Wrongful Termination

Can band members sue for wrongful termination?

Eddie Money is looking for two tickets to paradise in the form of an anti-SLAPP motion to get him out of what certainly appears to be a ridiculous suit.

His drummer, Glenn Symmonds, sued Eddie Money for wrongful termination when Money decided to use his son’s band for appearances. Symmonds claimed this “termination” was based on his age and because he has cancer. When those claims didn’t seem to be gaining much traction, Symmonds added his girlfriend to the mix, claiming that he suffered emotional distress from witnessing Money sexually harassing her, citing an incident where he held the mic between his legs like a penis.

Money has responded to the complaint with an anti-SLAPP motion, asserting that the manner in which he presents his music, and hence the make-up of his band, is a protected form of expression.

“The fact that Eddie did not invite Plaintiff to rejoin the band had nothing whatsoever to do with his age,” states the brief. “Nor did it have anything to do with any illness or disability that he suffered. It was based entirely on how inappropriately Plaintiff reacted upon hearing that Eddie wanted to tour with his adult children during the summer.”

I can’t opine on the likely outcome of the motion, because I don’t have knowledge of the evidence that both sides can bring to bear. But I would predict that the motion will satisfy the first prong of the anti-SLAPP analysis, since Money’s performance is a form of expression.

And I can opine that Symmonds needs to get a life. Apparently not only was Money not bothered by Symmonds’ cancer, he held fundraising concerts for him. No good deed goes unpunished.

The Litigation Privilege and Collateral Defamation Actions

Spawning Litigation Actions
I get the same question a couple of times a week, so I decided that a article on the litigation privilege is in order, so I will have a place to send potential clients for a detailed discussion.

The question from potential clients almost always comes up in the context of wanting to start a collateral action* for defamation in response to something that is being said in some other court action. Here are the most common examples:

— A husband is going through a divorce, and his wife or a witness or the wife’s attorney filed a declaration with the court stating that he was physically abusive to the children. He wants to file an action against his wife (or the witness or the attorney) for defamation for the false claims made in the declaration.

— Someone is seeking or has obtained a restraining order against the caller, and in support of the request for a restraining order the person filed false declarations and gave false testimony in court. The caller has absolute proof, including emails and recordings, showing that the statements were false. The caller wants to sue for defamation because of all the false statements, which are now a matter of public record.

— An attorney sent a letter to an employee’s employer, claiming that the employee stole property and trade secrets from his former employer, and threatening to sue if the property is not returned or if the employer makes use of any of the trade secrets. Based on the letter, the company fires the employee rather than to run the risk of a lawsuit. The employee did not take any property from the former employer and is not using any trade secrets, and wants to sue the former employer and its attorney for defamation.

— An employee is suing for wrongful termination, and the deposition of one of his former co-workers is taken. At that deposition, the co-worker falsely claims that she was sexually harassed by the employee suing for wrongful termination. As a result of this claim, the court grants a motion for summary judgment and throws out the action, and the employee’s marriage is severely strained because of the claim of infidelity. The employee wants to sue the co-worker for defamation for what she said at her deposition.

— A person is sued for fraud, and in the complaint there are dozens of false allegations, stating that the defendant engaged in illegal conduct and made misrepresentations to the plaintiff in order to cheat her out of money. After the complaint is served, the plaintiff dismisses the action, but the complaint is now a matter of public record, and anyone doing a search on the Internet can find this complaint with all its lies. The defendant wants to sue for defamation.

Statements Made in Conjunction with Litigation are Privileged

None of the above circumstances would permit an action for defamation. A quick definition is necessary to explain why. Defamation requires an UNPRIVILEGED false statement. Therefore, if a statement is privileged, it cannot be defamatory.

The statements that are privileged are set forth in Civil Code section 47, which states in part:

47. A privileged publication or broadcast is one made . . . (b) In any (1) legislative proceeding, (2) judicial proceeding, (3) in any other official proceeding authorized by law . . . .

Thus, any statement made in conjunction with a “judicial proceeding” is privileged, and cannot form the basis of a defamation action. It’s that simple.

When I explain this to potential clients, I typically get a response that goes something like this:

“So you’re telling me, they can falsely accuse me of rape, and there’s NOTHING I can do about it?!”

“Well, your question was whether you could sue them for defamation, and no, you cannot sue them for defamation.”

“But I can prove that they knew what they said was false.”

“It’s not a question of being able to prove it’s false, you can’t sue them for defamation if the statement is made in conjunction with litigation.”

“So you’re telling me, they could falsely claim I murdered 50 people, and there’s NOTHING I can do about it?!”

And so it goes, with the caller coming up with greater and greater examples of outrageously false statements, apparently thinking that I will ultimately see the foolishness of what I am claiming, and respond, “Oh, well, if he falsely accuses you of killing 20,000 people, then THAT would be enough to sue for defamation.”

It doesn’t work that way. The litigation privilege is absolute, and once you understand the public policy behind this rule, you will probably agree that it is essential. I will also show you why it really doesn’t make any difference in the grand scheme of things.

A World Without the Litigation Privilege

Imagine a legal system without the litigation privilege. Let’s put you into a garden variety personal injury action as an example. You went to a bar and had a couple of beers, but you were there for many hours, so you were stone cold sober on your drive home. When you stopped for a red light, someone rear-ended you, and you are now suffering serious back problems as a result. You are suing the person who rear-ended you for your medical expenses and pain and suffering.

During discovery before the trial, the attorney representing the defendant who rear-ended you contacts your family members and employer, and asks them about your “drinking problem.” Following the conversation with the attorney, your boss calls you in and says you will no longer be permitted to use the company car, because he has concerns about your drinking.

The bartender is deposed and testifies that he saw you drinking before the accident, and recalls that you had ten beers, when in fact you only had two.

At trial, the defendant testifies that you stopped abruptly in the middle of the road for no reason, and that is what caused the accident. He claims that when you got out of the car, you apologized for the accident, stating that you were too drunk to be driving. Both statements are false.

As a result of the testimony of the bartender and the defendant, the jury finds in favor of the defendant. In the hallway following the verdict, the jurors all tell you that you should seek help for your drinking problem. You have to pay thousands in court costs to the defendant.

In this world without a litigation privilege, what do you do? Well, you can’t let stand all those false claims, so you file two more actions, suing the bartender and the defendant for defamation. For good measure, you file a third action against the attorney for talking to people about your alleged drinking problem.

Thus, your one action has now spawned three more. Now, when you testify in those three actions that the bartender, defendant and attorney were all lying, how should they respond? They can’t allow those accusations to go unchallenged, so they each file lawsuits back against you for calling them liars. Our original personal injury action has now spawned six new actions. In fact, since you claimed that the person who rear-ended you was negligent, and he proved that he wasn’t, he probably already sued you for lying about him in the first action.

And there is a collateral effect. The bartender testified to what he thought was the truth. He remembered you as having ten beers, but he had confused you with someone else and was just wrong. For coming to court and telling what he thought was the truth, he bought himself a lawsuit. He now must pay an attorney thousands of dollars to defend him against your defamation action. Would anyone ever agree to testify in court if they could be sued for what they say? They could be compelled to attend with a subpoena, but you can bet they are going to testify that they don’t remember anything in order to avoid being sued.

Thus the reason for the ABSOLUTE litigation privilege. If you allow anyone to be sued for what they say in conjunction with a lawsuit, the system would fall apart. Every action would spawn many more, and the courts would be unable to keep up. No one would be willing to testify, so cases would often be impossible to prove.

The frustration of the callers is understandable, especially when they have proof that the statements were false. They understand generally the reasons for the litigation privilege, but feel that there must be an exception when there is irrefutable proof that the other side knowingly make false statements. But consider that for a moment. If there was an “I have absolute proof that the witness knew he was lying” exception, how would that work? That exception would defeat the rule, because then anyone could file an action claiming to be in possession of such proof. The action would still have to be litigated in order to look at the proof.

The only “exception” is that the statements have to made in furtherance of litigation. Anything said in court or in a court document is obviously privileged, but so too are the statements by the attorney when he contacted potential witnesses.

Collateral Actions Accomplish Nothing.

Before you rail against this necessary public policy, claiming that there should be a consequence for lying, understand also that it really doesn’t make much difference. Here is why.

A caller will tell me that during divorce proceedings, his wife lied about him abusing the children, and as a result he got limited visitation. He wants to sue for defamation for all the lies about the abuse.

But wait a minute. “Didn’t you explain during the divorce proceedings that you did not abuse the children?”, I ask.

“Yes, and all my family members testified that I was a wonderful father who never hit my children, the children testified that I never hit them, and we had an expert witness, a social worker who testified that there was no indication that I ever abused the children.” But my wife testified that I did beat the children, some of her friends testified that long before the divorce she had told them about me beating the children, and her expert witness testified that the behavior of the children was indicative of abuse by the father. For whatever reason, the judge believed her witnesses and not my witnesses.”

“OK, so with every opportunity to tell your side of the case, the judge did not believe you and you lost. Why would the result be different in a new case?”

“Well I have more witnesses, and she introduced hospital records of one of my children being taken to the hospital for a broken finger, and claimed that I broke that finger, but I can prove that I was away on business on that day.”

“Did something prevent you from introducing those travel records to the judge in the divorce action?”, I ask.

“Well, no, but it was so obvious that I did not abuse the children I didn’t think I needed to.”

So you see why a collateral action, even if permitted, would not accomplish anything. If the party could not prove their position in one court, there is no reason to believe they will have a different result in another. And if there was more evidence that could have been presented, it should have been presented in the first action. The strong public policy supporting the litigation privilege does not need to bend to give you a second bite at the apple – just put on all your evidence in the first action. If despite all your evidence the judge gets it wrong, then you should appeal from that case, not file a new one.

Be honest with yourself, and you will have to admit the real reason you want to bring a collateral action.

If the following does not apply to you, then don’t be offended. In the vast majority of cases, when someone calls wanting to sue for defamation for something said in a court document, their real motive has nothing to do with wanting to clear their name. Conceptually, it makes no sense to bring a separate action to prove the falsity of a statement made in pending litigation, for all the reasons already stated. If you didn’t abuse the children, prove it in the divorce proceeding.

Indeed, the oft-stated reason for bringing the action is because all the lies told in court are now a matter of public record, and the caller wants to clear his name. If so, then his name needs to be “cleared” in the same action, so anyone seeing that public record will see the truth. Winning in a separate action would do nothing to correct the record in that other action.

The real reason the person is calling wanting to file a separate action — one that they will often deny — is they are seeking leverage. They reason that if they can file a separate action and expose the witness or party to civil liability, or just the cost and annoyance of having to deal with the second action, that will pressure the person to alter or withdraw the testimony. That is not a proper purpose for legal action.

Does that mean you are completely without remedy?

Lying on the stand or in a declaration is perjury, which is a criminal offense. If you can prove that the person knew what they were saying was false, then by all means file a police report. The police cannot become a back-door court of appeal, deciding who was lying, so the standard remains the same. If you could not prove your point in the first action, then the lie that you claim was perjury will probably not be black and white enough for the police to pursue it.

Also, the statement is only privileged if it is made in conjunction with the litigation. That is a very broad definition. The statement does not need to be in a court document, but it must advance the litigation. That is why the attorney talking to the family members about your drinking problem was privileged. But if that same attorney calls a press conference and discusses your alleged drinking problem, you could then sue for defamation since that does nothing to advance the litigation.

A few words about limited privileges.

Thus far, I have discussed only the litigation privilege, which is absolute. There are a number of privileges, and some of them are only limited privileges. With a limited privilege, the person can be sued for defamation if it can be shown that the statement in question was made with malice. In those cases, it is not enough to show the statement was false, you must show that the person made the statement with malice or reckless disregard for the truth.

The Common Interest Privilege is the most prevalent privilege with only limited immunity. This privilege is set forth in Civil Code section 47(c), which provides:

A privileged publication or broadcast is one made: . . .

(c) In a communication, without malice, to a person interested therein, (1) by one who is also interested, or (2) by one who stands in such a relation to the person interested as to afford a reasonable ground for supposing the motive for the communication to be innocent, or (3) who is requested by the person interested to give the information. This subdivision applies to and includes a communication concerning the job performance or qualifications of an applicant for employment, based upon credible evidence, made without malice, by a current or former employer of the applicant to, and upon request of, one whom the employer reasonably believes is a prospective employer of the applicant. This subdivision authorizes a current or former employer, or the employer’s agent, to answer whether or not the employer would rehire a current or former employee. This subdivision shall not apply to a communication concerning the speech or activities of an applicant for employment if the speech or activities are constitutionally protected, or otherwise protected by Section 527.3 of the Code of Civil Procedure or any other provision of law.

As you can see, this is a very broad privilege, giving limited immunity to anyone who is speaking to another, so long as they have a good faith belief that the person to whom they are speaking is interested in the subject matter.

Note also that this section destroys the cherished belief held by many that when you look for work and your prospective employer calls for a reference, your former employer can’t say anything bad about you. Also in the employment context, this is the section that prevents you from suing an employee for telling lies about you to management (unless you can show those lies were told with malice).

Here is the actual jury instruction on the limited (also referred to as the “qualified privilege”):

1723. Qualified Privilege (Civ. Code, § 47(c))

Under the circumstances of this case, [name of plaintiff] cannot recover damages from [name of defendant], even if the statement(s) [was/were] false, unless [he/she] also proves that [name of defendant] acted with hatred or ill will toward [him/her].

If [name of defendant] acted without reasonable grounds for believing the truth of the statement(s), this is a factor you may consider in determining whether [he/she] acted with hatred or ill will toward [name of plaintiff].

Note that the jurors are specifically instructed that they cannot award damages even if the statements were false, unless the plaintiff proves that the defendant acted with malice. Thus, the burden is on the plaintiff, and that is a tough burden to meet since it involves getting into the defendant’s head.

I see this often in the sexual harassment context. A woman reports to HR that she is feeling sexually harassed by a coworker, and as a result of that report, the coworker is investigated and possibly even fired. The report by the woman is privileged because HR would certainly want to know if an employee is sexually harassing another. It may be that the coworker did something innocent like offering to get the woman a cup of coffee, but if the woman took that as sexual harassment, the fact that she was 100% wrong does not translate her reporting the incident into a malicious act, and she would be protected by the limited privilege.

Finally, note that the quantum of harm does not determine whether a defamation action exists. If the common interest privilege applies and no malice can be shown, then the fact that the false report of sexual harassment destroyed the coworker’s marriage and caused him to be fired, does not create a defamation action. Again, defamation requires an UNPRIVILEGED statement, so if the statement was privileged, then it can never be morphed into defamation no matter how much damage it caused.

* Collateral Action or Attack — A legal action to challenge a ruling in another case. For example, Joe Parent has been ordered to pay child support in a divorce case, but he then files another lawsuit trying to prove a claim that he is not the father of the child. A “direct attack” would have been to raise the issue of parenthood in the divorce action.

An Emotional Distress Claim Should Not Be Undertaken Lightly

The case of Mallard v. Progressive Choice Ins. Co. beautifully illustrates a point I discuss with all clients who want to make an emotional distress claim, while at the same time illustrating an important SLAPP rule of law.

Sometimes I will get a call from a potential client within minutes after they were fired. They want to sue for wrongful termination and they want to sue NOW!

But 15 minutes after an employee has been fired, what are the damages? When I ask the caller that question, they answer, “I was fired!” Yes, but what are your damages? “I was fired!”

Rather than to go on all day in this fashion, I explain. Damages are something you can put a dollar sign in front of. Being fired is not a damage, although obviously it can CAUSE damages. But 15 minutes after a termination, an ethical attorney should explain that there are no real damages at that point.

If the employee was making, say, $25 an hour, and they were fired two hours before their shift ended, then the damages at that moment they are calling me are $50, at least in terms of lost wages. But let’s carry it out a little. Let’s assume for our hypothetical that the employee had seen the writing on the wall and had already sent out some feelers for a new job before the axe fell. She makes a few calls, and a week later she starts a new job with the same title that pays $30 per hour with better benefits. What are her damages then?

Well, she went a week without being paid, so she lost $1,000 in wages. Her old employer should at least cut her a check for $1,000, right? But wait a second. Because of the termination, she will made $10,000 more for the year than if she hadn’t been fired. Fair’s fair. If you thought her employer should pay her for what she lost as a result of the termination, then it is only fair that she should pay to the employer the money she gained as a result of the termination, right?

I’m speaking tongue in cheek of course, but I want you to think in terms of the real damage to our terminated employee. Last week I discussed all the damages that flow from a wrongful termination, and if you look at that list, assuming our employee did not suffer any setback to her career track, then there are no real damages.

“But what about emotional distress damages?”, the caller asks. That’s a valid question. If your employer wrongfully terminated you, you might have suffered some emotional distress damages. Again, an ethical attorney then needs to explain what you open yourself up to when you claim emotional distress.

Which leads us to today’s case review.

Progressive Insurance issued an automobile insurance policy to Winly Mallard. She was involved in an auto accident, and her medical expenses exceeded the policy limits, so she proceeded under her insurance policy’s uninsured motorist claim because the driver of the other car involved in the accident did not have liability insurance.

A quick aside here. All the commercials you see with the helpful insurance agents are bull. Yes, you will be fine if you are in an accident that involves only property damages and perhaps some minor medical expenses, but if you ask for anything challenging, the insurance company will fight your coverage.

That was what happened to Winly Mallard. An attorney by the name of Rivers J. Morrell III was retained by Progressive with regard to Mallard’s claim. Morrell propounded form interrogatories to Mallard on Progressive’s behalf. In addition to listing her injuries to her neck and back, Mallard also stated that she had difficulty sleeping, and suffered “[s]hock” and “[n]ervous anxiety.” In addition, she stated she was pursuing a claim for loss of earning capacity.

There it is. Just like a wrongfully terminated employee who wants to assert emotional distress, Mallard had put at issue her mental health. Is she having trouble sleeping because of the accident and/or injuries, or is there something else that could be troubling her? Morrell wanted to know, so her mental health records were subpoenaed from health care providers identified in her verified responses.

Understandably, Mallard felt very invaded. She filed a complaint alleging claims for invasion of privacy and abuse of process against Morrell and Progressive, based on the act of subpoenaing third parties to obtain Mallard’s mental health records. Mallard served only Morrell with the complaint.

Morrell filed an anti-SLAPP motion to strike the complaint, which was opposed by Mallard. The trial court granted the anti-SLAPP motion and ordered the complaint dismissed with prejudice as to both defendants. Mallard appealed.

The trial court granted Morrell’s motion for attorney fees and costs, awarding him $13,756.64 in attorney fees and costs under section 425.16, subdivision (c). Mallard appealed, but the Court of Appeal agreed that the action against the attorney was a SLAPP, and upheld the judgment.

Morals of this story: A determination of an insured’s uninsured motorist coverage is always by way of an arbitration. Apparently Mallard’s attorney thought that an arbitration would not fall under the right of redress aspect of the anti-SLAPP statute, but he was wrong. As I discussed here, the standard is very broad – even a trial in Zimbabwe is considered an official proceeding.

Second, clients must be made aware that making an emotional distress claim leaves them open to very intrusive questions and discovery. That does not by any means mean that it is never appropriate to assert such a claim, but it should only be done after much consideration.

Aaron Morris, Attorney
Aaron Morris
Morris & Stone, LLP

Tustin Financial Plaza
17852 17th St., Suite 201
Tustin, CA 92780

(714) 954-0700

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