U.S. Court of Appeals for the First Circuit Case to Watch Regarding the Cannabis Industry

An employer brought counterclaims of malicious prosecution and abuse-of-process in response to a Wage Act suit brought by an employee. The Appeals Court cited that the employer’s counterclaims should have been dismissed under the anti-SLAPP (Strategic Lawsuits Against Public Participation) law. Anti-SLAPP laws are meant to provide parties with a way to quickly dismiss meritless lawsuits filed against them, usually in response to a lawsuit. The plaintiff in this case, an hourly laborer, claimed that his employer violated the Wage Act by failing to pay him for four of the six weeks he worked for them. The employer refuted these allegations, stating that the employee had only worked for two weeks, that he had been paid in full and then brought counterclaims of malicious prosecution and abuse of process. The District Court judge denied the plaintiff’s motion to dismiss the counterclaims under the anti-SLAPP law. When brought to the Appeals Court, the decision was reversed; the Appeals Court stated that the defendants did not meet the burden of showing that plaintiff’s claims lacked an objectively reasonable factual basis. This ruling suggests that it might behoove an employer to pause and wait to see if a plaintiff’s Wage Act claim fails before filing a counterclaim of abuse of process or malicious prosecution in response.  If your business has any questions on this topic or any other matters, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.