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(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

John W. Mac Dougall v. James M. Weichert, et al. (A-116-94)

Argued March 14, 1995 -- Decided June 10, 1996

HANDLER, J., writing for a majority of the Court.

    John MacDougall was a sales associate for Weichert Co., Realtors (Weichert). He began working at Weichert's Chester office on March 5, 1984. At the time, he was also an elected member of the Chester Borough Council (the Council) and its President. Robert Merriam is a real estate developer who used Weichert to sell his properties. Merriam owned a two-story office building in Chester, which had several tenants. As a Council member, MacDougall voted for an ordinance that would ban public parking in front of Merriam's office building. MacDougall was subsequently discharged from his real estate sales position because Merriam, an important Weichert client, threatened to terminate his business relationship with Weichert if it continued to retain MacDougall as a sales associate.

    MacDougall filed a complaint, alleging essentially that: 1) Weichert, through its President and Regional Vice President, violated a clear mandate of public policy by terminating him in retaliation for his vote on the parking ordinance; 2) Merriam tortiously interfered with his relationship with Weichert by causing his termination; and 3) Merriam libeled him. All defendants moved for summary judgment. The trial court granted the motions, dismissing the claims related to both wrongful discharge and tortious interference. By stipulation, the trial court dismissed the libel count with prejudice. The Appellate Division affirmed the trial court's decision.

    The Supreme Court granted MacDougall's petition for certification.

HELD:    N.J.S.A. 2C:27-3 and -5 are the source of the clear mandate of public policy that serves to protect an employee from the threat or infliction of unlawful harm that is intended to influence his or her official action as an elected legislative representative. That harm would be unlawful if it is a violation of criminal law, the commission of a tort, or the violation of a civil or legal duty or an applicable code of ethics, including a violation of the principles that define the conflict-of-interest laws that govern the official actions of persons holding public office. The record in this case fairly poses the issue of whether Weichert's conduct in terminating MacDougall's employment was based on interests or relationships that would constitute an impermissible conflict of interest and may have offended the standards that govern conflicts of interest, thereby violating a clear mandate of public policy.

1. The wrongful discharge doctrine protects at-will employees who are under the total control of the employer and are without separate or independent contractual rights that provide employment protections. Independent contractors are not protected under this doctrine. The categorization of a working relationship does not depend on the label used by the parties, but rather on the type of relationship and the rights and duties of the parties arising from that relationship. In this case, MacDougall and Weichert signed an agreement that purported to make MacDougall and independent contractor and, MacDougall did not receive a salary, pension, sick leave, sick pay, or other attributes of an employee relationship. Nevertheless, there are facts suggesting that Weichert exerted substantial control over MacDougall. Because there exists genuine issues of material fact in regard to whether MacDougall is an independent contractor or a Weichert employee, summary judgment was inappropriate. Therefore, the matter must be remanded to the trial court to determine whether MacDougall was Weichert's employee for purposes of invoking a cause of action based on wrongful discharge. (pp. 6-8)

2. If on remand the trial court determines that the working relationship was one of employment, then it must consider whether MacDougall was wrongfully discharged. The Court explains the standards that should inform and guide the trial court in the event it reaches that issue. An employee has a cause of action for wrongful discharge when the discharge is contrary to a clear mandate of public policy. The public policy must be clearly identified and firmly grounded. In some cases, the employee may show that the retaliation is based on the employee's exercise of certain established rights, violating a clear mandate of public policy. (pp. 9-13)

3. MacDougall argues that the clear mandate of public policy that was violated by his termination is derived from two statutes: N.J.S.A. 2C:27-3 and 27-5. Based on the statutory language and structure of those provisions, as well as the extensive legislative history, the Court determines that to threaten unlawful harm or to harm another by an unlawful act means to threaten or inflict a harm that is unlawful as a crime, tort, or violation of the law, administrative regulation, or other legal duty. Unlawful harm may also include actions that violate recognized and accepted standards of conduct, such as applicable codes of ethics. That statutory understanding expresses a clear mandate of public policy that serves to protect public officials holding legislative office in the exercise of official duties relating to legislative matters. (pp. 13-20)

4. Conduct that is directed against constitutionally-protected activity may violate a clear mandate of public policy, even though it may not violate any other statutory or legal standard. Such activity is not involved in this case. The harm directed against an employee who holds a legislative office does not have to be criminal in order to be regarded as unlawful and in violation of the clear mandate of public policy. The initial dissent argues that the harm entailed in firing an employee for exercising his vote as an elected official violates the clear mandate of public policy against the infliction of harm because such retaliatory action amounts to a "bribe" or "corrupt fix." However, the Court cannot conclude that either the threat of the loss of employment or retaliation through the actual loss of employment was understood by the Legislature as a "bribe," or its equivalent. Thus, absent aggravating circumstances that would elevate a threatened or retaliatory firing to the level of bribery or corruption, such action, not otherwise contrary to any law or legal duty, does not violate a clear mandate of public policy. (pp. 21-23)

5. Because MacDougall was a public official, and because N.J.S.A. 2C:27-3 and -5 and the public policy derived therefrom concern public officials, the determination of whether harmful acts directed against a public official violates the clear mandate of public policy should be informed by the laws that govern the conduct of persons in public office. The conflict-of-interest laws impose duties on public employees and constrain persons dealing with those public employees. These laws lend strength to the clear mandate of public policy that has its basic source in the laws that proscribe harmful conduct directed at public officials, N.J.S.A. 2C:27-3 and -5. That public policy affords protection to at-will employees who hold public office from threats or retaliation based on interests or relationships that would engender disqualifying conflicts under the laws governing conflicts of interest. On remand it must be determined whether Weichert's conduct resulting in MacDougall's discharge equates with the kind of conduct and is based on the kind of interest that would have created a disqualifying conflict of interest. (pp. 23-26)

6. On the issue of tortious interference with prospective economic interests, the critical inquiry is whether Merriam's interference was "without justification or excuse" and was, thus, malicious. A threat to terminate ordinary business relations with an employer, even if intended to cause the discharge of an employee and even though undertaken with malice, is not actionable unless its purpose is not reasonably related to the protection of the actor's legitimate business interests. The record suggests that Merriam believed that his economic interests as a landlord were adversely affected by MacDougall's vote as an elected official for the parking ordinance. Therefore, on remand, the analysis should be directed to whether there was a sufficiently reasonable relationship between Merriam's conduct and his legitimate business interests. (pp. 27-30)

    Judgment of the Appellate Division is REVERSED and the case is REMANDED for further proceedings consistent with this opinion.

     JUSTICE O'HERN, concurring, joins in the opinion and judgment of the Court and writes separately to suggest that the differences between the majority and the dissent may be more rhetorical than real. Justice O'Hern notes his agreement that a test that first inquires whether there has been a violation of the clear mandate of public policy expressed through our conflict-of-interest laws best balances the public interest and the free exercise of political rights by employers and employees.

     CHIEF JUSTICE WILENTZ, dissenting, in which JUSTICE STEIN joins, is of the view that there is a general mandate of public policy in the duty of public officials to vote honestly in accordance with their conscience and with due regard for the interest of their constituents. Moreover, there is no clearer specific mandate than the prohibition against bribes and threats that would corrupt their honesty and their vote. While the Court recognizes the connection in this case between the facts and the conflict-of-interest laws, its reasoning and result disserve both the general mandate and specific mandate of public policy by giving undue weight to the interests of employers. Its opinion creates a complex doctrinal maze that provides insufficient guidance on standards for the courts and litigants. This matter is simple and should be governed by the principle that in New Jersey an employer should not be able to fire an employee because, as a public official, the employee refuses to participate in a corrupt fix.

     JUSTICE POLLOCK, dissenting, agrees with both the Law Division and the Appellate Division that MacDougall was not a Weichert employee. He would affirm solely for that reason and, therefore, has no need to reach the provocative issues that divide the other members of the Court.

     JUSTICE STEIN, dissenting, is of the view that, MacDougall's discharge violates a clear mandate of public policy -- the mandate that public officials can neither be bribed nor unreasonably pressured to influence their official action. The Court should state emphatically and unequivocally that, assuming those facts are proved, MacDougall can recover damages from Weichert and Merriam.

     JUSTICES GARIBALDI and COLEMAN join in JUSTICE HANDLER's opinion. JUSTICE O'HERN filed a separate concurring opinion. CHIEF JUSTICE WILENTZ filed a separate dissenting opinion in which JUSTICE STEIN joins. JUSTICES POLLOCK and STEIN filed separate dissenting opinions.

SUPREME COURT OF NEW JERSEY
A- 116 September Term 1994

JOHN W. MAC DOUGALL,

    Plaintiff-Appellant,

        v.

JAMES M. WEICHERT, individually,
WEICHERT CO., REALTORS, a New
Jersey Corporation, and WALTER J.
SHERMAN, individually,

    Defendants-Respondents,

     and

ROBERT MERRIAM, individually,

    Defendant.

        Argued March 14, 1995 -- Decided June 10, 1996

On certification to the Superior Court, Appellate Division.

Steven K. Greene argued the cause for appellant (Bongiovanni, Collins & Warden, attorneys; John B. Collins, of counsel).

Jerrold J. Wohlgemuth argued the cause for respondents (Apruzzese, McDermott, Mastro & Murphy, attorneys).

    The opinion of the Court was delivered by
HANDLER, J.

    In this case, plaintiff was engaged as a salesperson for a real estate firm. He was also an elected member of the local municipal governing council. As a member of the municipal council, he voted for a parking ordinance that was opposed by a client of the real estate firm. Plaintiff was subsequently discharged from his real estate sales position because the client threatened to terminate his business relationship with the realtor if it continued to retain plaintiff as a sales associate.
    Plaintiff claimed that his termination by his employer, the real estate firm, constituted a wrongful discharge and that the client tortiously interfered with his prospective economic relations by instigating his termination. Those claims were dismissed on the basis of summary judgments.
    Because the record presents unsettled issues of fact, we remand this case for a retrial. Accordingly, we undertake to explain the standards that should govern retrial of the matter.
    The initial issue that must be considered on remand is whether the working relationship between a real estate salesperson and the realtor is one of employment that is covered by the wrongful discharge doctrine. If the relationship is one of employment, the court must then determine whether the termination of that relationship because the salesperson's vote to approve a municipal parking ban was contrary to the interests of the realtor's customer constitutes a wrongful discharge. The court must further determine whether the customer's conduct

constituted a tortious interference with the salesperson's prospective economic relations.

    MacDougall voted in favor of the parking ban, which was passed on a split vote by the Council. Residents, however, complained almost immediately that the ordinance merely created parking problems further down the street. Their complaints prompted the Council to consider extending the parking ban to the entire street and to explore the possibility of providing an alternate parking location for the tenants of Merriam's building. To assist the Council, MacDougall went to Merriam's property to photograph the cars parked there. When Merriam saw MacDougall, he ordered MacDougall off his property. Two days later, Merriam had a sign painted on the side of his building that read: "To Councilman MacDougall, No Trespassing, and that's carved in stone."
    Within a week after the initial vote, Charles Schultz, manager of Weichert's Chester office, said to MacDougall: "I have a party very disturbed about the no parking ordinance." MacDougall did not recall whether Schultz mentioned Merriam by name at that meeting. MacDougall told Schultz that he could not change his vote. Schultz replied: "Well, so be it."
    Shortly thereafter, defendant Walter J. Sherman, Weichert's regional vice president, handed MacDougall a letter formally terminating him. The letter said:
          Robert Mirriam [sic], the owner of a professional building in Chester, has involved us in his ongoing problem with the town in reference to his parking situation.

         As you may know, Bob is a long time builder who has worked with our company for a

number of years in the Somerset, Hunterdon, and Morris Counties.

         Bob has advised us he can no longer do business with us due to your involvement with the council and our company as an Independent Contractor.

         Regretfully, this dispute could have a substantial economic impact upon the company. In order to extract Weichert, Realtors from any involvement in this dispute, we deem it necessary to terminate your relationship with our company as an Independent Contractor effective immediately.

         Please advise us where we can transfer your license.

                    Respectfully,

                    s/Walter J. Sherman
                    Regional Vice President

    MacDougall filed a complaint, alleging essentially that (1) Weichert, James M. Weichert (President of Weichert), and Walter J. Sherman (collectively, "Weichert defendants") violated a clear mandate of public policy by terminating him in retaliation for his vote on the parking ordinance; (2) Merriam tortiously interfered with his relationship with Weichert by causing his termination; and (3) Merriam libeled him. Defendants moved for summary judgment. The trial court granted summary judgments, dismissing the claims relating to both wrongful discharge and tortious interference. By stipulation, the trial court dismissed the libel count with prejudice. The Appellate Division affirmed the trial court's decision. We granted plaintiff's petition for certification. 139 N.J. 183 (1994).

depends not on the nominal label adopted by the parties, but rather on its salient features and the specific context in which the rights and duties that inhere in the relationship are ultimately determined. See Volb v. G.E. Capital Corp., 139 N.J. 110 (1995) (determining status as special employee using relationship's salient features).
    Many facts impelled the lower court to determine that MacDougall's relationship with Weichert was that of an independent contractor and hence did not constitute the kind of employment that is the basis for a tort claim based on wrongful discharge. MacDougall and Weichert signed an agreement that purported to make MacDougall an independent contractor. Weichert promised to provide real estate listings and office facilities and MacDougall was to be paid by commissions. Moreover, neither party was liable for the other's expenses. The contract also stated that there were no sales quotas or mandatory sales meetings. In addition, MacDougall was responsible for his own license, trade dues, and health insurance. Either side could terminate the contract at any time by written notice. The contract provided further:
        The Sales Associate acknowledges that he/she is not an employee nor a partner, but a Sales Associate with an independent contractor status, with no rights of [worker's] compensation, salary, pension, sick leave, sick pay, or other attributes of an employee relationship. The Sales Associate will not be treated as an employee with respect to the services performed by such salesperson as a real estate agent for federal tax purposes.

Finally, after the relationship ended, MacDougall could not use any remaining prospects, listings, or referrals.
    Nevertheless, several facts suggest that Weichert exerted substantial control over MacDougall. MacDougall worked in an office maintained by Weichert, a Weichert manager supervised MacDougall's work, Weichert required MacDougall to take its training program, and Weichert shared the commission profits.
    The critical issue is whether the elements of control and dependence coupled with the absence of any employment protection predominate over factors that favor an independent contractor status. Although in some respects that issue implicates an ultimate factual determination as well as a legal conclusion, there are material issues of subsidiary facts concerning the working relationship between the parties that are unresolved on this record. Consequently, the matter was not amenable to summary judgment. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (1995). We note, in addition, that MacDougall did not present the issue of his employment status on appeal until he filed his reply brief, raising the possibility that the question of employment was not fully presented.
    Therefore, we remand the case to the trial court to determine whether MacDougall was Weichert's employee for purposes of invoking a cause of action based on wrongful discharge.

    Out of respect for the employer's interest, employees can bring wrongful discharge claims only if they can identify an expression that equates with a clear mandate of public policy and if they can show that they were discharged in violation of that public policy. Id. at 72-73. Sources of public policy include the United States and New Jersey Constitutions; federal and state laws and administrative rules, regulations, and decisions; the common law and specific judicial decisions; and in certain cases, professional codes of ethics. Hennessey v. Coastal Eagle Point Oil Co., 129 N.J. 81, 92-93, 94-95 (1992); Pierce, supra, 84 N.J. at 72.
    A basic requirement of the wrongful discharge cause of action is that the mandate of public policy be clearly identified and firmly grounded. See, e.g., Potter v. Village Bank, 225 N.J. Super. 547, 558-60 (App. Div.) (holding that discharge of bank president for reporting suspected illegal money laundering by bank directors violated clear mandate of public policy; "few people would cooperate with law enforcement officials if the price they must pay is retaliatory discharge from employment."), certif. denied, 113 N.J. 352 (1988); Cerracchio v. Alden Leeds, Inc., 223 N.J. Super. 435, 446 (App. Div. 1988) (holding that "under Pierce, an employee in New Jersey may maintain a private action in tort or contract for retaliatory discharge as a result of the filing of an OSHA complaint because such discharge contravenes our public policy"); Kalman v. Grand Union Co., 183 N.J. Super. 153, 157-59 (App. Div. 1982) (holding that discharge

of pharmacist for refusing to violate state administrative regulation requiring pharmacist to be present at all times pharmacy operates for business and for reporting his employer's intended violation pursuant to statutory provision and his professional code of ethics would violate clear mandate of public policy); O'Sullivan v. Mallon, 160 N.J. Super. 416, 418-19 (Law Div. 1978) (holding that complaint alleging that plaintiff x-ray technician was fired for refusing to perform catheterizations, which she could not legally perform, stated a cause of action).
    A vague, controversial, unsettled, and otherwise problematic public policy does not constitute a clear mandate. Its alleged violation will not sustain a wrongful discharge cause of action. See, e.g., Pierce, supra, 84 N.J. at 76 ("As a matter of law, there is no public policy against conducting research on drugs that may be controversial, but potentially beneficial to mankind, particularly where continuation of the research is subject to approval by the FDA."); DeVries v. McNeil Consumer Prods. Co., 250 N.J. Super. 159, 172 (App. Div. 1991) (holding that discharge of employee for having distributed "expired" drugs at employer's direction did not violate clear mandate of public policy because the discharge "implicated only the private interests of the parties"); Schwartz v. Leasametric, Inc., 224 N.J. Super. 21, 30 (App. Div. 1988) (holding that discharge of employee to avoid paying commissions on future transactions did not violate clear mandate of public policy); Giudice v. Drew Chem. Corp., 210 N.J. Super. 32, 36 (App. Div.) ("Private investigation of possible

criminal activities of fellow employees does not implicate the same public policy consideration as if plaintiffs had been fired as a result of cooperating with law enforcement officials investigating possible criminal activities of fellow employees."), certif. denied, 104 N.J. 465 (1986); Alexander v. Kay Finlay Jewelers, Inc., 208 N.J. Super. 503, 508 (App. Div.) (determining that discharge of employee who filed civil suit against employer to collect allegedly unpaid salary did not violate clear mandate of public policy because there is "no statutory or regulatory proscription against [the] firing"), certif. denied, 104 N.J. 466 (1986); Warthen v. Toms River Community Memorial Hosp., 199 N.J. Super. 18, 28 (App. Div.) (ruling that discharge of nurse for refusing to administer kidney dialysis to terminally ill patient did not violate clear mandate of public policy where employee was motivated by "her own personal morals"), certif. denied, 101 N.J. 255 (1985).
    In most cases of wrongful discharge, the employee must show retaliation that directly relates to an employee's resistance to or disclosure of an employer's illicit conduct. See, e.g., Lally v. Copygraphics, 85 N.J. 668, 670-71 (1981); Potter v. Village Bank, supra, 225 N.J. Super. at 558-60; Cerracchio v. Alden Leeds, Inc., supra, 223 N.J. Super. at 446; Kalman v. Grand Union Co., supra, 183 N.J. Super. at 157-59; O'Sullivan v. Mallon, supra, 160 N.J. Super. at 418-19. In some cases, however, the employee may show that the retaliation is based on the employee's exercise of certain established rights, violating a clear mandate

of public policy. Hennessey, supra, 129 N.J. at 91, 102-03, 106-07 (determining that discharge of employee for failing (or refusing to take) a random test for illegal drug use implicates a clear mandate of public policy protecting individual privacy rights, but holding that discharge was lawful where employee served in a safety-sensitive position); Velantzas v. Colgate-Palmolive Co., 109 N.J. 189, 192 (1988) (per curiam) (holding that employee demanding her personnel file stated cause of action under the Law Against Discrimination, N.J.S.A. 10:5, by alleging that "she was discharged for seeking to establish a gender discrimination claim"); Lally v. Copygraphics, supra, 85 N.J. at 670-71.

    MacDougall stresses primarily the first section of N.J.S.A. 2C:27-3, viz:
         a. Offenses defined. A person commits an offense if he directly or indirectly:

         (1) Threatens unlawful harm to any person with purpose to influence a decision, opinion, recommendation, vote, or exercise of discretion of a public servant, party official or voter on any public issue or in any public election[]

                [Ibid. (emphasis added).]

    MacDougall asserts that N.J.S.A. 2C:27-5 is also a source for the clear mandate of public policy. That statute provides:
         A person commits a crime of the fourth degree if he harms another by any unlawful act with purpose to retaliate for or on account of the service of another as a public servant.

            [Ibid. (emphasis added).]

    Whether these statutes and their underlying policy express a clear mandate of public policy applicable to MacDougall's employment requires foremost an understanding of the terms of the statutes, more specifically, the meaning of "unlawful harm." It is significant that the statutes themselves differentiate between public officials holding legislative office and those holding non-legislative offices. That difference relates to the kind of harm that may be directed against a public official. The threat of "harm" that N.J.S.A. 2C:27-3a(1) proscribes is "unlawful harm." If, however, the public servant holds a judicial or administrative office, N.J.S.A. 2C:27-3a(2),(3) proscribes the

threat of any harm, not just the threat of "unlawful harm." Thus, paragraphs (2) and (3) broaden the proscription to the threat of any "harm" but limit its application to only non-legislative officials. Under these provisions, a person commits an offense if he or she:
         (2) Threatens harm to any public servant with purpose to influence a decision, opinion, recommendation, vote or exercise of discretion in a judicial or administrative proceeding; or

         (3) Threatens harm to any public servant or party official with purpose to influence him to violate his official duty.

            [N.J.S.A. 2C:27-3(a)(2), (3) (emphases added).]

    The history of N.J.S.A. 2C:27-3 sheds light on the distinction between harm that is unlawful and harm that is not unlawful, and elucidates the meaning of "unlawful harm." The source of our statute is the Model Penal Code ("MPC"). That history is highly relevant in determining the legislative intent underlying our parallel enactments. State v. Sewell, 127 N.J. 133, 143 (1992) (noting that where the Legislature has seen fit to adopt a portion of the MPC substantially unaltered, borrowed language should be interpreted in accordance with the meaning intended by the drafters of the MPC); State v. Butler, 89 N.J. 220, 227 (1982); see also State v. Haliski, 140 N.J. 1, 31 (1995) (Stein, J., dissenting) (same).

    Subparagraphs 240.2(1)(a) through (c) of the MPC are almost identical to N.J.S.A. 2C:27-3a(1) through (3).See footnote 1 Like our statute, the first subparagraph of the MPC provision prohibits only threats of "unlawful harm," while the next two subparagraphs prohibit the threat of any "harm." The presence of this distinction in the Final Draft of the MPC reflects a careful decision by the members of the American Law Institute to accommodate concerns in the provision's tentative drafts.
    Commentary to one of the tentative drafts focuses on the distinction between permitted and impermissible threats. Section 240.2 is a composite of two provisions contained in MPC Tentative Draft Number 8, Section 208:11 ("Intimidation in Official and Political Matters") and Section 208:14 ("Corrupt Influence in

Official Proceedings"). The official commentary to Section 208:11 advises that "[t]he principal [drafting] difficulty is drawing the line between permissible and prohibited threats." It proceeds to explain that:
        [f]or example, threats of political opposition are legitimate means of influencing political decisions. A political official's threat to discharge a subordinate, if he pursues a particular course of official behavior, may be reprehensible interference or legitimate supervision. It would be intolerable to subject such threats to review by way of criminal prosecution. . . .

         One way of solving the problem would be to restrict the section to threats to do "unlawful" acts. That would include, for example, threat of physical injury to the person, threat of property harm forbidden by the law of torts, and threat to discharge a public servant in violation of an applicable civil service code. Even if the threatened harm would be a civil wrong ordinarily, it would be appropriate to invoke the criminal law against the use of such threats to coerce official or political action.

            [Model Penal Code § 208.11, cmt. at 108 (Tentative Draft No. 8 1958)]

    In addition, the history of N.J.S.A. 2C:27-3 and -5 discusses how to define what threats are impermissible. Those provisions both employ identical language in their characterization of harm as "unlawful" and share a common history. N.J.S.A. 2C:27-5 is modelled after § 240.4 of the MPC, which also uses the language "harms another by any unlawful act." The final MPC provision is identical to its Tentative Draft version, § 208.13. The Commentary to § 208.13 explains that

"[t]here is here a problem of defining the kinds of retaliatory acts [that] should be covered, similar to the problem of defining forbidden threats under Section 208:11. Retaliation is limited to unlawful acts." Model Penal Code § 208.13 cmt. at 110 (Tentative Draft No. 8 1958).
    We note, further, that under the statute the harm threatened against a public servant who occupies a judicial or administrative office need not be "unlawful" to constitute a violation. See supra at __ (slip op. at 15)(quoting N.J.S.A. 2C:27-3(a)(2)). The same distinction is recognized in the parallel provision of the MPC, viz:
        (b) threatens harm to any public servant with purpose to influence his decision, opinion, recommendation, vote, or other exercise of discretion in a judicial or administrative proceeding.

    That distinction is important as a matter of public policy because MacDougall's official action that allegedly triggered his retaliatory discharge -- his vote for the parking ban -- was undertaken in a legislative proceeding, not a judicial or administrative one. The underlying public policy that differentiates between legislative office holders and those occupying judicial or administrative office tolerates a wider range of conduct intended to influence legislators as opposed to conduct directed toward public officials exercising judicial or administrative authority. The commentary to proposed MPC section 208.14 observes that there is a "universal concern to protect judicial proceedings from improper influence." Model Penal Code

§ 208.14, cmt. at 111 (Tentative Draft No. 8 1958). In addition, it argues that in light of the important quasi-judicial roles now undertaken in administrative proceedings, administrative officials should be included in the ambit of the special protections afforded to the judiciary.
     Significantly, in considering what kind of harm would be unlawful when directed against a legislative representative, the Institute expressly contemplated that employers would be free to "attempt[] to influence an employee's decision as a legislator . . . by threat[ening] to terminate the employment." Model Penal Code cmt. § 208.11, page 108 (Tentative Draft No. 8 1958).See footnote 2

    Based on the legislation's extensive history and its statutory language and structure, we determine that to "threaten[] unlawful harm" or to "harm[] another by an unlawful act" means to threaten or inflict a harm that is unlawful as a crime, tort, or violation of a law, administrative regulation, or other legal duty. That statutory understanding expresses a clear mandate of public policy that serves to protect public officials holding legislative office in the exercise of official duties relating to legislative matters. We conclude further that because the clear mandate of public policy derived from these statutes to protect public employees is the basis for a civil action for wrongful discharge, rather than a criminal charge, in analyzing the wrongful discharge claim, that public policy is broader in scope and application than the statutes themselves. Consequently, unlawful harm under that public policy may include actions that violate recognized and accepted standards of conduct, such as applicable codes of ethics.

    The critical question in this case is whether under all of the surrounding circumstances MacDougall's termination by Weichert violated that clear mandate of public policy and was in retaliation for either his vote on the municipal parking ban ordinance or his refusal to change the ordinance.
    At the outset, we recognize that conduct that is directed against constitutionally-protected activity may violate a clear mandate of public policy, even though it may not offend any other statutory or legal standard. Supra at __ (slip op. at 9, 12). Compare Shovelin v. Central New Mexico Elec. Coop., Inc., 850 P.2d 996 (N.M. 1993) (holding that employee's retaliatory discharge based on employee's election to public office did not violate public policy) with Novosel v. Nationwide Ins. Co., 721 F.2d 894, 898-900 (3d Cir. 1983) (holding that termination of an employee for refusing employee's request to engage in political lobbying activities violates clear mandate of public policy under Pennsylvania law). In this case, MacDougall does not claim that his exercise of first amendment rights prompted his discharge nor that his official actions as a councilman were constitutionally protected.
    We recognize that the harm directed against an employee who holds a legislative office need not be criminal in order to be regarded as unlawful and in violation of the clear mandate of public policy. The dissent of the Chief Justice similarly stresses that the harm inflicted on a public official need not be criminal to violate either the underlying statutes or the clear

mandate of public policy that they express. The dissent argues, however, that the harm entailed in firing an employee for exercising his vote as an elected representative violates the clear mandate of public policy against the infliction of harm because such retaliatory action is the "equivalent" of a "bribe" or "corrupt fix." Post at __ (slip op. at 8-10).
    If retaliatory conduct against a public officer approximates bribery or comparable corruption, it would be an egregious harm that violates the clear mandate of public policy that is rooted in N.J.S.A. 2C:27-3 and -5, even if it does not meet the statutory definition of bribery. We are unable to conclude, however, that either the threat of the loss of employment or retaliation through the actual loss of employment was understood by the Legislature as a "bribe," or its equivalent. The Institute considered those specific kinds of harms -- the threat of the loss or the actual loss of employment -- and determined them not to be the kind of unlawful harm that triggers the prohibitions of the statute. Thus, in considering the statutory prohibition, the Institute observed:
         However, restricting Section 208.11 to "unlawful" acts would leave obvious gaps in coverage. The section would then not reach a defendant who attempted to influence a judge, legislator, or administrator by threatening to foreclose a mortgage, or to inform the district attorney of a law violation, or to publicize a scandal in a public official's private life, or to withhold business patronage. Nor would it cover a private employer who attempts to influence an employee's decision as a legislator, juror, or voter, by threat to terminate the employment.

            [Model Penal Code § 208.11, cmt. at 108 (Tentative Draft No. 8 1958) (emphasis added).]

This comment reflects an understanding that employers must have reasonable flexibility in conducting their businesses and should be free to disassociate themselves from controversial political positions that their employees may take. Many local issues create such heated controversy that certain political views could hurt the employer's rapport with its clients and customers. It would be unfair to categorize acting on those business concerns as bribery or corruption. Thus, absent aggravating circumstances that would elevate a threatened or retaliatory firing to the level of bribery or corruption, such action, not otherwise contrary of any law or legal duty, does not violate a clear mandate of public policy.
    The unlawful harm that violates the clear mandate of public policy derived from N.J.S.A. 2C:27-3 and -5 may consist of tortious conduct or conduct that violates a civil or legal duty. Supra at __ (slip op. at 19). Such unlawful harm may also include conduct that violates an applicable code of ethics. Supra at __ (slip op. at 10). We have noted that wrongful discharge frequently involves retaliation based on the employee's opposition to the employer's unlawful or unethical conduct. Supra at __ (slip op. at 12). The Legislature itself has expressly recognized in other contexts that retaliation against an employee need not be predicated on a clear or actual violation of law by the employer. Retaliation against an employee who acts

only on a reasonable belief that the employer has violated a law or regulation or a clear mandate of public policy can constitute a wrongful discharge. See, e.g., The Conscientious Employee Protection Act, N.J.S.A. 34:19-3 (protecting workers who based on reasonable belief disclose or object to violations of "a law, or a rule or regulation promulgated pursuant to law."); Barratt v. Cushman & Wakefield, Inc., __ N.J. __ (1996); Abbamont v. Piscataway Township Bd. of Educ., 138 N.J. 405 (1994).
    The clear mandate of public policy derived from N.J.S.A. 2C:27-3 and -5 affords protections for public employees that go beyond criminal sanctions. As previously noted, the unlawful harm directed against a public official that is proscribed by these statutes can be based on civil wrongs and need not be criminal in nature. Here, because MacDougall was a public official, and because N.J.S.A. 2C:27-3 and -5 and the public policy derived therefrom deal with public officials, the determination of whether harmful acts directed against such public officials violate the clear mandate of public policy should be informed by the laws that govern the conduct of persons in public office.
    The Local Government Ethics Law (N.J.S.A. 40A:9-22.1 to -22.25) requires municipalities to establish municipal ethics boards under codes of ethics that must be at least as restrictive as provisions set forth in N.J.S.A. 40A:9-22.5. N.J.S.A. 40A:9-22.21. Those provisions mandate that "No local government officer or employee shall act in his official capacity in any

matter where he, a member of his immediate family, or a business organization in which he has an interest, has a direct or indirect financial or personal involvement that might reasonably be expected to impair his objectivity or independence of judgment." N.J.S.A. 40A:9-22.5(d). This law demands that an officeholder discharge duties with undivided loyalty.
    We conclude that the conflict-of-interest laws not only impose duties on public employees but they also constitute constraints on persons dealing with public employees. These laws give added substantive meaning and lend strength to the clear mandate of public policy that has its basic source in the laws that proscribe harmful conduct directed at public officials. N.J.S.A. 2C:27-3 and -5. That public policy affords protection to at-will employees who hold public office from threats or retaliation based on interests or relationships that would engender disqualifying conflicts under the laws governing conflicts of interests.
    In this case, the conflict-of-interest laws necessarily direct the focus of the analysis on whether Weichert violated a clear mandate of public policy in discharging MacDougall. These laws are germane to this analysis because they demarcate types of interests that do not conflict with governmental responsibilities and pose no threat to the public interest. See, e.g., Van Itallie v. Borough of Franklin Lakes, 28 N.J. 258, 268 (1958) (determining that public action on zoning ordinance affecting employer of councilman's brother did not involve disqualifying

conflict of interest). However, the analysis of whether a discharge is wrongful because it offends the principles that define prohibited conflicts of interest is extremely difficult in view of the factual and legal complexities that abound in the application of conflict-of-interest laws.See footnote 3 Ultimately, the court must determine whether Weichert's conduct resulting in MacDougall's discharge equates with the kind of conduct and is based on the kind of interests that would have created a disqualifying conflict of interest. See Wyzykowski v. Rizas, 132 N.J. 509, 525 (1993) (noting that a disqualifying conflict can arise when officials have indirect pecuniary interests in the voting matter, such as when someone closely tied to the official, like an employer or family member, is directly affected financially by the vote); Pyatt v. Mayor & Council, 9 N.J. 548, 557 (1952) ("it is most doubtful that participation by a councilman in a municipal action of particular benefit to his employer can be proper in any case.").

    The tort of intentional interference with prospective economic relations proscribes inducing a third person not to "continue" a "prospective relation." Restatement (Second) of Torts, § 766B(a) (1979). This Court has set forth four requirements for maintaining an action for tortious interference. Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739 (1989). First, the complaint "must allege facts that show some protectable right -- a prospective economic or contractual relationship. Although the right need not equate with that found in an enforceable contract, there must be allegations of fact giving rise to some 'reasonable expectation of economic advantage.'" Id. at 751 (citation omitted). Second, "the complaint must allege facts claiming that the interference was done intentionally and with 'malice.' . . . [M]alice is defined to mean that the harm was inflicted intentionally and without justification or excuse." Ibid. (citation omitted). Third, "the complaint must allege facts leading to the conclusion that the interference caused the loss of the prospective gain. A plaintiff must show that 'if there had been no interference[,] there was a reasonable probability that the victim of the interference would have received the anticipated economic benefits.'" Ibid. (citations omitted). Fourth, "the complaint must allege that the injury caused damage." Id. at 752.
    In this case, the critical inquiry is whether Merriam's interference was "without justification or excuse," and thus malicious. Id. at 756. That inquiry must focus on the propriety

of the defendant's actions in the context of the case presented. Id. at 757. Plaintiff bears the burden of proving the absence of justification. Ibid.
    We concluded in Printing Mart that although the Restatement (Second) of Torts, § 766B (1979), uses the term "improper" in place of "malice," "the Restatement test is similar to the 'malice' standard currently applied by New Jersey courts." Printing Mart, supra, 116 N.J. at 752. The Restatement prescribes a balancing test for determining whether an interference is improper. Restatement (Second) of Torts § 767B cmt. a, § 767 (1979). It considers eight factors. Id. at § 767. In our view, the factors most pertinent to the "malice" standard and to this case are: (a) the nature of the actor's conduct, (b) the actor's motive, (d) the interests sought to be advanced by the actor, and (e) the social interest in protecting the freedom of action of the actor and the contractual interests of the other.
    The actor's interest is significant because it is usually economic and "[a]n interest of this type is important and will normally prevail over a similar interest of the other if the actor does not use wrongful means." Id. at cmt. f. Therefore, a threat to terminate ordinary business relations with an employer, even if intended to cause the discharge of an employee and even though undertaken with malice, is not actionable unless it is "for a reason not reasonably related to the protection of a

legitimate business interest of the actor." Smith v. Ford Motor Co., 221 S.E.2d 282, 296 (N.C. 1976).
    The record suggests that Merriam believed that his economic interests as a landlord were adversely affected by plaintiff's vote as an elected official for the parking ordinance. Moreover, the record indicates that at least two issues remained unresolved at the time of MacDougall's discharge: whether an expanded parking ban would cover the remainder of the street and whether the municipality would provide alternate parking for the businesses in Merriam's office building. (MacDougall himself stated that after the initial vote, "we were still trying to resolve some of this.") On remand, the analysis should be directed to whether there was a sufficiently reasonable relationship between Merriam's conduct and his legitimate business interests.

    JUSTICES GARIBALDI and COLEMAN join in JUSTICE HANDLER's opinion. JUSTICE O'HERN filed a separate concurring opinion. CHIEF JUSTICE WILENTZ filed a separate dissenting opinion in which JUSTICE STEIN joins. JUSTICES POLLOCK and STEIN filed separate dissenting opinions.
SUPREME COURT OF NEW JERSEY
A- 116 September Term 1994

JOHN W. MAC DOUGALL,

    Plaintiff-Appellant,

        v.

JAMES M. WEICHERT, individually,
WEICHERT CO., REALTORS, a New
Jersey Corporation and WALTER J.
SHERMAN, individually,

    Defendants-Respondents,

     and

ROBERT MERRIAM, individually,

    Defendant.

O'HERN, J., concurring.

    I join in the opinion and judgment of the Court announced by Justice Handler. I write separately to suggest that the differences between the majority and dissent may be more rhetorical than real. My own views are perhaps oversimplified but help me to put the case in focus.
    This case is not just about political bribery, although that is a legitimate concern. It is also about the rights of employers to be disassociated from the political views of their employees. I have no sense of the flavor of the controversy over this parking ordinance in the Borough of Chester. However, we are all familiar with similar heated controversies in our towns.

Some citizens may consider the refusal to build an addition to a high school the most destructive decision imaginable. Others may consider the construction of the high school a serious economic loss to them. Some citizens may consider that a vote on a high-rise building may destroy the character of the community and may affect their economic well being while others may not.
    Those issues can become terribly controversial. The citizens in the community may divide into separate camps. One of the legal questions that we must consider is whether an elected official may hold the boss bound to the official's political views.
    The dissent faults the majority for creating "an ill-defined remedy" tied to a specific conflict of interest. Post at ___ (slip op. at 42). But the dissent's remedy is also limited to "the hidden fix attempted by someone specially economically impacted by a vote and undertaken through a bribe or a threat or a retaliatory discharge." Post at ___ (slip op. at 38). We can all agree that an employee of an employer "specially economically impacted by a vote" is thereby disqualified to vote. See Griggs v. Borough of Princeton, 33 N.J. 207, 220-21 (1960). Hence, the two remedies are conceptually alike.
    A broader holding would undermine, not reinforce, democratic ideals. Ours is the oldest continuous form of democracy. It has survived thus far in New Jersey without a tort action for the wrongful discharge of a public officer for reasons related to the

exercise of official duties. We must carefully mold any remedy that we fashion on this subject.
    I believe that everyone's politics are personal. When a public official solemnly swears, as the dissent emphasizes, "faithfully, impartially and justly [to] perform all the duties of . . . [a] councilman," post at ___ (slip op. at 42), that public official has no right to expect that his or her employer must at every moment remain associated with the political views expressed in the performance of those duties when those views are calamitous to the employer's business. In a responsible democracy it is the public official who must choose between public office and his or her own private interest. I do not believe that we can require every citizen-employer to be bound to the politics of an employee.
    In the long run, I believe that any more sweeping restraint on the right of employers to disassociate themselves from the politics of their employees would damage the effort to encourage citizens to participate in a democracy. Employers will necessarily hesitate to employ elected officials for fear that fair-minded employment decisions may become the subject of a lawsuit. I thus agree with the majority that a test that first inquires whether there has been a violation of the clear mandate of public policy expressed through our conflict-of-interest laws best balances the public interest in the free exercise of political rights by employers and employees.                         SUPREME COURT OF NEW JERSEY
                        A- 116 September Term 1994

JOHN W. MAC DOUGALL,

    Plaintiff-Appellant,

        v.

JAMES M. WEICHERT, individually,
WEICHERT CO., REALTORS, a New
Jersey Corporation and WALTER J.
SHERMAN, individually,

    Defendants-Respondents,

     and

ROBERT MERRIAM, individually,

    Defendant.

WILENTZ, C.J., dissenting.

    There is no clearer general mandate of public policy than the duty of public officials to vote honestly in accordance with their conscience and with due regard for the interests of those they represent. And there is no clearer specific mandate of public policy than the prohibition against bribes and threats that would corrupt their honesty and their vote. In a democracy governed by the vote of elected officials, it is understood and accepted that those officials must vote for what they believe is in the best interest of society, and not for their own or another's economic interest. The Court today perceptively recognizes the connection between the facts of this case and the conflict-of-interest