C.A. Says Ex-Employee’s Settlement Demand Was Extortion

A fired worker who sued his ex-employer for defamation and wrongful termination committed extortion when he threatened to instigate a federal investigation of the company’s business practices if his demands were not met, the Sixth District Court of Appeal ruled.

Source: www.metnews.com

In another application of Flatley v. Mauro, the California Court of Appeal held that a pre-litigation demand letter was not protected under the litigation privilege because it crossed the line into extortion.

In a series of settlement demands prior to filing the lawsuit, the plaintiff stated that while he did not want to “make a Federal case out of” his employment dispute, he had been told by attorneys that if he initiated a qui tam action under the False Claims Act, it would “involve the United States the United States Attorney General, the Department of Justice or the DOD.” In other words, the plaintiff was using the threat of a criminal action to try and extract the payment of money.


The trial court had granted an anti-SLAPP motion, finding that the threats were protected speech, but the Court of Appeal reversed and reinstated the action.


The case is Stenehjem v. Sareen, 14 S.O.S. 2966. More anti-SLAPP news.

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Aaron Morris, Attorney
Aaron Morris
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