Four Things Every Employer Needs to Know about Texas’s Anti-SLAPP Law

In 2011, Texas Governor Rick Perry signed into law the Texas Citizens Participation Act (the “TCPA”). The TCPA is Texas’s version of a category of laws, now on the books in many states across the country, intended to curb “strategic lawsuits against public participation” (so-called “Anti-SLAPP statutes”)—in other words, lawsuits that weaponize litigation to chill or retaliate against the exercise of free speech.

So what does the TCPA have to do with litigating employment disputes? Potentially, a lot—at least according to the Texas Supreme Court and other Texas courts interpreting the TCPA. Lawyers on both sides of the employment bar are becoming increasingly savvy about using the TCPA as a powerful tool in litigation, and employers must as a result learn about Texas’s Anti-SLAPP statute and keep it in mind when defending or prosecuting employment-related claims.

Here are five things every employer should know about the TCPA:

No. 1: The TCPA was enacted to safeguard Texans’ First Amendment rights.

Under the TCPA, a defendant may, within 60 days after it is served with a lawsuit, file a motion to dismiss if the claims asserted by the plaintiff in the lawsuit are based on, relate to, or are asserted in response to the defendant’s “exercise of the right of free speech, right to petition, or right of association.” One of the authors of the statute has described its purpose as “protect[ing] the little guy, promot[ing] judicial economy, provid[ing] for tort reform and advanc[ing] the First Amendment rights of all Texas citizens.” In other words, the TCPA empowers Texas courts to summarily dismiss lawsuits filed in order to prevent or punish the exercise of speech rights. Two key proponents of the law explain its purpose this way:

“By removing the threat of abusive litigation as a weapon in the battle for public opinion, the TCPA re-levels the playing field. It penalizes the deceitful player who uses the courtroom to silence a critic who is telling the truth.”

No. 2: Courts interpreting the TCPA have found that its language is broad enough to apply in employment cases (even cases that don’t involve traditional First Amendment issues).

 Given the TCPA’s purpose, most would assume that it has no application in other than the most unusual employment disputes involving private employers. But Texas courts have construed the law otherwise. In a pair of key decisions, the Texas Supreme Court demonstrated that it will interpret the TCPA according to its plain language as broadly protecting speech, even speech that does not implicate traditional constitutional protections.

In ExxonMobil Pipeline v. Coleman, 512 S.W.3d 895 (Tex. 2017), a former employee of Exxon sued for defamation, alleging that Exxon discharged him based on a wrongful accusation that he falsified records relating to the measurement of hydrocarbons in a storage tank. Exxon moved to dismiss under the TCPA, arguing that its communications about the falsified records implicated a matter of “public concern,” i.e., “an issue related to: health or safety … [or] environmental, economic, or community well-being ….” The former employee countered that this could not be the case since the “speech” in issue was an internal communication regarding a personnel issue. The Supreme Court sided with Exxon, relying heavily on its earlier decision in Lippincott v. Wisenhut, 462 S.W.3d 507 (Tex. 2015). There, the Court ruled that the TCPA applies to communications made about a matter of public concern without regard to whether the communications are made publicly. In reaching its conclusion in Coleman, the Court criticized the court of appeals below for suggesting that the TCPA does not apply unless the communications in issue have more than a “tangential relationship” to matters of public concern and found no such requirement in the plain language of the statute.

Based on Coleman and Lippincott, and because the work of almost all employers touches on matters of “public concern” as the term is broadly defined in the statute, it appears that even garden variety wrongful discharge claims may implicate the TCPA despite the fact that such claims have little or no connection to the use of the courtroom to prevent or punish the exercise of traditional speech rights.

No. 3: TCPA motions to dismiss are routinely being filed in response to unfair competition claims asserted by employers.

Among the speech rights the TCPA is designed to protect is the right to associate freely. And based on a strictly textual interpretation of the statute, the Texas Third Court of Appeals (Austin) ruled in 2017 that the TCPA required dismissal of an unfair competition lawsuit filed by a former employer after two employees resigned to join a competitor, allegedly misappropriating trade secrets for the benefit of the competitor in the process. In reaching this conclusion, the Court reasoned that the employees who resigned were free to associate with each other and their new employer and that their disclosure of their former employer’s alleged trade secrets was a communication between individuals who were joining together to pursue common interests, falling within the TCPA’s definition of “exercise of the right of association.” Elite Auto Body, LLC v. Autocraft Bodywerks, Inc., 520 S.W.3d 191 (Tex. App.—Austin 2017).

Most unfair competition disputes involve the “right of association”—at least as the right is expansively defined by the TCPA. As a result, Elite Auto Body has resulted in a flood of TCPA motions to dismiss being filed in response to unfair competition claims including trade secret misappropriation claims and claims asserting breaches of non-compete and non-solicit agreements. Though most agree that this is likely an overstatement, some commentators and practitioners are predicting that the TCPA may undermine materially the enforceability of restrictive covenants under Texas law and fundamentally change the complexion of unfair competition litigation in the state.

No. 4: A TCPA motion to dismiss is a powerful procedural tool.  

While a detailed discussion of TCPA procedure is beyond the scope of this post, employers should be aware that the summary dismissal procedure available under statute is powerful. Most significantly:

  • In most cases, the filing of a TCPA motion stays all discovery in a case while the motion is pending or being appealed. In cases where discovery is permitted while a motion is pending, the discovery must be targeted to the issues presented by the motion.
  • So long as the defendant filing the TCPA motion can prove by a preponderance of the evidence (typically, through affidavits) that the claims in issue relate to its right of free speech, right to petition, or right of association, the burden shifts to the plaintiff to establish, by clear and specific evidence, a prima facie case for each essential element of each claim asserted. If the plaintiff cannot meet this burden, his claims must be dismissed.
  • The TCPA requires an award of defense costs to a defendant that prevails on a TCPA motion; it permits, but does not require, an award of costs and attorney’s fees to a plaintiff only if a finding is made that a TCPA motion is frivolous or is filed solely for purposes of delay.

The Bottom Line

Given the way Texas courts have interpreted the TCPA, motion practice under the statute is likely to becoming increasingly routine in employment disputes, particularly in cases in which unfair competition claims are asserted. As a result, employers must become familiar with the TCPA—both as a potential arrow in the defense-strategy quiver and as a potential obstacle to successfully prosecuting claims against current and former employees. With respect to the latter, employers must consider the TCPA before filing suit, and if the decision to file is made, be prepared to devote substantial time and money to marshaling the evidence necessary to overcome an anti-SLAPP motion.

This entry was posted in Blog and tagged , , , . Bookmark the permalink. Both comments and trackbacks are currently closed.