When Your Employer Threatens to Sue You
You filed a discrimination complaint. Your employer responded — not with an investigation but with a threat: “If you pursue this, we will sue you for defamation.” Or for breach of contract. Or for misappropriation of trade secrets. The threat is designed to make you back down. California law has a specific response to this tactic.
An employer that threatens to sue an employee for exercising legal rights — filing a complaint, consulting an attorney, cooperating with an investigation — is engaging in a form of retaliation that is both common and unlawful. The threat is not about winning a lawsuit. It is about preventing one — by making the employee believe that pursuing their claim will expose them to legal liability of their own.
The threat works on employees who do not know the law. It fails on employees who do.
The most common threats
Defamation. The employer tells the employee: “If you tell anyone what happened, we will sue you for defamation.” The implication is that the employee’s account of the discrimination — their own experience, described in their own words — is legally actionable as a false statement.
In most cases, this threat has no substance. Truth is an absolute defense to defamation. An employee who accurately describes what happened to them — in a complaint, in a conversation with an attorney, in a filing with the CRD — has not defamed anyone. And statements made in judicial or administrative proceedings are protected by the litigation privilege (Civil Code section 47(b)), which provides absolute immunity from defamation liability.
Trade secret misappropriation. The employer tells the employee: “If you leave and go to a competitor, we will sue you for taking our trade secrets.” This threat is sometimes legitimate — an employee who downloads proprietary data before departing may face a real claim. But the threat is often deployed indiscriminately, against employees who have taken nothing proprietary, as a mechanism for discouraging departure and chilling legal action.
Breach of confidentiality or NDA. The employer tells the employee: “Your NDA prohibits you from discussing anything about your employment. If you file a complaint, you will be in breach.” As discussed elsewhere in this series, NDAs cannot prevent employees from reporting unlawful conduct to government agencies, from discussing harassment or discrimination (under the Silenced No More Act), or from consulting with an attorney. A threat to enforce an NDA against protected activity is itself unlawful.
California’s anti-SLAPP statute
California’s anti-SLAPP statute (Code of Civil Procedure section 425.16) provides a powerful procedural tool for employees who are sued by their employers in retaliation for exercising legal rights.
SLAPP stands for “Strategic Lawsuit Against Public Participation.” The statute applies when the employer files a lawsuit based on the employee’s exercise of free speech or petition rights — which includes filing complaints, making reports to government agencies, and participating in legal proceedings.
When the employer files a SLAPP suit, the employee can file a special motion to strike — an early motion that asks the court to dismiss the employer’s lawsuit and to award the employee their attorney’s fees. The motion shifts the burden to the employer to demonstrate a probability of prevailing on the merits. If the employer cannot meet this burden, the lawsuit is dismissed and the employer pays the employee’s legal costs.
The anti-SLAPP statute exists because retaliatory lawsuits are a tool of intimidation. The employer does not need to win the lawsuit. It needs only to file it — to impose the cost, the stress, and the fear of defending against it. The statute neutralizes the tactic by providing a fast, fee-shifting mechanism for dismissal.
The threat as retaliation
Even when the employer does not follow through — when the threat remains a threat — the threat itself may constitute retaliation. Under FEHA, retaliation includes any action that is “reasonably likely to deter employees from engaging in protected activity.” Government Code section 12940(h), as interpreted in Yanowitz.
A threat to sue an employee for filing a discrimination complaint is reasonably likely to deter the employee — and other employees who hear about it — from exercising their rights. The threat does not need to be carried out to be actionable. Its deterrent effect is the violation.
What to do
An employee who is threatened with a lawsuit by their employer should:
Not be intimidated. The threat is a tactic, not a legal position. In most cases, the employer has no viable claim — and the employer knows it. The purpose of the threat is to make you stop. Understanding the purpose removes its power.
Consult with an attorney. An attorney can evaluate whether the threat has any substance — whether the employer has a genuine claim or is bluffing. If the employer follows through and files suit, the attorney can file an anti-SLAPP motion to dismiss and recover fees.
Document the threat. If the threat was made in writing, preserve it. If it was made verbally, write down what was said, by whom, and when. The threat itself is evidence of retaliation — and it may strengthen your original claim.
Continue exercising your rights. The purpose of the threat is to make you stop. Don’t stop. File your complaint. Consult your attorney. Cooperate with the investigation. The law protects you for doing these things, and the employer’s attempt to punish you for doing them is independently unlawful.
If your employer threatens to sue you for filing a complaint, consulting an attorney, or reporting unlawful conduct — the threat is a tactic, not a case. California’s anti-SLAPP statute provides a mechanism for dismissing retaliatory lawsuits and recovering your legal costs. The threat itself may constitute retaliation. Do not let it stop you from exercising the rights the law provides.
This article is general information about California law and is not legal advice. Every situation turns on its particular facts.