Texas anti-SLAPP in Employment Cases: Defendants’ Superpower Joe Ahmad Houston Darren G. Gibson Austin

AGENDA Texas anti-SLAPP Statute: Defendants’ Superpower Negative Employment Review as Free Speech Theft of Trade Secrets as Right of Association Plaintiff Liable for Attorney’s Fees and Sanctions Anti-SLAPP Applicable in Federal Court? What You Can Do Questions

I am suing you for defamation, business disparagement, … No! You’re paying my attorney’s fees and expenses.

SLAPP: Strategic Lawsuit Against Public Participation SLAPP suits intended to chill, or in retaliation for, exercise of rights of freedom of speech, freedom to petition, and freedom of association. SLAPP Defendant can file motion to dismiss within 60 days of service. Dismissal unless plaintiff establishes “clear and specific evidence” of each element of each claim. Dismissal if defendant establishes affirmative defense. Defendant entitled to attorney’s fees, expenses, and sanctions. Right to interlocutory appeal if motion is denied.

Threshold Question: Does Statute Apply? Texas Citizens Participation Act, Tex. Civ. Prac. & Rem. Code Ch. 27 TCPA applies to any legal action that is “based on, relates to, or is in response to a party’s exercise of the right of free speech, right to petition, or right of association.” Each right defined broadly in the TCPA. TCPA is not limited to constitutional definition of rights or to a specific type of claim (e.g., defamation). TCPA “shall be construed liberally to effect its purpose and intent fully.”

What if I can describe an adverse employment action as an exercise of free speech?

Negative Employment Review: Matter of Public Concern Travis Coleman was responsible for gauging Exxon’s storage tanks at end of day. One day, Travis failed to gauge tank 7840 and then falsely reported he did. Exxon investigated and terminated Coleman. Coleman sued for defamation and other torts based on supervisors’ statements in investigation. Tank 7840 ExxonMobile Pipeline Co. v. Coleman, 512 S.W.3d 895 (Tex. 2017)

Negative Employment Review: Matter of Public Concern TCPA applies to speech “made in connection with a matter of public concern,” which includes: “(a) health or safety; (b) environmental, economic, or community well-being; ...” Private statements among Exxon employees were “related to a ‘matter of public concern’ because they concerned Coleman’s alleged failure to gauge tank 7840, a process completed, at least in part, to reduce the potential environmental, health, safety, and economic risks associated with noxious and flammable chemicals overfilling and spilling onto the ground.”

I’m tired of Batman getting all the credit I’m tired of Batman getting all the credit. I’m going to open up my own shop and build a better Batmobile. Want to join me? `

Trade Secret Cases: Freedom of Association Former Autocraft employee started a new competing shop, Elite, hiring Autocraft employees. Autocraft sued Elite and employees for trade secret misappropriation. Elite defendants filed anti-SLAPP motion to dismiss. Elite Auto Body LLC v. Autocraft Bodywerks, Inc., 520 S.W.3d 191 (Tex. App.—Austin 2017)

Opening Competing Business = Right of Association TCPA defines “exercise of the right of association” as “a communication between individuals who join together to collectively express, promote, pursue, or defend common interests.” “All of Autocraft’s claims center upon [defendants’] communications as they promote and pursue their common interests in developing and maintaining a competitive auto body repair business.” Autocraft’s claims dismissed because it failed to provide “clear and specific evidence” to satisfy the “element-by-element, claim-by-claim exactitude required by the TCPA.”

Plaintiff Liable for Attorney’s Fees and Sanctions Texas statute mandates award of reasonable attorney’s fees and expenses (even if motion only partially granted). Plaintiff liable and possibly their attorneys (as per one federal court opinion). Courts may award tens of thousands of dollars in sanctions (precedent for up to $75,000). Recent Littler judgment: $117,000 in fees and costs against plaintiff and his attorneys, plus $15,000 in sanctions against plaintiff.

anti-SLAPP in Federal Court?

anti-SLAPP in Federal Court? Historically, Fifth Circuit has found anti-SLAPP statutes substantive under Erie and applied to state law claims in federal cases. Circuit split developed in 2015 as to whether anti-SLAPP statutes directly conflict with FRCP 12 and 56 under Burlington No. standard. No conflict – 1st Cir. (2010), 9th Cir. (1999) Conflict – D.C. Cir. (2015) Fifth Circuit has repeatedly deferred on the issue of FRCP conflict. Issue has been raised in pending appeals and like to be addressed within next year.

What Can You Do? Plaintiff: Defendant: Carefully consider if lawsuit based on, relates to, or in response to exercise of protected rights. Gather evidence of elements of each claim, including damages, before filing. Consider pre-litigation discovery. Ensure claims not barred by affirmative defense (e.g., absolute or qualified privilege in defamation cases). Federal may be court preferable (TBD). Analyze complaint to determine if statute applies to any claims. Prepare evidence to support affirmative defenses. File motion to dismiss within 60 days and get hearing set 60 days thereafter. Be ready to document and justify attorney fees. State court may be preferable (TBD).

Joe Ahmad 713-655-1101 joeahmad@azalaw.com Darren G. Gibson 512-982-7259 dgibson@littler.com