Anti-SLAPP law doesn’t always protect employers after employees sign a release

California’s law on strategic lawsuits against public participation (SLAPP) does not automatically protect statements an employer makes when terminating an employee just because the employer asks the employee to sign a release of claims, a California court recently said.

A husband and wife – the defendants in the case of Nirschl v. Schiller et al – hired the plaintiff in 2017 at the recommendation of a friend who operated a nanny placement service. The plaintiff cared for their minor child and performed household duties.

The husband allegedly learned about four incidents that made them decide to terminate the plaintiff’s employment in March 2020. She supposedly:

• falsified time and expense records
• referred to the spouses’ son as “you fucking little shit,” a phrase that the child allegedly repeated
• violently shook the son after he had gone to the bathroom in his diaper
• failed to tell them that she was in a car crash with the child in the car

The plaintiff sued the spouses. She claimed that the spouses failed to give her meal and rest breaks, to pay overtime wages, to provide accurate wage statements, to reimburse work-related expenses, and to timely pay wages owed at the end of her employment. She later added a defamation claim.

The plaintiff alleged that the spouses:

• offered to give her a severance payment in exchange for a release of potential claims against them
• manipulated the wife’s friend to assist in their effort to intimidate her into signing the release
• made false and defamatory statements to the friend accusing her of repeated misconduct, including the four alleged incidents, with the intent to avoid paying significant unpaid overtime and to destroy her reputation, employment, and career

In response, the spouses filed a motion to strike the plaintiff’s entire complaint under section 425.16 of California’s Code of Civil Procedure, also known as the anti-SLAPP law. They claimed that the anti-SLAPP law protected their allegedly defamatory statements because they were made during pre-litigation discussions.

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The spouses alleged that the conversation between the wife’s friend and the plaintiff went as follows. First, the friend offered the plaintiff the proposed settlement. Next, the plaintiff said that she could sue the spouses for a lot more and gave a cocky smirk. The plaintiff then listed unsubstantiated, untrue, and potentially embarrassing claims against the husband.

The trial court denied the anti-SLAPP motion. The issue, according to the trial court, was whether the spouses reasonably believed that the plaintiff was contemplating litigation when they told the wife’s friend the reasons for terminating the plaintiff’s employment and allegedly requested the friend’s assistance in resolving their problem with the plaintiff. The trial court concluded that the anti-SLAPP law did not protect the spouses’ allegedly defamatory statements.

Employers’ appeal rejected

The California Court of Appeal for the Second District issued a judgment agreeing with the trial court’s decision. First, the appellate court held that the spouses failed to show that the plaintiff’s defamation claim was based on statements protected by the anti-SLAPP law.

The spouses argued that the anti-SLAPP law automatically protected their allegedly defamatory statements because they arose during the husband’s attempt to negotiate a settlement of litigation contemplated by the plaintiff.

The anti-SLAPP law automatically protected an employer’s effort to obtain a pre-litigation release from a just-terminated employee in exchange for severance pay because there was an implication that the ex-employee might sue, the spouses claimed.

The appellate court disagreed. It accepted that the end of many employment relationships involved negotiations over a release in exchange for a severance payment, given that there was often a possibility that the terminated employee would sue.

However, without evidence of potential litigation such as a demand letter, the conflict would only lead to litigation if the negotiations failed, the appellate court said. At that point, future litigation was only theoretical rather than anticipated, the appellate court explained.

In this case, the plaintiff’s defamation claim did not appear to allege pre-litigation activity protected by the anti-SLAPP law, the appellate court concluded.