Up-to-date information for employers on topics and issues that may affect workplace operations. The posts are current as of the date of the posting.


by D. Gregory Valenza | The Daily Journal | Apr 7, 2010

There are a number of ways employers can raise a former employee’s ire. These include contesting an unemployment claim or reporting the former employee to a licensing agency. Sometimes ex-employees retaliate with litigation they would not have filed were it not for the employer’s action. The ex-worker’s claim may involve significant potential liability and defense costs, possibly motivating the employer to settle or dismiss the initial action.

Filing a lawsuit in retaliation for the employer’s lawsuit, report to the government, or other protected conduct is known as a “SLAPP” (strategic lawsuit against public participation). The remedy for a SLAPP is a special motion to strike, called an “anti-SLAPP” motion. It is codified in Code of Civil Procedure Section 425.16.

The court may grant an anti-SLAPP motion to strike when the plaintiff asserts “a cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the [U.S.] Constitution or the California Constitution in connection with a public issue.” The court first determines whether the plaintiff’s lawsuit is covered under the above standard. If so, the court proceeds to the second step: determining whether the plaintiff’s lawsuit has “minimal merit.” If the lawsuit lacks probable merit, the court must grant the defendant’s motion to strike.

The anti-SLAPP law is intended to stop SLAPP lawsuits early to minimize harm to the protected defendant. Motions to strike normally must be filed within 60 days of the filing of the complaint. The court must decide the motion within 30 days unless the docket does not allow it. The filing of a motion stays discovery, although the court may allow it upon noticed motion.

The statute further deters SLAPP lawsuits by requiring an award of attorney’s fees to a prevailing defendant. However, a frivolous anti-SLAPP motion can result in a fee award in favor of the plaintiff.

Protected conduct “in furtherance of the person’s right of petition or free speech…in connection with a public issue” is a broad standard. It includes nearly any submission to a government body, including litigation, testifying before the Legislature or an administrative agency, etc. The statute also includes written or verbal statements merely made “in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law.” The courts have interpreted this provision to include, for example, an attorney’s demand letter and other communications made outside of litigation or other proceedings. See Neville v. Chudacoff, 160 Cal. App. 4th 1255 (2008) (collecting cases).

There are a number of anti-SLAPP decisions arising from employment law disputes. Dible v. Haight Ashbury Free Clinics, Inc., 170 Cal. App. 4th 843, 855 (2009), presents a straightforward application of the statute. The clinic contested Leah Dible’s claim for unemployment benefits. Dible sued the clinic for defamation, claiming the report to the Employment Development Department was false and defamatory. The court upheld the clinic’s anti-SLAPP motion. First, the report to EDD was part of a governmental proceeding – the administrative claim for unemployment benefits. As such, it was protected conduct under the anti-SLAPP statute. Second, the court found Dible had no chance of succeeding on her defamation claim because there was no “publication” of the alleged false statement to third parties. Thus, the motion to strike terminated Dible’s lawsuit.

Similarly, Wells Fargo’s report to the National Association of Securities Dealers regarding the discharge of Marco Fontani, a former employee, was protected conduct. Therefore, the court struck as SLAPP claims Fontani’s retaliatory lawsuit alleging defamation and interference with business advantage, arising from Wells Fargo’s report. Fontani v. Wells Fargo Investments, LLC, 129 Cal. App. 4th 719 (2005).

An employee’s claim based on the employer’s out-of-court investigation of her lawsuit also is entitled to protection. Thus, when Bessie Gallanis-Politis sued Los Angeles County, two county employees investigated part of her claim. Gallanis-Politis then amended her complaint to add retaliation claims against the two employees for conducting their investigation. Because the county employees initiated the investigation in response to the lawsuit and to prepare the county’s defense, it was protected, out-of-court conduct in connection with a judicial proceeding. The investigators’ anti-SLAPP motion prevailed. Gallanis-Politis v. Medina, 152 Cal. App. 4th 600, 604 (2007).

Employers’ direct and indirect participation in litigation and administrative proceedings present relatively clear examples of protected conduct. But the anti-SLAPP law also applies to public statements concerning “an issue of public interest,” without any need for government involvement. There has been much litigation over what speech qualifies under that prong of the law. One court distilled the standard as follows: “the subject statements either concerned a person or entity in the public eye, conduct that could directly affect a large number of people beyond the direct participants, or a topic of widespread, public interest.” Hailstone v. Martinez, 169 Cal. App. 4th 728, 737 (2008).

An anti-SLAPP motion is proper when protected communications on matters of public interest directly underlie a plaintiff’s claim. For example, a company’s commercial background check, which included a report that an applicant was listed on the Megan’s Law sex offender Web site, was protected speech on a matter of public interest. The company was entitled to anti-SLAPP protection against a job applicant’s lawsuit, notwithstanding the applicant’s argument that the speech was a commercial service, not a public discussion about Megan’s Law. Mendoza v. ADP Screening and Selection Services, Inc., 2010 DJDAR 4371 (Mar. 23, 2010).

But when a lawsuit’s claim does not focus on speech that actually is a matter of public interest, the underlying “policies” behind speech do not transform the plaintiff’s claim into a SLAPP. For example, World Financial Group sued ex-employees and HBW Insurance for stealing trade secrets and solicitation of World Financial’s customers. HBW and the ex-employees responded with an anti-SLAPP motion. They argued their solicitation and new employment relationship were matters of public interest because of California’s law favoring competition.

The Court of Appeal held World Financial’s claims against the former employees concerned communications “directed at a competitor’s associates and customers for the sole purpose of promoting the competing business as a superior employer and provider of products and services.” The communications themselves were not protected as matters of public concern, even if the competitors were fostering competition. World Financial Group, Inc. v. HBW Ins. & Financial Services, Inc., 172 Cal. App. 4th 1561, 1569 (2009).

Even where speech concerns the public interest, the plaintiff’s lawsuit will proceed if he or she can establish a sufficient probability of success. In the Hailstone case, cited above, John Hailstone was a union official. Sam Martinez, the union’s secretary-treasurer, accused the plaintiff of double-dipping expense reimbursements. He sent a letter along those lines to union officials and the U.S. Dept. of Labor. Hailstone responded with a defamation lawsuit. Although the court determined that Martinez’s communications addressed a sufficient public interest, the court also held Hailstone had a sufficient chance of success on his defamation claim to defeat the anti-SLAPP motion.

Finally, the Legislature has imposed some curbs on the anti-SLAPP motion. For example, anti-SLAPP motions are typically not available against lawsuits brought by the attorney general, or by private litigants “solely in the public interest” or on behalf of the general public, generally not for the plaintiff’s own pecuniary gain. Code of Civil Procedure Sections 425.16(d), 425.17. Certain commercial communications also are exempted. However, these exceptions typically will not apply in the employment context.

It has been said, “Revenge is a dish best served cold.” But when revenge comes in the form of a SLAPP lawsuit, the payback is best served in accordance with the Code of Civil Procedure.