I just taught an introductory orientation class to the new 1Ls here at New England Law, where we contrasted a few cases that present dilemmas concerning confidentiality, including Balla v. Gambro, Inc., 584 N.E.2d 104, 107 (Ill. 1991). For those who do not know this case, it’s quite revealing of judicial assumptions about human behavior.
In Balla, an attorney who was fired for threatening to blow the whistle on his client’s wrongdoing (a company that planned to sell defective dialyzer machines that risked serious harm to customers) sued for retaliatory discharge. In an opinion that garnered significant attention and criticism, the Illinois Supreme Court ruled that no such cause of action was available, in part, because the lawyer was already required by the Illinois Rules of Professional Conduct to make this type disclosure; as a result, there was no need to provide an additional incentive — that is, the protection that a discharge claim would provide — to ensure compliance with the ethical rules.
As Andy Perlman points out in his excellent article on unethical obedience and social psychology:
“The problem is that the [Balla] court’s opinion rested on a flawed assumption about human behavior. Social psychology suggests that lawyers in Balla’s situation would find it difficult to disclose information of the sort described in the opinion, especially without whistleblower protection. First, lawyers like Balla are unlikely to put much stock in the ethical obligation that the court referenced. The rule is ambiguous, and the various forces described earlier* can lead a lawyer to interpret the rule as not requiring disclosure. Moreover, there are very few instances where lawyers have been disciplined for failing to disclose information under similar circumstances. Thus, any fear of discipline would be overshadowed by what the lawyer had to lose (i.e., a job) by reporting the misconduct and by other situational forces, such as Balla’s distance from the prospective victims, his proximity to his bosses, the hierarchical structure of a corporation, and the presumptive absence of dissent.” Andrew M. Perlman, Unethical Obedience by Subordinate Attorneys: Lessons from Social Psychology, 36 Hofstra L. Rev. 451, 477 (2007) (*referring to Andy’s extensive discussion of the powers of conformity and obedience, as demonstrated by the famous Asch and Milgram experiments, among others).
The dissent in Balla, it seems to me, was right:
“[T]o say that the categorical nature of ethical obligations is sufficient to ensure that the ethical obligations will be satisfied simply ignores reality. Specifically, it ignores that, as unfortunate for society as it may be, attorneys are no less human than nonattorneys and, thus, no less given to the temptation to either ignore or rationalize away their ethical obligations when complying therewith may render them unable to feed and support their families.” (Balla at 113 (Freeman, J., dissenting)).
Balla provides insight into how judges — here in the majority — can make fundamental errors about human psychology. If there is any solace, it is that many other jurisdictions have rejected Balla‘s reasoning — in part, because of this flawed perspective (see, e..g., Gen. Dynamics Corp. v. Superior Court, 7 Cal. 4th 1164, 1186, 876 P.2d 487, 501 (1994) (“By providing the employee with a remedy in tort damages for resisting socially damaging organizational conduct, the courts mitigate the otherwise considerable economic and cultural pressures on the individual employee to silently conform.”).
Alas, Balla remains good law in Illinois. But for anyone looking for an opportunity to teach the frailty of judicial reasoning when it comes to human psychology and decision-making, this case is a gem.
[photo credit: Green Whistle: Steven Depolo on Flickr.com Creative Commons]
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I certainly agree with Professors Eldred and Perlman. This critique neatly illustrates the value of bringing the teachings of behavioral science, and in particular individual, social, and organizational psychology, to both the
study and the practical application of legal ethics and rules of professional conduct, In some circumstances the applicable rules of professional conduct do not require the lawyer to disclose but instead permit the lawyer to do so, i.e., make disclosure optional in the discretion of the lawyer. Hopefully a court would rule that, in such circumstances, whistleblower protection for an employee-attorney is necessary in order to avoid penalizing disclosures that the rules of professional conduct intended such lawyers to have the discretion to make. Of course, whistleblower protections would not affect a client’s right to discharge a lawyer who is not an employee, for any cause or without cause. See Model Rule 1.16(a)(3) and Comment  to Rule 1.16. Complicated issues may arise if the lawyer is on secondment to a client of the lawyer’s firm, or is both a partner in the firm and, at the same time, an officer of the firm’s client.