Court of Appeal Upholds SLAPP Against Accused Harasser's Counterclaim

Aber sued Comstock for sexual harassment among other things.  This did not sit well with Comstock, who sued Aber back, claiming defamation among other things.

Aber then filed a motion to strike Comstock's cross-claim. She claimed his lawsuit was a "SLAPP" or a retaliatory action against Aber.  The trial court agreed and the Court of Appeal affirmed.

If someone sues you and you return the favor, your lawsuit may be subject to a motion to strike as a "SLAPP" (strategic lawsuit against public participation).  To overcome the anti-SLAPP motion, you have to prove that you have a good chance of winning your case.   Comstock apparently did not do that, which is why his suit was dismissed.  If you file a lawsuit that is dismissed as a SLAPP, you owe the other side attorney's fees.   So, be careful before filing cross claims. It's probably wise to win your case first and then sue for malicious prosecution.

Anyway, what makes this case even more interesting is that  the Court of Appeal held that the harassment victim's pre-litigation statements made to company HR investigators were covered by the anti-SLAPP statute as protected conduct.  That means, for example, that if an employee participates in a sexual harassment investigation and reports misconduct against another employee, any defamation lawsuit will be examined as a potential SLAPP.  Even witnesses who report to HR likely will be protected from retaliatory defamation lawsuits brought by the accused harasser.  While that is good news for witnesses and victims of discrimination or harassment, it is bad news for those who are wrongly accused of harassment, who will have a tougher time protecting themselves from career-ending accusations.

This case is Aber v. Comstock and the opinion is here.

Court of Appeal: Employer's Lawsuit Against Terminated Employees Beats Anti-SLAPP Motion

Overhill Farms received notice from the IRS that hundreds of its employees' social security numbers were invalid. The company gave employees a chance to correct the problem. Those who did not were terminated. The law imposes fines and potential criminal liability on employers who permit employees to work with false social security numbers.

Led by an activist organization, some of the terminated employees began protesting at Overhill. The protestors accused Overhill of being racists and ageists, and all kinds of other -ists because of the termination decision based on the IRS's action.  The leaflets they handed out said, among other things:

“OVERHILL FARMS UNFAIR and RACIST EMPLOYER.”  The leaflets distributed at the protests contained the heading “OVERHILL FARMS UNFAIR AND RACIST.”  Overhill is “[a]n abusive and racist employer in the manner that it treats its workers,” which “discriminates against Latinos”; has “unfairly terminated 300 workers,” has “fired workers for expressing themselves freely according to the First Amendment of the U.S. Constitution,” has “exploited Latinos for 30, 20, 15 and 10 years and then threw them to the streets — many single female heads-of-household,” and has exploited part-time workers “visciously as if modern slavery were in place.” 

Well, Overhill fought back. It sued the protestors for a variety of torts, including defamation, interference with prospective economic advantage, and unfair business practices. But the protesters challenged the lawsuit as a "SLAPP" - a lawsuit in retaliation for their First Amendment activity - protesting.
Protesting of course is protected by the First Amendment. But the First Amendment does not protect against libel - provably false statements of fact. Certain types of false statements have to be made with malice to constitute defamation.

The court of appeal said that merely calling Overhill "racist" was not defamatory:

We agree that general statements charging a person with being racist, unfair, or unjust – without more – such as contained in the signs carried by protestors, constitute mere name calling and do not contain a provably false assertion of fact.  Similarly, references to general discriminatory treatment, such as that contained in the handbill and flyer here, without more, do not constitute provably false assertions of fact.  (See, e.g., Beverly Hills Foodland v. United Food & Commercial Workers Union, Local 655 (8th Cir. 1994) 39 F.3d 191, 196 [“‘[T]o use loose language or undefined slogans that are part of the conventional give and take in our economic political controversies — like ‘unfair’ and ‘fascist’ — is not to falsify facts.’  [Citations.]”].) 

But, the protestors went further:

The press release contains language which expressly accuses it of engaging in racist firings and declaims upon the disparate impact the firings have had on “immigrant women.”  Similarly, after discussing Overhill’s termination of one-fourth of Overhill’s work-force, the leaflets explicitly assert that  the discrepancy in social security numbers was merely a “pretext” to eliminate certain workers, and refers to Overhill’s conduct as “racist and discriminatory abuse against Latina women immigrants.”  Moreover, in almost every instance, defendants’ characterization of Overhill as “racist” is supported by a specific reference to its decision to terminate the employment of a large group of Latino immigrant workers.  The assertion of racism, when viewed in that specific factual context, is not merely a hyperbolic characterization of Overhill’s black corporate heart – it represents an accusation of concrete, wrongful conduct.

 The court therefore held that generally calling someone racist is hyperbole. But saying that an employer fired an employee due to unlawful discriminatory motive is a provable assertion of fact.  That conclusion could have ripple effects beyond protesting. For, if this opinion stands, when an employee alleges wrongful termination due to discrimination, retaliation, etc., an employer is within its right to sue for defamation if it can prove that the statement is false.

The decision was 2-1. The dissent said:

I part company with the majority opinion in two fundamental respects.  First, my colleagues in the majority have incorrectly made this court the first state or federal appellate court in America, ever, to hold that the epithet “racist” constitutes a provably false assertion of fact as the basis of a claim of defamation.  The majority attempts to argue that it is only so holding because the term “racist” was used in combination with other words.  But those other words are not actionable and the majority does not and cannot argue otherwise.  Whether the word “racist” is used as a noun or an adjective in combination with other words does not matter.

Second, in my view, the majority misapplies the United States Supreme Court opinions in Milkovich v. Lorain Journal Co., supra, 497 U.S. at page 19 and Linn v. United Plant Guard Workers (1966) 383 U.S. 53, 58.  Defendants’ communications in their dispute with their employer simply did not contain a provably false fact and the reasons for their allegations were disclosed.  (Franklin, supra, 116 Cal.App.4th at p. 387.)  The majority opinion’s parsing of the one word “discrepancies” in reaching its conclusion is not consistent with United States Supreme Court jurisprudence in defamation cases.  I agree the employees’ claims might not be persuasive, but that does not make them defamatory.

My thought is that the California or US Supreme Court will take up this case.  A lot of former employees accuse their employers of being "racist" or discriminatory in making employment decisions.  One can imagine the argument that this decision will interfere with the enforcement of the civil rights laws.  One can also argue that the term "racist" or "discriminatory" is a powerful weapon and should not be tossed around without a factual basis to back it up.  There's the rub. We'll see what happens next.

The opinion is Overhill Farms, Inc. v. Lopez and the opinion is here.

DGV

Court of Appeal Applies Anti-SLAPP Law to EDD Report

Dible worked for the Haight Ashbury Free Clinic as a counselor. The clinic terminated her employment for performance reasons. The clinic contested her unemployment claim. Ms. Dible sued for defamation and other claims. However, after some litigation, the clinic moved the court under the anti-SLAPP statute to dismiss the claim. Why? Because the clinic exercised its First Amendment rights to make a report in an official proceeding. The Court of Appeal agreed that the anti-SLAPP statute barred her claim. Dible then argued that she should be able to assert a claim for "defamation by compelled self-publication," because the clinic should have known Dible would have to re-publish to third parties the clinic's assertions regarding her performance.

The Court of Appeal disagreed:

Here we are clearly being asked to create a wider exception for claimants who have not republished where it is foreseeable that they might do so in the future. We decline to do so. Such a rule would require courts to engage in considerable speculation as to future conduct and lead to untenable attempts to speculate on future damage. A court could not, for instance, account for the possibility that after a plaintiff has received an award for damages in the form of lost future wages, he or she might republish while seeking a job and be given the job, thus not be damaged, nonetheless.

Since publication or republication to a third person is necessary to establish the cause of action of defamation, we conclude that plaintiff cannot establish a probability of success upon her defamation claim. The motion pursuant to section 425.16 was therefore properly granted.

The case is Dible v. Haight Ashbury Free Clinic and the opinion is here.

Cease and Desist Letter Gets SLAPP Protection

Here's the way the court put it:

An employer fired one of its employees amid allegations that the employee had misappropriated customer lists and solicited his employer’s customers to start a
competing business. Several months before litigation was commenced by the employer against its former employee, the employer’s attorney drafted a letter to the employer’s customers that accused the employee of breach of contract and
misappropriation of trade secrets, and that “suggest[ed]” to the customers that, to avoid potential involvement in any ensuing litigation “as a material witness, or otherwise,” the customers should not do business with the former employee. The employee commenced a defamation action against the former employer. We hold that, in the circumstances of this case, the lawyer’s letter to the customers was a “writing made in connection with an issue under consideration or review by a . . . judicial body” (§ 425.16, subd. (e)(2)) and therefore covered by the anti-SLAPP statute because the letter directly related to the employer’s claims against the employee, and the employer was seriously and in good faith contemplating litigation against the employee.

Of note, the court also ruled that it made no difference that the lawyer sent the letter to its customers rather than just the former employee. The court also said that the litigation privilege was irrelevant to whether the communication satisfied the requirements of the anti-SLAPP statute. However, the litigation privilege would be relevant to the second prong of anti-SLAPP analysis - the plaintiff's chance of success on the merits.

This case is good news for practitioners who send out "cease and desist" letters to former employees accused of violating restrictive covenants. It's also good news for employers, as they could have found it harder to find lawyers to send out such letters if the former employee could freely sue for defamation.

The case is Neville v. Chudacoff. The opinion is here.