Developments of Interest

New Cases of Interest - April 25, 2017

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Sheley v. Harrop (2017) 9 Cal.App.5th 1147.  This is a SLAPP action.  A minority shareholder brought a claim for intentional infliction of emotional distress, breach of fiduciary duty, conversion and negligence against majority shareholders.  The majority shareholders filed a SLAPP motion.  The Court of Appeal held that the claims for fiduciary duty, conversion and negligence all arose from protected activity to the extent that the claims alleged the filing and maintenance of a frivolous lawsuit against the minority shareholder supported claims for recovery and the minority shareholder would have to establish the assertion that the underlying lawsuit was frivolous, which the minority shareholder could not show a probability of prevailing on the merits on.

Farrar v. Direct Commerce, Inc. (2017) 9 Cal.App.5th 1257.  This case involved an arbitration provision in a six-page offer letter to an employee.  The arbitration provision was set off by the same kind of an underlined heading and spacing as other paragraphs in the offer letter.  The employer sought to compel arbitration pursuant to this provision.  The Court found that while the arbitration was adhesive, heightened scrutiny was not warranted because there was no evidence of oppression or sham practices on the part of the employer.  The employee could not reasonably claim surprise with respect to the arbitration provision.  The arbitration provision referenced a confidentiality agreement which the employee had an opportunity to obtain.  Although the arbitration provision was one-sided as excluding any claims arising from the confidentiality agreement the employee also signed, the Court concluded that this issue was severable without invalidating the entire arbitration provision.

Charney v. Standard General, L.P. (2017) 10 Cal.App.5th 149.  Another SLAPP case.  Plaintiff filed a defamation complaint that arose from a press release stating that an independent third party had conducted an investigation prior to an executive's termination.  The SLAPP motion was granted with the Court noting that the plaintiff, a former executive employee, had not shown a probability of prevailing on the merits.  The press release expressed an opinion or a subjective judgment regarding the independent nature of the investigation and did not set forth any facts about the executive.  The press release also did not state the underlying reasons for the termination decision and did not suggest that the conduct of the employee had violated any particular standards.

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