insurance, *** ourappellate court held that the plaintiff, anemployee and chief legal counsel for thedefendant company, did not have a claim forretaliatory discharge against the company dueto the presence of the attorney-clientrelationship. ***

***

We agree with the conclusion reached inHerbster that, generally, in-house counsel donot have a claim under the tort of retaliatorydischarge. *** [W]e base our decision as muchon the nature and purpose of the tort ofretaliatory discharge, as on the effect on theattorney-client relationship that extendingthe tort would have. In addition, at thistime, we caution that our holding is confinedby the fact that [the attorney] is and was atall times throughout this controversy anattorney licensed to practice law in the Stateof Illinois. [The attorney] is and was subjectto the Illinois [Rules of ProfessionalConduct]. ***

In this case, the public policy to beprotected *** is adequately safeguardedwithout extending the tort of retaliatorydischarge to in-house counsel. [The attorney]was required under [Rule 1.6(b)] to reportGambro's intention to sell the *** dialyzers.******

*** [W]e believe that extending the tortof retaliatory discharge to in-house counselwould have an undesirable effect on theattorney-client relationship that exists between these employers and their in-housecounsel. *** [I]f in-house counsel are grantedthe right to sue their employers forretaliatory discharge, employers might be lesswilling to be forthright and candid with theirin-house counsel. ***

*** [I]f in-house counsel are granted aright to sue their employers in tort forretaliatory discharge, employers might ***limit their communication with their in-housecounsel. ***

If extending the tort of retaliatorydischarge might have a chilling effect on thecommunications between the employer/client andthe in-house counsel, we believe that it ismore wise to refrain from doing so.

Our decision not to extend the tort ofretaliatory discharge to in-house counsel alsois based on other ethical considerations. Under the Rules of Professional Conduct, [theattorney] was required to withdraw fromrepresenting Gambro if continuedrepresentation would result in the violationof the Rules of Professional Conduct. ***[W]e refuse to allow in-house counsel to suetheir employer/client for damages because theyobeyed their ethical obligations. ***

*** [I]f we were to grant the in-housecounsel the right to sue the client forretaliatory discharge, we would be shiftingthe burden and costs of obeying the Rules ofProfessional Conduct from the attorney to theemployer/client. *** This, we believe, isimpermissible ***." Balla, 145 Ill. 2d at498-505. In the case at bar, we first note that it is doubtful thatplaintiff, regardless of her status as an attorney, hassufficiently shown that her discharge was in contravention of aclearly mandated public policy. Although plaintiff states in herbrief that the public policy at issue here is "the public interestof having [d]efendant and other similar public accounting firmsadhere to the SEC's Rules on Auditor Independence," a review ofplaintiff's complaint reveals only instances where plaintiff wasmerely in disagreement over her employer's adherence to its ownindependence review. It is doubtful that this disagreement wouldrise to the level of a clearly mandated public policy. SeePalmateer, 85 Ill. 2d at 130 (stating that, "[a]lthough there is noprecise line of demarcation dividing matters that are the subjectof public policies from matters purely personal, *** a matter muststrike at the heart of a citizen's social rights, duties, andresponsibilities before the tort will be allowed," and noting thatpublic policy is to be "found in the State's constitution andstatutes and, when they are silent, in its judicial decisions"). However, we need not consider the issue because we hold that,regardless of whether plaintiff sufficiently pleaded a claim forretaliatory discharge, our supreme court's decision in Ballaprohibits plaintiff from bringing her cause of action.

As set forth above, the Balla court clearly decided "not toextend the tort of retaliatory discharge to in-house counsel." Balla, 145 Ill. 2d at 504. The Balla court confined its holding bythe fact that the attorney in that case "was at all timesthroughout [the] controversy an attorney licensed to practice lawin the State of Illinois." Balla, 145 Ill. 2d at 501. In theinstant case, plaintiff is such an attorney. We believe that if wegranted plaintiff the right to sue her former employer, ourdecision would have "a chilling effect on the communicationsbetween the employer/client and the in-house counsel." Balla, 145Ill. 2d at 504. Balla clearly prohibits such an effect.

Plaintiff's alternative argument that Balla should beoverruled also fails. It is well-settled that this court mustfollow the law as declared by our supreme court. See IllinoisLabor Relations Board v. Chicago Transit Authority, 341 Ill. App.3d 751, 758, 793 N.E.2d 730, 735 (2003) ("After the supreme courthas declared the law with respect to an issue, [the appellate]court must follow that law because only the supreme court hasauthority to overrule or modify its decisions"); Chicago JourneymenPlumbers' Local Union 130, U.A. v. The Department of Public Health,327 Ill. App. 3d 192, 201, 761 N.E.2d 1227, 1235 (2001) (notingthat "the appellate court has no authority to overrule or modify asupreme court opinion").

CONCLUSION

For the reasons stated, the order of the circuit courtdismissing plaintiff's complaint is affirmed.

Affirmed.

WOLFSON, P.J., and GARCIA, J., concur.

1. The nature of plaintiff's breach of contract claim is notrecited here because plaintiff is not appealing the dismissal ofthat claim.