Employment Law Case Alert: Non-Disparagement Clause Unenforceable as to Statements Protected by California’s Anti-SLAPP Statute

Non-disparagement clauses are commonly used in settlement agreements in several types of cases, including employment matters. Such provisions are generally viewed as fostering resolution of disputes. However, the enforceability of those non-disparagement terms may depend on the context in which the disparaging statements are made. The Court of Appeal recently illustrated the complexity of the issue in Vivian v. Labrucherie et al., No. A133167, filed March 8, 2013 (Vivian).

The Court held a motion to strike brought under Code of Civil Procedure section 425.16 (California’s Anti-SLAPP statute) should be granted as to a breach of contract claim where the conduct alleged included disparaging statements made during an employee’s internal affairs investigation and the employee’s pending family law action.

Vivian arose from an acrimonious divorce. Plaintiff was a deputy sheriff against whom his ex-wife’s boyfriend sought a restraining order in a prior action. The restraining order proceeding was resolved and plaintiff entered a settlement agreement that was also executed by his ex-wife. The settlement included terms providing that both parties would refrain from disparaging each other. Plaintiff subsequently filed a separate lawsuit, alleging his ex-wife breached the settlement agreement when she voluntarily made disparaging statements to internal affairs investigators from the sheriff’s department after entering the settlement agreement. Plaintiff also alleged his ex-wife filed papers in family court which repeated allegations in the restraining order application. The ex-wife brought an anti-SLAPP motion to strike the breach of contract claim. The trial court denied the motion.

The Court of Appeal reversed, reasoning that the ex-wife’s statements to internal affairs investigators and statements made in the family law proceeding were protected activity within the scope of section 425.16. The court further determined that there had been no waiver of the protections of section 425.16 because the alleged conduct was subject to the litigation privilege. Emphasizing the public policies underlying the privilege, the court concluded application of the privilege under these circumstances would promote full and candid responses to public agencies. As such, the court held the litigation privilege applied and the breach of contract claim should have been stricken by the trial court.

Vivian provides insight as to the efficacy of non-disparagement clauses often found in settlement agreements. As this case shows, enforcement of such provisions is dubious where potentially disparaging statements qualify as protected activity.

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March 13, 2013