Stenehjem v. Sarren

In anti-SLAPP suit, there is no requirement that it demonstrate an express threat or demand for a specific sum of money in writing in anticipation of litigation, to necessarily constitute extortionate.

In a recent case, the Court evaluated the various variables, elements, and other circumstances that constitute of an extortionate based writing. Specifically, the Court assessed the extent by which an anti-SLAPP suit may still constitute an extortionate based writing despite the lack of an expressed threat or a specific sum of money in writing in anticipation of litigation. In this particular case, the employee Plaintiff sued his former employer for defamation, wrongful termination, and other employment based causes of action. The employer refused to settle at which point, the Plaintiff threatened to file a criminal complaint against the employer, to which the employer then filed a complaint against Plaintiff for extortion to which Plaintiff in response filed an anti-SLAPP suit seeking to dismiss the extortion complaint. The purpose of such anti-SLAPP laws in California are for the purpose of effectuating free speech, in particular insuring even employees are able to exercise such rights without fear of retaliation or reprisal from employers.

The trial court in granting Plaintiff’s anti-SLAPP motion reasoned that Plaintiff had met his burden regarding activities deemed to be protected under California Civil Code Section 425.16(e)(2); such communications were made in anticipation of litigation; and the employer had not demonstrated the ability to prevail on the cause of action for extortion. In other words, the trial court determined that Plaintiff’s correspondence threatening to file a criminal complaint against the employer was protected activity under California’s anti-SLAPP motion, and therefore, despite the appearance of extortion, was nonetheless protected free speech from an employee to an employer. Additionally, the trial court found it irrelevant as to whether or not such threat to file a criminal complaint was in any way substantively related to the employee’s claims of defamation and wrongful discharge, rather the Court determined that the very impingement of the employee’s first amendment rights was relevant and weighed in favor of the employee in this regard.

The Appeal

Upon review, the California Court of Appeal reversed the trial court, specifically finding that Plaintiff’s conduct was not protected under the anti-SLAPP statute, but rather evidenced clear conduct of extortion. In evaluating Plaintiff’s conduct, the California Court of Appeals reasoned that Plaintiff’s threat to actually file a criminal complaint was based on purported conduct that wasn’t in any meaningful way related to the employment relationship, but rather alleged misconduct and federal False Claims Act, and not at all related to Plaintiff’s defamation and wrongful termination claims. The California Court of Appeals determined that the actual content, facts, and specifics of the employee’s threat to file a criminal complaint against the employer was relevant, and in so doing, evaluated whether such threat was based on the actual substance of the employee’s defamation and wrongful discharge or alternatively, whether such threat was based on separate legal allegations.

Despite Plaintiff’s argument that his conduct could not be construed as extortion because there was no threat or a demand for a specific sum of money, the Court found without basis, wherein the Court viewed such conduct as evidencing an actual attempt towards extortion. From an employment law perspective, this case is significant because it demonstrates the extent by which the Court will actually look at the specific facts, including details of alleged conduct to determine whether there is a basis in law or fact regarding the claims that are being asserted and evaluating whether or not a particular legal remedy is available to either the employee or the employer. Persuasive for the Court in this particular matter was not necessarily the trial court’s per se determination regarding violations of so-called protected employee based action, but rather the actual factual circumstances, evidence, and additional information by which the employee was seeking employment based claims for defamation and wrongful termination.

This case highlights that the doctrine of laches or “unclean hands” is applicable in employment settings as well, where in the event an employee seeks particular legal claims against an employer, the Court will similarly look and weigh whether or not there exists any violative related conduct by the employee. Here, the Court found just that, in particular conduct by the employee that evidenced not only bad faith and unclean hands, but more significantly, met the legal standard and definition of extortion which was determined to be completely unrelated to the plaintiff employee’s claims for defamation, wrongful discharge, and other employment based claims. As such, employers should not necessarily beholden to threats, whether civil or criminal asserted by employees, especially where such can be construed as extortion by the Courts against the employee.

If you have any employment-related dispute contact the Orange County Wrongful Termination Lawyers at Nassiri Law Group, practicing in Orange County, Riverside, and Los Angeles. Call 714-937-2020.