Stark 2, LLC v. Austin Barton

will prevail on the claim.” (Code Civ. Proc., § 425.16, subd. (b)(1); Olson v. Doe (2022) 12 Cal.5th 669, 678)

“The moving party ‘must establish that the challenged claim arises from activity protected by section 425.16’; if the moving party does so, ‘the burden shifts’ to the nonmoving party ‘to demonstrate the merit of the claim by establishing a probability of success.’ [Citation.]” (Olson, supra, 12 Cal.5th at p. 678; Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 884.) “To succeed in opposing a special motion to strike, the nonmoving party must ‘demonstrate both that the claim is legally sufficient and that there is sufficient evidence to establish a prima facie case with respect to the claim.’ [Citation.] ‘[C]laims with the requisite minimal merit may proceed.’ [Citation.]

The moving party prevails by ‘defeat[ing]’ the ‘claim as a matter of law’ [citation] in ‘a summaryjudgment-like procedure’ [citation].” (Olson, supra, 12 Cal.5th at p. 679; Wilson, supra, 7 Cal.5th at 884.) “If the plaintiff fails to meet that burden, the court will strike the claim.” (Wilson, supra, 7 Cal.5th at p. 884.)

Protected Conduct

“At the first step, the moving defendant bears the burden of identifying all allegations of protected activity, and the claims for relief supported by them. When relief is sought based on allegations of both protected and unprotected activity, the unprotected activity is disregarded at this stage. If the court determines that relief is sought based on allegations arising from activity protected by the statute, the second step is reached. There, the burden shifts to the plaintiff to demonstrate that each challenged claim based on protected activity is legally sufficient and factually substantiated.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 396).

At this first step, courts are to “consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability.” (Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1009). “The defendant's burden is to identify what acts each challenged claim rests on and to show how those acts are protected under a statutorily defined category of protected activity.” (Id.) “If a cause of action contains multiple claims and a moving party fails to identify how the speech or conduct underlying some of those claims is protected activity, it will not carry its first-step burden as to those claims ... [t]he nonmovant is not faced with the burden of having to make the moving party's case for it.” (Bonni, supra at 1011; accord, Park v.

Nazari (2023) 93 Cal.App.5th 1099, 1108, citing Bonni, supra, 11 Cal.5th 995 at 1011.)

There are four categories of protected speech for an anti-SLAPP motion (Code Civ. Proc. § 425.16(e)). Defendant contends that the conduct alleged in the complaint is protected under Code Civ. Proc. § 425.16, subd. (e)(2), which provides:

“(e) As used in this section, ‘act in furtherance of a person's right of petition or free speech under the United States or California Constitution in connection with a public issue” includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law ... .’”

“The anti-SLAPP protection for petitioning activities applies not only to the filing of lawsuits, but extends to conduct that relates to such litigation, including statements made in connection with or in preparation of litigation ... Indeed, courts have adopted ‘a fairly expansive view of what constitutes litigation-related activities within the scope of section 425.16.” (Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal. App.4th 1532, 1537 [Citations omitted].)

“[J]ust as communications preparatory to or in anticipation of the bringing of an action or other official proceeding are within the protection of the litigation privilege of Civil Code section 47, subdivision (b) [citation], ... such statements are equally entitled to the benefits of section 425.16.” (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1115 [internal citations omitted]). “[A] statement is ‘in connection with’ litigation under section 425.16, subdivision (e)(2) if it relates to the substantive issues in the litigation and is directed to persons having some interest in the litigation.” (Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, 1266).

Furthermore, Code Civ. Proc. § 425.16, subd. (e)(2) “has been held to protect statements to persons who are not parties or potential parties to litigation, provided such statements are made ‘in connection with’ pending or anticipated litigation.” (Summerfield v. Randolph (2011) 201 Cal.App.4th 127, 136).

Defendant requests judicial notice of a class action and Private Attorney General Act (PAGA) lawsuit against Stark 2, captioned Refe v. Stark 2 LLC, et al., L.A.S.C. case no. 22STCV29855, which was filed on 9/13/22. Defendant established that Defendant Barton is a class member of this class action. (See RJN, Ex. F [definition of class members]). The causes of action in the Refe class action include the following: Failure to Pay Overtime Compensation; Failure to Provide Meal Periods; Failure to Authorize and Permit Rest Periods; Failure to Pay Minimum and Regular Rate Wages; Failure to Timely Pay Final Wages at Termination; Failure to Provide Accurate Itemized Wage Statements; Failure to Reimburse Business Expenses; Unfair Business Practices and Civil Penalties Under PAGA. (RJN, Ex. A).

Defendant contends that the following allegations in the Complaint concern protective activity as they constitute oral statements made in connection with the issues in the Refe class action: Defendant telling coaches and students that Plaintiff did not treat its people right and that management failed to appreciate employees, creating division and prompting additional resignations (Compl., ¶ 9); Defendant repeatedly voiced grievances regarding compensation, bonuses, and management to other employees, students and clients of Plaintiff, including making claims that Plaintiff did not appreciate its people and unfairly reduced Defendant’s pay; (Compl., ¶ 13); and each first paragraph under each cause of action which incorporates these allegations into each cause of action. (Compl., ¶¶ 14, 19, 24, 28, and 31).

With regards to Plaintiff’s grievances about pay and management, Defendant Barton submits his declaration in support of his argument that these statements were made in connection with the issues in the Refe class action:

“During my employment with Stark, I did not receive lunch breaks and was not paid an extra hour of pay for each day I was not able to take an uninterrupted and/or timely lunch break.” (Decl. of Barton, ¶ 4). “During my employment with Stark, due to my workload, I was also prevented from taking any rest breaks during my shifts. Stark never paid me extra hour of pay for each day I was not able to take a rest break.” (Decl. of Barton, ¶ 5). “Even while I was physically on Stark’s property completing work tasks throughout the workday, Stark instructed me to only clock in when I was directly assisting clients in their scheduled sessions. As a result, I started noticing that my hours were short on my paystubs and that I was not being paid for all of my work, nor was I being paid overtime correctly.” (Decl. of Barton, ¶ 6). “I complained multiple times to my manager, Brian

Molina (‘Molina’), about not getting paid for all of my work and not being getting my breaks, but my complaints fell on deaf ears.” (Decl. of Barton, ¶ 7). “Towards the end of my employment, Stark fired multiple trainers. Because I had been expressing concerns about not being paid properly, I was worried that I would be the next trainer to be fired. Around this time, Stark changed their payment structure which upset clients as well as me and the other trainers. While working, I would at times discuss my frustrations regarding my pay with other coaches and trainers ... .” (Decl. of Barton, ¶ 8).

In support of his contention that his complaints are protected, Defendant cites to Contemporary Services Corp. v. Staff Pro Inc. (2007) 152 Cal.App.4th 1043, where the court held that the Defendant’s president’s email to customers relating to the underlying litigation was considered protected conduct under Section 425.16, subd. (e)(2): “Meredith's e-mail, on the other hand, constitutes a litigation update, which describes the parties' contentions and court rulings, and is directed to individuals who had some involvement in the parties' litigation.” (Id. at 1055).

The court finds that Defendant’s statements/grievances regarding pay, compensation and management relate to the subject matter of the Refe class action.

However, the court agrees with Plaintiff that the following alleged conduct in the Complaint is not protected conduct: While still employed by Plaintiff and using company time and resources, Defendant began soliciting Plaintiff’s students and clients to follow him to a competing business. Specifically, on or about July 2, 2024, Defendant discussed his planned departure with students in, on and about Plaintiff’s facility, leading to the departure of multiple clients, including Gilbert Simas and his family. (Compl., ¶ 7); Defendant made false statements to staff members that he had been terminated by Plaintiff, when in fact he voluntarily resigned. (Compl., ¶ 8); Defendant breached the contract by using company time to solicit Plaintiff’s clients and employees (Compl., ¶ 17); Defendant knew of Plaintiffs’ contracts and intentionally and unjustifiably interfered with them by soliciting clients and employees to leave Plaintiff and join him elsewhere; Defendant’s conduct, including solicitation of clients during employment, misuse of confidential information, and dissemination of false statements [that Defendant was terminated], constitutes unlawful, unfair, and fraudulent business practices (Compl., ¶ 29); and Defendant misappropriated such trade secrets by using and disclosing them to solicit Plaintiff’s clients and benefit a competing enterprise. (Compl., ¶ 33).

The court must now determine which cause of action is actually based on protected activity. Defendant contends that all five causes of action are based on the protected activity because each cause of action “incorporates” all preceding allegations by reference. However, “[a]ssertions that are ‘merely incidental’ or ‘collateral’ are not subject to section 425.16.” (Baral, supra, 1 Cal.5th at 394). “Allegations of protected activity that merely provide context, without supporting a claim for recovery, cannot be stricken under the anti-SLAPP statute.” (Id.).

1st Cause of Action for Breach of Contract

The court finds that this cause of action is based on both protected conduct and unprotected conduct based on the allegations in the complaint: “Defendant breached the contract by using company time to solicit Plaintiff’s clients and employees, and by making disparaging statements harming Plaintiff’s business.” (Compl., ¶ 17). Therefore, the court moves on to the second step of the analysis, where “the burden shifts to the plaintiff to demonstrate that each challenged claim based on protected activity is legally sufficient and factually substantiated.” (Baral, supra, 1 Cal.5th at 396).

Defendant contends that each cause of action fails because Defendant’s comments are cloaked with Civ. Code § 47, subd. (b)’s litigation privilege.

Subdivision (b) of Section 47 bars a civil action for damages for communications made “[i]n any (1) legislative proceeding, (2) judicial proceeding, (3) in any other official proceeding authorized by law, or (4) in the initiation or course of any other proceeding authorized by law . . . .” This privilege applies to any communication and to all torts except malicious prosecution, and applies to any publication permitted by law in the course of a judicial proceeding to achieve the objects of the litigation, even if the publication is made outside the courtroom and no function or its officers is involved. (Silberg v.

Anderson (1990) 50 Cal.3d 205, 212.) “The privilege is based on ‘[t]he importance of providing to citizens free and open access to governmental agencies for the reporting of suspected illegal activity.’” (Wise v. Thrifty Payless, Inc. (2000) 83 Cal.App.4th 1296, 1303 [internal citations omitted]).

The privilege is “absolute.’ (Hagberg v. California Federal Bank (2004) 32 Cal.4th 350, 360.)

In Silberg v. Anderson (1990) 50 Cal.3d 205, the California Supreme Court set forth the four elements must be met for conduct to fall

within the immunity of section 47(b). The allegedly wrongful communication must be:

(1) made in a judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objectives of the [proceeding]; and (4) [have] some connection or logical relation to the action.”

(Id. at p. 212.) “To effectuate its vital purposes, the litigation privilege is held to be absolute in nature.” (Id. at p. 215.) It would be irrelevant whether Defendants’ communication were malicious or even criminal in the underlying actions. (Id.) The privilege “is not limited to statements made during a trial or other proceedings, but may extend to steps taken prior thereto, or afterwards.” (Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1241).

“A plaintiff cannot establish a probability of prevailing if the litigation privilege precludes the defendant's liability on the claim.” (MMM Holdings, Inc. v. Reich (2018) 21 Cal.App.5th 167, 183).

Plaintiff contends that the alleged conduct was not a court filing, testimony, communication with counsel, or litigation step in Refe, but rather client solicitation, diversion, misuse of confidential information, and false termination statements that were all private commercial acts.

“ ‘When evaluating an affirmative defense in connection with the second prong of the analysis of an anti-SLAPP motion, the court, following the summary-judgment-like rubric, generally should consider whether the defendant’s evidence in support of an affirmative defense is sufficient, and if so, whether the plaintiff has introduced contrary evidence, which, if accepted, would negate the defense.’ [Citations.] As the California Supreme Court noted in addressing the litigation privilege as a defense to civil extortion and other claims in the context of anti-SLAPP litigation, ‘[t]he litigation privilege is also relevant to the second step in the anti-SLAPP analysis in that it may present a substantive defense a plaintiff must overcome to demonstrate a probability of prevailing.’ [Citation.]” (Paredes v. Credit Consulting Services, Inc. (2022) 82 Cal.App.5th 410, 438.)

With regards to Defendant’s statements,“[t]he communication must ‘function as a necessary or useful step in the litigation process and must serve its purposes.’ [Citation.] The test ‘cannot be satisfied by communications which only serve interests that happen to parallel or

complement a party's interests in the litigation,’ including vindication in the court of public opinion. [Citation.] Instead, the ‘connection or logical relation’ prong of the test ‘can be satisfied only by communications which function intrinsically, and apart from any consideration of the speaker's intent, to advance a litigant's case.’” (City of Costa Mesa v. D'Alessio Investments, LLC (2013) 214 Cal.App.4th 358, 382).

Defendant presented evidence that there was a class action against Plaintiff over various wage and hour claims, which commenced in 2022 and was not settled until 1/21/26, when the trial court granted the motion approving the settlement. (RJN, exs. A and J). Defendant was employed by Plaintiff until June 2024. (Compl., ¶ 6). Plaintiff alleges that in the weeks preceding Defendant’s resignation, Defendant voiced his grievances about compensation, bonuses, and management to other employees, students and clients of Plaintiff, including making claims that Plaintiff did not appreciate its people and unfairly reduced Defendant’s pay. (Compl., ¶ 13). At the time he allegedly made these comments (weeks before his resignation), litigation against Plaintiff was ongoing.

Defendant presented evidence that he was a class member/participant, as were his coworkers. He presented evidence that his grievances included not being paid for all hours worked, not being paid for overtime correctly, and not getting breaks. (Decl. of Barton, ¶¶ 4-7). He presented evidence that he made statements about his frustration and grievances over his pay to coworkers, whom he believed felt similarly.

Because Defendant was a class member in an employment class action suit, and his discussions with other coworkers related to compensation and management, Defendant has presented sufficient evidence in support of the litigation privilege with regards to his comments to other coworkers.

However, Defendant does not present evidence in support of the assertion that such comments to clients function as a necessary or useful step in the litigation process. Defendant did not provide any evidence suggesting that any of his discussions with clients were a part of investigation or otherwise necessary to the litigation. Accordingly, the litigation privilege does not apply to such conduct. Therefore, the next inquiry is whether Plaintiff met its burden of establishing that each challenged claim based on protected activity is legally sufficient and factually substantiated.

The elements for breach of contract are as follows: (1) the existence of the contract, (2) plaintiffs’ performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821).

Plaintiff provides a copy of Employment Confidentiality and Inventions Agreement between Plaintiff and Defendant. (Decl. of Vande Hei, ¶¶ 4-5 & Ex. A.) Plaintiff also provides evidence that it treats its client information as confidential. (Decl. of Vande Hei, ¶ 6).

Mr. Vande Hei also declares: “Based on my review of those records, Stark had active client and/or student relationships with Gilbert Simas and/or members of his family before Barton’s separation, and one or more of those relationships ended or decreased around the time Barton left Stark. I understand additional discovery will be needed to determine the full scope of Barton’s client facing communications and the complete amount of Stark’s resulting damages.” (Decl. of Vande Hei, ¶ 11).

However, none of this suggests breach of the Confidentiality provision. There is no evidence of breach. While Plaintiff argues that more discovery is needed, the court must reject this argument, as Plaintiff did not move for limited discovery pursuant to Code Civ. Proc. §425.16, subd. (g). Accordingly, Plaintiff failed to meet its burden.

2nd Cause of Action for Tortious Interference with Contract

The court finds that this cause of action is based on both protected conduct and unprotected conduct based on the allegations in the complaint: “Defendant knew of these contracts and intentionally and unjustifiably interfered with them by soliciting clients and employees to leave Plaintiff and join him elsewhere.” (Compl., ¶ 21) “Defendant’s interference caused actual breaches of those contracts, including the departure of students and associated financial losses.” (Compl., ¶ 22). Paragraph 22 ties Plaintiff’s losses to not just the departure of clients, but the departure of students as well. Plaintiff previously alleged that it lost students because of Defendant’s disparaging statements, which included protected statements. (Compl., ¶ 13).

“To prevail on a cause of action for intentional interference with contractual relations, a plaintiff must plead and prove (1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant's knowledge of that contract; (3) the defendant's

intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148).

Once again, Plaintiff failed to present any evidence of Defendant’s actions whatsoever, other than that Defendant became disengaged from team operations and internal communications. (Decl. of Vande Hei, ¶ 9). Evidence that a client’s relationship ended “or decreased” after Defendant’s departure does not, alone, suggest intentional interference by Defendant. Accordingly, Plaintiff failed to meet this burden.

3rd Cause of Action for Defamation

The court finds that this cause of action is based on both protected conduct and unprotected conduct based on the allegations in the complaint: “Defendant made false statements to third parties, including staff and clients, asserting that he had been terminated by Plaintiff and that Plaintiff mistreated its employees.” (Compl., ¶ 25).

The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage. (Taus v Loftus (2007) 40 Cal.4th 683, 720).

Here, Plaintiff presents evidence that it did not terminate Defendant, and that he resigned. (Decl. of Molina, ¶¶ 3-5). However, Plaintiff failed to present any evidence suggesting that Defendant published a statement regarding his termination, or any other statement, in the first instance. Plaintiff’s evidence only suggests that Defendant became disengaged from team operations and internal communications, and Plaintiff’s relationship with Gilbert Simas and/or members of his family ended or decreased after Defendant’s departure. Accordingly, Plaintiff failed to meet its burden.

4th Cause of Action for Unfair Competition

The court finds that this cause of action is based on both protected conduct and unprotected conduct based on the allegations in the complaint: “Defendant’s conduct, including solicitation of clients during employment, misuse of confidential information, and dissemination of false statements, constitutes unlawful, unfair, and fraudulent business practices.” (Compl., ¶ 29).

Business and Professions Code section 17200 prohibits “unfair competition,” which is defined to include “any unlawful, unfair or fraudulent business act or practice” and “unfair, deceptive, untrue or misleading advertising” and any act prohibited by Bus. & Prof. Code § 17500. Causes of actions based on “unlawful” conduct may be based on violations of other statutes. (See Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1383.)

Once again, Plaintiff failed to present any evidence of any wrongful actions whatsoever. Accordingly, Plaintiff failed to meet this burden.

5th Cause of Action for Misappropriation of Trade Secrets

The court finds that this cause of action is not based on any protected conduct. While the fifth cause of action for misappropriation of trade secrets contains an allegation which reads “Plaintiff re-alleges and incorporates by reference each and every preceding paragraph”, it is clear from this cause of action that it is based solely on unprotected conduct: “Plaintiff maintained confidential and proprietary client information and lists constituting trade secrets under Civil Code §3426.1(d).” (Compl., ¶ 32). “Defendant misappropriated such trade secrets by using and disclosing them to solicit Plaintiff’s clients and benefit a competing enterprise.” (Compl., ¶ 33). Therefore, Defendant has not established its burden as to the fifth cause of action.

Accordingly, the court strikes the following:

Paragraph 9 of the Complaint; Paragraph 13 of the Complaint; The following from Paragraph 17 of the Complaint: “and by making disparaging statements harming Plaintiff’s business”; and The following from Paragraph 25 of the Complaint: “and that Plaintiff mistreated its employees”.

Finally, Defendant is granted attorneys’ fees in the reduced amount of $10,215.

Defendant shall give notice.