What California’s anti-SLAPP law can teach the country about free speech
The recent dust-up between Zenefits, a hungry and innovative startup, and ADP, an old-school success story and the giant of the payroll processing industry, is now playing out in the courts. The problem Zenefits faces is one shared by other emerging and small companies nationwide that confront ruin through strategically filed, anti-competition court cases.
ADP’s suit against Zenefits stems from comments made by Zenefits CEO Parker Conrad. Filed in the U.S. District Court for the Northern District of California, ADP alleges that Conrad made defamatory remarks about ADP following that company’s decision to limit the extent to which Zenefits could access its client information.
In many other states, this might mean the larger firm would be able to use a lawsuit like this to drive the smaller company to comply with its demands, or even force it out of business altogether, simply with the threat of having to mount a costly legal defense. In California, the smaller player has recourse. ADP’s decision to file suit in California has left it vulnerable to the state’s anti-SLAPP (Strategic Lawsuits against Public Participation) statute.
Anti-SLAPP motions are rooted in the First Amendment’s protection of free speech and are designed to prevent intimidation through litigation. In relevant part, California’s statute reads:
A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.
Zenefits’ anti-SLAPP motion is based on the contention that Conrad’s comments are a subject of public interest. Using a lawsuit to stifle his speech would have a deleterious impact on civil discourse. If Zenefits’ motion succeeds, ADP’s suit will be tossed from court before the costly discovery process can begin.
Whether or not Zenefits succeeds with its motion, laws preventing powerful would-be litigants from using the courts effectively to censor speech that makes them uncomfortable are a good idea. California was one of the first states in the nation to adopt an anti-SLAPP statute, which first was passed in 1971. Since then, 28 states have chosen to adopt anti-SLAPP laws in some form or another.
In spite of broad adoption of anti-SLAPP statutes, the federal government has yet to embrace one of its own. This means that defendants across the nation are without this powerful tool to protect their speech. Fortunately, that could change this year.
Reps. Blake Farenthold, R–Texas, and Anna Eshoo, D-Calif., have introduced the extravagantly named SPEAK FREE Act. Not only would this legislation provide defendants with an opportunity to forego ruinous litigation, it also includes a fee-shifting provision that apportions the cost of litigation deemed to be a “SLAPP” suit to the plaintiff. Thus, not only would it protect free speech, but the bill also remove incentives for SLAPP suits.
In the context of a fast-moving “new” economy, one in which incumbent industries quickly are disrupted by new business models, the necessity of expanding access to anti-SLAPP motions is greater than ever. If California, in spite of its worst impulses, can recognize this, why can’t an enterprise-minded Congress?
Whether or not SPEAK FREE becomes law, California and a number of other states will still offer some organizations a legal framework that can be used to force competition out of the courts and back into the marketplace, where it belongs.