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In determining choice-of-law, New Jersey no longer follows the rule that the place where the wrong occurred controls. New Jersey now uses the more flexible governmental-interest analysis in choice-of-law decisions. Under that analysis, the determinative law is that of the state with the greatest interest in governing the particular issue. Once a conflict is determined the next step is to identify the governmental policies underlying the law of each state and how those policies are affected by each state's contacts to the litigation and to the parties. If a state's contacts are not related to the policies underlying its law, then that state does not possess an interest in having its law apply. Consequently, the qualitative, not the quantitative, nature of a state's contacts ultimately determines whether its law should apply.
Plaintiff employee Richard J. D'Agostino was employed in Switzerland by a subsidiary of defendant corporation, Cilag, as General Manager of its Swiss Marketing Division. Defendant corporation Johnson & Johnson Inc., was headquartered in New Jersey. In accepting employment, plaintiff expressed the hope that he was entering into a long-term career with defendant with the eventual prospect of a United States-based position. Also, the agreement provided that either party could terminate the employment relationship on six-month notice and that Swiss law would govern any disputes under the contract. Plaintiff filed suit in New Jersey alleging that the defendants, corporation and corporate officials namely Robert N. Wilson and Ronald G. Gelbman caused him to be wrongly discharged after he refused to participate in what he perceived to be the illegal bribing of Swiss licensing authorities. Plaintiff contended that the payments that he was requested to authorize violated the Foreign Corrupt Practices Act. The complaint also asserted that defendants made defamatory statements concerning his dismissal and that they entered into a conspiracy to prevent him from obtaining employment in the pharmaceutical industry. The complaint asserted wrongful termination, intentional causation of injury to another, conspiracy, and libel and slander. The trial court applied Swiss law and denied defendants’ motion for summary judgment in plaintiff’s wrongful discharge action. However, the appellate division reversed the trial court’s order holding that the law of Switzerland governed the dispute. Plaintiff appealed.
Should the New Jersey law be applied?
The court reversed the judgment of the appellate court and held that New Jersey law, and not Swiss law, applied to plaintiff's claims against defendants. The court, in determining the choice of law issue, applied a governmental interest analysis. Thus, the court found that because the interests of New Jersey in preventing violation of governmental policies that could have an indirect effect on the domestic market for pharmaceutical products and the health and welfare of its citizens were greater than the interest of Switzerland in maintaining Swiss at-will employment relationships.