Employers and employees alike should be aware of the not-so-new litigation device known as the anti-SLAPP motion to strike. This motion, typically filed in the early stages of a case, is designed to strike a Complaint before it gets off the ground.
SLAPP refers to “Strategic Litigation Against Public Participation.” An anti-SLAPP motion is one asking the court to strike down a Complaint (or Cross-complaint) whose effect, if left standing, would chill a defendant’s exercise of his right of free speech or right to participate in a matter of public interest.
A claim against a person arising from any act in furtherance of the person’s rights of petition or free speech under the United States or California Constitutions in connection with a public issue is subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim. Code of Civil Procedure §425.16(b)(1). The purposes of this legislation include:
- a) to encourage continued participation in matters of public significance without that participation being chilled through abuse of the judicial process, and
- b) to eliminate meritless litigation at an early stage.
Section 425.16 (b) (1) contains a two-part test to determine whether an action is a SLAPP suit subject to a special motion to strike. The first part of the test is whether the action is a SLAPP suit; the second part decides whether, if it is a SLAPP suit, it may nonetheless survive the motion to strike because the plaintiff has established a probability of prevailing on the complaint. Once the court determines the first prong of the statute has been met, the plaintiff must provide the court with sufficient evidence to permit it to determine whether there is a probability the plaintiff will prevail on the claim.
As used in CCP Section 425.16, an act in furtherance of a person’s right of petition or free speech in connection with a public issue includes:
(1) A written or oral statement or writing made before a . . . judicial proceeding;
(2) Any written or oral statement or writing made in connection with an issue under consideration or review by a . . . judicial body . . . ;
(3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; or
(4) any other conduct in furtherance of the exercise of the constitutional right of petition or free speech in connection with a public issue or an issue of public interest.
In Greka Integrated, Inc. v. Lowrey (2005) 133 Cal. App. 4th 1572, the Court of Appeal affirmed the trial court’s granting of an anti-SLAPP motion and dismissal of the complaint. In that case, Greka Integrated, Inc. (“Greka”) sued a former employee, Gary Lowrey (“Lowrey”) for breach of contract and conversion. Specifically, Greka asserted that Lowrey had breached a Nondisclosure Agreement he had signed when he came to work for Greka, by taking and providing to other third parties confidential information of Greka, and converting that confidential information to his own use and benefit. Lowrey moved to strike the complaint as an anti-SLAPP action, claiming that Greka’s causes of action arose out of Lowrey’s protected speech and that Greka had not shown a probability of prevailing on the merits.
Greka hired Lowrey to work as a safety manager. Approximately a year later, unable to continue his employment due to stress, Lowrey took medical leave. He claimed Greka had refused to correct unsafe conditions Lowrey had brought to Greka’s attention, causing him to experience debilitating stress. He further contended that he had permission from Greka to take home the e- mails and other documents Greka accused him of converting and providing to other third parties, and retained them only because he never returned to work. He further asserted that Greka never asked for return of the documents and e- mails.
Lowrey testified on behalf of employees of Greka who sued Greka for injuries resulting from an explosion allegedly due to unsafe conditions maintained by Greka. Lowrey also cooperated in investigations of Greka by the District Attorney, and provided the district attorney, and his own attorney, with the e- mails and documents he retained after leaving his employment at Greka.
The trial court granted Lowrey’s motion and dismissed Greka’s complaint. The Court of Appeals affirmed, noting:
A cause of action “arises from” protected activity where the act underlying the plaintiff’s cause of action, or the act which forms the basis for it was itself an act in furtherance of the right of petition or free speech (Citation omitted). In deciding whether Lowrey has met the “arising from” requirement, we consider “the pleadings and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” (Citation omitted).
Id. at 1578.
The court noted that Greka’s complaint did not identify the specific statements or documents disclosed by Lowrey that constituted a breach of the nondisclosure agreement or conversion. Id. at 1579. Further, in his declaration, Lowrey denied possessing or disclosing any of Greka’s confidential information. Id. He stated Greka authorized him to take the documents at issue, and that he disclosed information related solely to Greka’s non-compliance with the law to the district attorney, various public agencies and his own attorney, and to family and friends to explain why he could no longer work for Greka. Id.
The Court of Appeal ruled that disclosing documents to these individuals, including Lowrey’s own counsel, were all protected activities, because they constituted statements made before a judicial proceeding or any other official proceeding authorized by law. Id. at 1580. Accordingly, ruled the Court, Lowrey had met his burden of showing that Greka’s complaint arose from protected speech. Id.
The Court noted that the burden then shifted to Greka to show a probability it would prevail on the merits at trial, and that in making this determination, the court must again consider the pleadings and the supporting and opposing declarations stating the facts on which the claims are based. Id. at 1580-1581. The Court further noted that the only evidence that Lowrey disclosed any information about Greka (other than to state agencies and his own attorney, which admittedly constituted protected activity) was his admission that he told family and friends why he was leaving his job at Greka. Id. at 1581. However, Greka submitted no admissible evidence that the information Lowrey had provided family and friends contained any confidential or proprietary information. Consequently, Greka failed to sustain its burden of proving that its breach of contract claim had merit. Id.
A different result was reached in World Financial Group, Inc. v. HBW Ins. & financial Services, Inc. (2009) 172 Cal. App. 4th 1561. World Financial Group (“WFG”) was the prior employer of certain individual defendants who joined defendant HBW, a competitor of WFG. WFG alleged in its Complaint that its former employees had breached a Nondisclosure Agreement they had signed when they first came to work for WFJ, and had provided confidential information and trade secrets to their new employer, HBW. WFG also asserted claims against the defendants for violation of the Uniform Trade Secrets Act, the Unfair Competition Law, and asserted claims for interference with prospective economic advantage.
Defendants filed an anti-SLAPP motion to strike the Complaint, arguing that WSG’s claims were based on defendants’ speech and conduct in furtherance of the exercise of the right of free speech in connection with a public issue, namely, “the pursuit of lawful employment,” as well as “workforce mobility and free competition,” all of which they contended were matters “a public interest and protected public policy.”
WFG successfully argued that the defendants had failed to satisfy the first aspect of the anti-SLAPP statute because, among other things, “[the] complaint involves private conduct, done in a non-public forum, resulting in the violation of a private contract and unfair misappropriation of WFG’s confidential trade secret information.” The trial court denied the motion to strike, and the Court of Appeal affirmed, agreeing that the defendants failed to show that WSG’s complaint was based on acts in furtherance of defendants’ free speech rights. The Court of Appeal ruled that, “the anti-SLAPP law applies to claims ‘arising from’ speech or conduct “in furtherance of the exercise of the constitutional right of free speech in connection with a public issue or an issue of public interest.”
The Court of Appeal noted that all of the allegedly wrongful conduct and speech were committed in a business capacity, and were directed at a competitor (WFG) and its customers for the sole purpose of promoting a competing business.
The difference between the Greka case and the World Financial Group case, is that in Greka, the conduct of the defendant which formed the basis of the complaint was itself an act in furtherance of the right of free speech or petition, whereas in World Financial Group, the conduct which was the basis of the Complaint was not such an act, but rather, was simply a breach of contract and an act of unfair competition.
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When employers and employees part ways, their parting is oftentimes less than amicable. It is not uncommon for one to sue the other. Whether it is the employer suing the former employee for breach of an NDA, unfair competition, misappropriation of trade secrets, breach of the duty of loyalty, or the like, as in the Greka and World Financial Group cases, or the employee suing the employer for wage and hour or other Labor Code violations, as has occurred with considerable frequency of late, counsel for the parties must consider whether an anti-SLAPP motion is available to nip the lawsuit in the bud.
If you are sued in the context of an employment law dispute, be sure to consult with an experienced San Diego employment law or business litigation attorney, to see if an anti-SLAPP motion, or other legal strategy will help disentangle you at the outset of what could otherwise be very expensive and protracted litigation. Gehres Law Group prides itself at hiring lawyers who are exceptional at what they do, have proven results, and are dedicated to obtaining the best results possible for each client. Browse our website for more information about our San Diego business lawyers or contact us for a free evaluation of your case.
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Everyone knows that litigation is an expensive distraction from the true mission of any business. Good management, with well drafted contracts and employee supervision, go a long way to minimize lawsuits. However, despite the “best laid plans”, things happen. Even well-managed businesses sometimes find themselves involved in a lawsuit. When that happens, it is often advantageous to bring a big stick…and be prepared to swing it–which involves hiring an aggressive litigation lawyer and experienced trial attorney.