Employer’s Malicious Prosecution Claim Subject to Anti-SLAPP

  Unemployment Insurance Code section 1960 provides that any finding, judgment, or final order of the Unemployment Insurance Appeals Board shall not be used as evidence in any separate or subsequent action or proceeding between an employee and present or prior employer.

  In  Kurz v. Syrus Systems the Court of Appeals held that section 1960 operated as a bar to the maintenance of a cause of action for malicious prosecution in a cross-complaint Kurz’s prior employer asserted against Kurz. The offending cause of action alleged that Kurz had maliciously prosecuted a meritless claim for unemployment insurance benefits that terminated in Syrus’s favor when the claim was denied and the denial was upheld on appeal by a decision of the Board.

  The court determined that Kurz’s special motion to strike the malicious prosecution cause of action in the cross-complaint pursuant to Code of Civil Procedure section 425.16, commonly known as the the anti-SLAPP statute, should have been granted. SLAPP is an acronym for “strategic lawsuit against public participation.” Section 425.16 provides that a cause of action arising from constitutionally protected speech or petitioning activity is subject to a special motion to strike unless the plaintiff (or cross-complainant) establishes a probability of prevailing on the claim.

  To prevail on a malicious prosecution claim, the plaintiff must show that the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination favorable to the plaintiff; (2) was brought without probable cause; and (3) was initiated with malice.

  Thus, in a malicious prosecution action, plaintiff must plead and prove that a prior judicial proceeding terminated in his favor. Since Unemployment Insurance Code section 1960 imposes a blanket prohibition on the use of a finding or decision of the Board as evidence in a subsequent action between an individual and his or her prior employer, Syrus could not use the decision of the Board as evidence to prove the favorable termination element of the malicious prosecution cause of action in its cross-complaint.

  Absent evidence that the proceedings before the Board terminated in its favor, Syrus cannot meet its burden to demonstrate the probability of prevailing on the cause of action for malicious prosecution. Accordingly the trial court was ordered to grant Kurz’s special motion to strike and to determine the sum Syrus should pay to Kurz as reasonable attorney fees for prevailing on the motion.

  Michael Daymude consults with clients and accepts cases involving claims of malicious prosecution, including cases where such claims are subject to an anti-SLAPP motion. For other types of cases accepted, please scroll the Home and My Practice pages. If you are seeking a legal consultation or representation, call Michael at 818.971.9409.

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