MONSTER ENERGY COMPANY v. SCHECHTER

ATTORNEY SCHECHTER SIGNED THE SETTLEMENT AGREEMENT “APPROVED AS TO FORM AND CONTENT,” BUT THE AGREEMENT CONTAINED NUMEROUS PROVISIONS THAT SPECIFICALLY APPLIED TO THE ATTORNEYS

A couple sued Monster Energy for the wrongful death of their daughter. The couple was represented by attorney Bruce Schechter. The parties entered into a confidential settlement agreement that stated it was made “on the behalf of the settling Parties…as well as on the behalf of their, without limitation…attorneys…” The agreement’s confidentiality provision stated its application to “Plaintiffs and their counsel of record…” and stated “the Parties and their attorneys” agreed not to breach confidentiality. The settlement agreement contained several additional provisions referring to the attorneys. The parties signed the agreement, and the attorneys signed under the notation “APPROVED AS TO FORM AND CONTENT.” Shortly after the settlement, a website published an article about the case with several quotes from Schechter. Monster Energy sued Schechter for breach of contract and other claims. Schechter filed an anti-SLAPP motion. The trial court granted the anti-SLAPP motion as to all claims except breach of contract. The Court of Appeal affirmed the grant of anti-SLAPP but reversed denial of anti-SLAPP as to breach of contract. The California Supreme Court reversed.

A TRIER OF FACT SHOULD DETERMINE FROM CONTEXT WHETHER AN ATTORNEY INTENDED TO BE BOUND BY A SETTLEMENT AGREEMENT

The parties agreed that Schechter met his burden under the first prong of the anti-SLAPP analysis, so the Supreme Court focused only on whether Monster Energy could establish a probability of prevailing on the merits of the breach of contract claim. The breach of contract claim hinged entirely on whether Schechter was bound by his clients’ settlement agreement. “Approved as to form and content” has a fixed meaning understood by the legal community: it affirms that counsel has read the document, the document embodies the parties’ agreement, and counsel does not object to the client signing it. The California Supreme Court specifically agreed with this definition and stated an intent not to change the meaning of “approved as to form and content.” However, in an agreement containing provisions that specifically apply to the attorneys, signature approving as to form and content does not, as a matter of law, preclude a finding that the attorneys intended to be bound by the agreement. Here, a factfinder could reasonably determine that Schechter intended to be bound by the settlement agreement because numerous provisions, including confidentiality, specifically applied to the attorneys. The intent of the attorney to be bound requires an examination of the agreement as a whole and would be resolved by the trier of fact.

California Supreme Court. Filed 7/11/19. 7 Cal.5th 781. Opinion by Justice Corrigan.

Full Decision

WILSON v. CABLE NEWS NETWORK, INC.

PLAINTIFF WILSON ALLEGED HE WAS FIRED FOR DISCRIMINATORY REASONS

Plaintiff Stanley Wilson, a long-time employee of Cable News Network, Inc. (CNN), wrote and produced various stories of public interest in his 17 years with the company.

In 2014, Plaintiff Wilson wrote a story about the unexpected early retirement of Sheriff Lee Baca. Upon review by an editor, CNN alleged that it determined that parts of the story had been plagiarized. CNN then suspended and finally fired Wilson.

Wilson sued for discrimination based on race and other protected characteristics, as well as for retaliation. Wilson also alleged that CNN defamed him by telling others that he had plagiarized some of his writing.

CNN FILED AN ANTI-SLAPP MOTION

In response, CNN filed an anti-SLAPP motion, alleging that Wilson’s claims arose from a matter of public interest. Specifically, CNN alleged that it could not be sued for determining that Wilson’s writing did not meet its editorial standards. The trial court agreed, and granted the motion.

THE APPELLATE COURT REVERSED THE GRANTING OF THE ANTI-SLAPP MOTION

In a 2-1 decision, the appellate court reversed. It held that the claims arose from allegedly discriminatory behavior, which cannot be protected under the anti-SLAPP statute. In doing so, it contributed to the discussion among the appellate courts about whether the anti-SLAPP statute could apply at all to discrimination claims.

THE CALIFORNIA SUPREME COURT REVERSED THE APPELLATE COURT. THE ANTI-SLAPP STATUTE APPLIES

In reversing the appellate court, our Supreme Court analyzed the anti-SLAPP statute. The statute has a two-part burden shifting scheme. In the first step, the court determines whether the allegations of the complaint implicate a protected activity. Here, CNN relied on Ca. Code Civ. Proc. §425.16(e)(4), which protects any conduct in the furtherance of the right of petition or free speech in connection with a matter of public interest.

EMPLOYMENT DISCRIMINATION CLAIMS ARE NOT EXEMPTED FROM THE ANTI-SLAPP STATUTE

The California Supreme Court explained that there is no exception in the statute for employment discrimination claims.

Although firing someone can be legal, it is of course illegal if done with discriminatory or retaliatory intent. Nonetheless, it is the act, not the intent, with which the anti-SLAPP statute concerns itself. If the termination is connected with a matter of public interest – here, the staffing of a news agency – it will fall within the ambit of the anti-SLAPP statute.

This does not mean that most or even many discrimination claims will be subject to an anti-SLAPP motion. They will indeed be the exception, because, as the court pointed out, most such employment decisions are not connected with a matter of public interest. The Wilson court pointed out that even news organizations like CNN do not have unlimited power to hire and fire, and not every such decision will be a matter of public interest merely because it is connected with the publication of the news. Here, however, because CNN claimed that its termination of Wilson was a result of his plagiarism, its right to address that matter implicated an issue of public concern.

THE SUPREME COURT REMANDED FOR FURTHER FINDINGS

That, of course, is not the end of the analysis. If the allegations are determined to fall within the statute’s purview, the burden shifts to the plaintiff to demonstrate that the claims have minimal merit. This has been likened to the burden of proof on a summary judgment motion. Because the Court of Appeal did not address this part of the analysis, the Supreme Court remanded the matter for further consideration.

THE ALLEGATIONS OF DEFAMATION DID NOT IMPLICATE THE STATUTE

By contrast, Plaintiff Wilson’s defamation allegations were not in connection with a matter of public interest. That is because the statements CNN allegedly made to prospective employers of Wilson and others were not about Sheriff Baca’s retirement, nor even about plagiarism; they were about the reasons for firing Plaintiff Wilson. Wilson was not sufficiently prominent that his firing rose to the level of being a matter of public interest, regardless of the reason for it.

CONCLUSION

This is a nuanced case regarding the anti-SLAPP statute. Plaintiff’s employment lawyers will do well to study the Supreme Court’s latest findings on this law, and learn how to stay on the right side of it.

CELA INVOLVEMENT

Lisa Maki, Jennifer Ostertag, Jill McDonnell and Carney Shegerian all participated in the litigation of this case. Our partners at Consumer Attorneys of California, through FEM Law Group and F. Edie Mermelstein, as well as California Taxpayers Action Network through Briggs Law Corporation, Cory Briggs and Anthony Kim, appeared as Amicus Curiae.

California Supreme Court, Filed 7/22/19. Opinion by Justice Kruger.

Full Decision

MCLEERY v. ALLSTATE INSURANCE CO.

PLAINTIFFS ALLEGED MISCLASSIFICATION AND LABOR CODE VIOLATIONS

Plaintiffs were a putative class of about 1550 property inspectors. They alleged that they had been misclassified as independent contractors, and had been subjected to various violations of California’s Labor Code, such as missed meal breaks and failure to pay overtime. They sued multiple property inspection companies for which the Plaintiffs had performed work at various times.

THE PLAINTIFFS SUBMITTED A DETAILED TRIAL PLAN

Despite submitting a detailed trial plan, Plaintiffs had been denied certification the first time because of the trial court’s finding that their status as employees was not susceptible to common proof.

The appellate court reversed and remanded, with instructions for the trial court to evaluate the proposed sampling plan submitted by Plaintiffs. That plan was devised by Dr. John Krosnick, a survey expert. It was a detailed and involved telephonic survey involving random sampling and statistical analysis of the responses.

THE TRIAL COURT WAS WITHIN ITS DISCRETION TO DENY CERTIFICATION

Despite the detailed nature of the plan, the trial court again denied certification, holding that it provided no method to determine individual liability of the various defendants.

The appellate court affirmed. Although the telephonic survey was found to be “carefully crafted to verify appropriate respondents and accuracy in the responses,” it was not adequate to ascribe liability to any of the particular defendants.

CONCLUSION

Trial plans submitted for class certification must meet all criteria, and the trial court’s conclusion on this matter will be reviewed for an abuse of discretion.

COA, Second Dist., Div. 1, Filed 7/15/19, Opinion by Presiding Judge Chaney.

Full Decision

TOWNLEY v. BJ’S RESTAURANTS, INC.

TOWNLEY SUED BJ’S FOR FAILING TO REIMBURSE HER FOR REQUIRED NON-SLIP SHOES

Plaintiff Krista Townley worked as a server for Defendant BJ’s Restaurants. BJ’s had a safety policy that required all hourly employees to wear black, slip-resistant, close-toed shoes. No specific brand, style, or shoe design was required. Townley purchased a pair of shoes to comply with BJ’s policy and was not reimbursed for the cost of the shoes. BJ’s had a policy of not reimbursing employees for compliant shoes. Townley filed a PAGA lawsuit for failure to reimburse employees for required shoes. The trial court granted BJ’s motion for summary judgment. Townley appealed, and the Court of Appeal affirmed.

BJ’S WAS NOT REQUIRED TO REIMBURSE TOWNLEY FOR SHOES

Labor Code §2802 requires employers to reimburse employees for various work-related expenses, including for uniforms and protective apparel required by OSHA. The Court of Appeal held that Townley’s shoes were not part of a uniform and were generally usable in the restaurant occupation. Therefore, BJ’s was not required to reimburse Townley and other employees for the shoes.

COA 3^rd Dist. Filed 6/4/19, publication ordered 7/8/19. 37 Cal.App.5th 179. Opinion by Acting Presiding Justice Butz.

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