Employer’s Retaliatory Suit

Thrown out of Court

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Anti-SLAPP law extends to

Former Officer’s Wage Claim

            In Hytel Group Inc. v. Butler, __IllApp3rd__, 31 IER Cases 859 (2nd Dist. 2010), the employer hired Michelle Butler as comptroller in February 2008.  Four months later Hytel’s lender sued on a default of its loan, seeking the appointment of a receiver.  Six days after the lender brought suit Hytel fired Butler.  On August 3, 2008 filed a wage claim with the Illinois Department of Labor, seeking around $2,300 in final wages.

            In December 2008 Hytel sued Butler, alleging a breach of her fiduciary duty as comptroller for her failure to provide a year-end financial statement for the year 2007 and interim monthly financial statements thereafter.  A second count of the Hytel complaint alleged that Butler had fraudulently led Hytel management to believe that she was preparing these statements.  Hytel sought $1,000,000 in compensatory damages and $3,000,000 in punitive damages.  Butler moved to dismiss, and one of her theories was that Hytel was retaliating against her for pursuing a wage claim.

            Butler invoked the Citizen Participation Act, 735 ILCS 110/1 (the “Act”), an Illinois statute enacted in 2007 that prohibits “SLAPPs”, i.e., Strategic Lawsuits Against Public Participation.   The law (one of many in the United States at the state level) was prompted by the practice of developers suing citizen groups who voiced objections to local government about a proposed project.  The Hytel court observed that typically the purpose of the strategic lawsuit was not to prevail on the merits but to silence the citizen groups, and this was the impetus for the Act.

            Because of this legislative background Hytel argued in the trial court that the motion to dismiss was groundless.  After all, Butler had filed a private claim for wages, not a public protest of concern to other citizens.

            The trial court granted the motion to dismiss and the appellate court affirmed.  “The scope of the Act is expressed in broad terms,” the court wrote, “protecting ‘acts in furtherance of the constitutional rights to petition, speech, association, and participation in government.’”  Butler’s wage claim “was an exercise of her right to petition for redress of grievances” and fell within this broad legislative purpose.  Furthermore, since the prompt payment of wages is a matter of public concern, her claim was not entirely private.

            Hytel also argued that Butler’s breaches of her duty to prepare financial statements were not immunized from liability under the Act, pointing to Section 20(c) of the Act (“The court shall grant the motion and dismiss the [SLAPP] unless the court finds that the responding party has produced clear and convincing evidence that the acts of the moving party are not immunized from…liability by this Act”.  Butler countered that “the acts of the moving party” meant her acts of seeking unpaid wages, not the acts alleged in Hytel’s complaint against her.  The court took her side, but held that trial courts must conduct a thorough analysis of the purportedly retaliatory claim to assure that Section 20 was followed.  Here, the trial court had done that, and noted that the very large damages sought were grossly out of proportion to the alleged breaches of fiduciary duty and were calculated to intimidate Butler.

            An additional argument, that the Act was unconstitutional, was raised only on appeal and therefore rejected.

            One lesson of this case is that any suit against a wage claim filer must be well-grounded in facts and bear none of the indications of retaliatory motive

 

2/24/2011