United States: The Burgeoning Use Of "Strong" Anti-SLAPP Statutes In Employment Law

The acronym SLAPP stands for "Strategic Lawsuit Against Public Participation." A SLAPP lawsuit seeks to chill, dissuade, or punish a party's exercise of constitutional rights to free speech and to petition the government for redress of grievances. The majority of states (at least 28) have adopted or recognized "anti-SLAPP" statutes enacted for the purpose of safeguarding individuals' First Amendment rights. The "strength" of an anti-SLAPP statute is directly correlated with the text of the statute itself. Strong statutes are legislatively drafted in ways that invite courts to liberally construe and apply the statute broadly in various contexts.

One of the strongest anti-SLAPP statutes is the Texas Citizens Participation Act (TCPA) (codified in Chapter 27 of the Texas Civil Practice and Remedies Code). The TCPA explicitly instructs courts to construe its provisions liberally "to effectuate its purpose and intent fully." Subject to a narrow commercial-speech exemption (see, for example, Castleman v. Internet Money Ltd.), the TCPA "protects citizens from retaliatory lawsuits that seek to intimidate or silence them on matters of public concern." The TCPA provides a two-step, burden-shifting mechanism for dismissing a meritless lawsuit when the lawsuit is based on, or relates to, the exercise of a constitutional right about a matter of public concern.

Similar to the TCPA, the California anti-SLAPP statute (Cal. Civ. Proc. Code § 425.16) likewise mandates that the statute "shall be broadly construed." Under California's anti-SLAPP law, the cause of action must arise from the protected activity, and a claim arises from protected activity when that activity underlies or forms the basis for the claim. But not all statutes are created equal. In contrast to the language contained in the Texas and California anti-SLAPP statutes, states such as New York have narrowly worded anti-SLAPP statutes that naturally limit their scope and applicability.

The Rise of Strong Anti-SLAPP Law

The stark political divide, together with the prominence of social media, has presented parties and courts alike with ample opportunities to rely upon strong anti-SLAPP statutes in cases involving defamation. Anti-SLAPP law recently received nationwide attention in December 2018 when a California federal district court dismissed the defamation lawsuit filed by Stormy Daniels against the President of the United States. Using choice of law principles, the Central District of California found that the TCPA applied to Daniels's claim arising from a social media post, and in support thereof, explained that "Texas offers robust protection for the freedom of speech" which "seeks to encourage and safeguard the constitutional rights of persons." Further validating the true strength of the TCPA, Daniels was ordered to pay $293,052.33 in attorneys' fees, costs, and sanctions as was required by the TCPA's mandatory award of fees provision.

Anti-SLAPP in Employment Law

In states with strong anti-SLAPP laws, courts have found that certain adverse employment actions implicate constitutional rights and fall within the purview of the anti-SLAPP statute. For example, a California appellate court recently affirmed application of the California anti-SLAPP statute in the employment law context. In Symmonds v. Mahoney, the causes of action arose from Mahoney's decision to terminate his drummer. In response, and allegedly in retaliation, Symmonds filed a lawsuit alleging discrimination. Mahoney relied on the California anti-SLAPP statute, arguing that he had the constitutional right to select whomever he wished to perform music with him and that Symmonds's claim arose in connection with an issue of public interest (given the media's and the public's interest in Mahoney and his music). The appellate court emphasized that Mahoney's burden in applying the anti-SLAPP statute "was not an onerous one" and required only a "prima facie showing that the plaintiff's claims arise from the defendant's constitutionally protected free speech or petition rights" in connection with a public issue or an issue of public interest and that "a court must generally presume the validity of the claimed constitutional right in the first step of the anti-SLAPP analysis."

Texas courts are consistently finding that employment claims fall within the purview of the TCPA. In a recent 2018 case, Morgan v. Clements Fluids S. Texas, LTD., the employer, Clements, sued former employees for misappropriation of trade secrets. The Texas court held the misappropriation of trade secrets claim was predicated factually on conduct that fell within either the "exercise of the right of association" by the employees or their "exercise of free speech" as the TCPA defines those terms. The TCPA defines the "exercise of the right of association" as "a communication between individuals who join together to collectively express, promote, pursue, or defend common interests," while the "exercise of the right of free speech" is "a communication made in connection with a matter of public concern."  Having concluded that Clements' claim was based on, related to, or responds to the exercise of a TCPA right, the court then analyzed whether or not Clements established by clear and specific evidence a prima facie case for each essential element of its misappropriation of trade secrets claim. Under this step, the court ultimately concluded that Clements met its burden to prove, by clear and specific evidence, a prima facie case on misappropriation of trade secrets.

Enforcement of non-disclosure agreements may likewise be subject to anti-SLAPP statutes such as the TCPA. In S&S Emergency Training Sols., Inc. v. Elliott, S&S sued Elliot, its former employee, claiming she had violated a non-disclosure agreement by disclosing confidential information. Elliott responded with a motion to dismiss pursuant to the TCPA in which she contended that her actions were an exercise of her right to petition and her right of free speech. She argued her actions related to the training of emergency medical personnel, and thus, her disclosure was a matter of public concern. S&S countered that Elliott contractually agreed to forgo her rights of free speech and petition as to confidential information covered by the non-disclosure agreements. Alternatively, argued S&S, there was clear and specific evidence of a prima facie case of breach of contract, and under the TCPA burden shifting scheme, S&S was therefore entitled to maintain its suit. The trial court denied Elliott's motion to dismiss without explanation, and Elliott filed an interlocutory appeal where the decision was reversed. On petition for review, the Texas Supreme Court conducted the requisite TCPA burden-shifting analysis and in step one, confirmed the TCPA applied since S&S sued Elliott in response to her exercise of free speech. The Texas Supreme Court reversed the court of appeals, however, finding S&S had provided clear and specific evidence of a prima facie case that she breached the agreements. Importantly, the decision exemplifies the increasingly broad application to employment disputes.

Application in Federal Court—Language Matters

Courts continue to struggle with whether the anti-SLAPP statute can be applied in federal court. The answer, in reckoning with the Erie doctrine, depends on whether the statute is construed as procedural or substantive. The difficulty is when procedure and substance are so interwoven that rational separation become "well-nigh impossible." Some circuits have ventured to tackle the issue by a plain reading of the statutory language. Recently, the Tenth Circuit Court of Appeals held that on "a plain reading of the New Mexico anti-SLAPP statute," the New Mexico anti-SLAPP statute (which is codified at N.M. Stat. Ann. § 38-2-9.1, 9.2) was entirely procedural in nature because the statute was not designed to influence the outcome of an alleged anti-SLAPP suit but only the timing of that outcome as the Tenth Circuit Court of Appeals ruled in Los Lobos Renewable Power, LLC v. Americulture, Inc.. The court noted, though, that the statute was unlike many other states' anti-SLAPP statutes, which shift substantive burdens of proof or alter substantive standards.

To that point, and subsequent to the decision in Los Lobos, a Kansas federal district court in Caranchini v. Peck was tasked with determining whether or not the Kansas anti-SLAPP statute could apply in federal diversity actions. Looking to other jurisdictions interpreting similar anti-SLAPP statutes, the court analogized the similar burden shifting components required in both the Maine and D.C. anti-SLAPP statutes and considered the practical effects of not applying the anti-SLAPP statute in federal court. The First Circuit had previously opined that application of the anti-SLAPP statute in federal diversity actions would "best serve the 'twin aims for the Erie rule: discouragement of forum shopping and inequitable administration of the laws.'" The district court agreed with the First Circuit and held the statute applies in federal diversity actions.

The Fifth Circuit Court of Appeals "assumed" the substantive nature of the TCPA in the 2016 Cuba v. Pylant decision, but has yet to definitively rule on whether the TCPA is procedural or substantive, or whether it applies in federal court, as held in the more recent 2018 Fifth Circuit case, Diamond Consortium, Inc. v. Hammervold. Notwithstanding the Fifth Circuit's ostensible inclination toward applying the TCPA in federal court, in 2019, the Eastern District of Texas in Star Systems Int'l Ltd. v. Neology Inc. found more persuasive the position that the TCPA is a procedural mechanism for speedy dismissal of a meritless lawsuit and further stated that regardless if classified as procedural or substantive, the TCPA does not apply in federal court as its provisions conflict with federal procedural Rules 12 and 56. Neology Inc. filed an appeal nine days after the opinion was issued.

Conclusion

Language matters. The strength of a state's anti-SLAPP statute hinges on the text of the statute itself. Strong anti-SLAPP statutes, like those in Texas and California, are increasingly leveraged by attorneys, and accepted by courts, in wide-ranging contexts such as employment law. While determining the application of these statutes in federal courts also requires a textual analysis, the issue remains unresolved for many circuits.

A version of this article was previously published in Law360.

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