Employer’s Defamation Claim Dismissed: Anti-SLAPP Risks in Workplace Disputes

On August 16, 2024, the Ontario Superior Court released its decision in Contrans Tank Group GP Inc. v. Chen, 2024 ONSC 5441, dismissing a defamation lawsuit brought by an employer against a former truck driver. While the claim alleged reputational harm, the court found the lawsuit was primarily intended to intimidate or silence the worker.

It therefore contravened Ontario’s anti-SLAPP (Strategic Lawsuits Against Public Participation) legislation under section 137.1 of the Courts of Justice Act.

This ruling illustrates how defamation litigation can quickly backfire, not only leading to dismissal but also resulting in damages and costs against the party who brought the claim.

It’s a cautionary reminder that anti-SLAPP law is a powerful shield in Ontario litigation.

What Is a SLAPP Lawsuit and Why Does It Matter?

Strategic lawsuits against public participation, or SLAPPs, are lawsuits used to deter individuals from speaking out on issues of public interest. In Ontario, section 137.1 of the Courts of Justice Act allows defendants to seek early dismissal of such lawsuits.

The goal is to ensure that individuals can raise concerns on matters of public importance without facing expensive or intimidating litigation.

For companies and individuals, this means that filing a defamation claim without strong legal grounds especially where the subject matter has broader public interest can be extremely risky.

Case Overview: Contrans Tank Group v. Chen

The Facts

Z.C., a truck driver employed by Contrans Tank Group of Woodstock, Ontario, alleged that he was underpaid during his employment. He claimed the company targeted immigrant and minority workers for improper pay deductions and pressured him to work on holidays as a Chinese immigrant.

After his departure, Z.C. sent an email to former colleagues warning them to check their paycheques and stating that Contrans “isn’t an honest company.”

The Employer’s Response

Contrans sued for defamation and sought an injunction barring Z.C. from contacting employees or discussing the company’s pay practices.

Z.C. responded by filing a motion under Ontario’s anti-SLAPP legislation, arguing that his statements were on a matter of public interest.

Why the Court Dismissed the Employer’s Claim

The court found that:

• The lawsuit arose from an expression about a matter of public interest. Pay practices that may affect other employees, especially those from marginalized groups, are of public concern.

• The employer failed to meet the legal threshold to proceed. The judge found there was a reasonable basis to believe Z.C. might successfully defend the claim based on truth or justification, and that the potential harm to Contrans’ reputation did not outweigh the public interest in allowing Z.C.’s expression.

• The employer acted for an improper purpose. Contrans attempted to drop the lawsuit only after Z.C. completed the necessary steps under the anti-SLAPP motion. The judge found the action was intended to “silence and/or intimidate” Z.C., not to resolve a legitimate legal grievance.

Outcome

The court dismissed the employer’s claim. Z.C. was awarded $5,000 in statutory damages, and the employer was ordered to pay full legal costs associated with the anti-SLAPP motion.

Litigation Takeaways

This decision highlights several key risks in defamation litigation:

• Defamation claims are high-risk when tied to workplace or public interest issues. If the subject matter involves wages, discrimination, or fairness, courts may treat it as public interest speech.

• Anti-SLAPP motions freeze litigation and shift the burden. Once brought, an anti-SLAPP motion halts other proceedings, and plaintiffs must justify their case under a strict legal test.

• Improper purpose can backfire. If a court finds the lawsuit was intended to silence criticism rather than resolve a genuine harm, damages and costs may be ordered against the claimant.

• Litigation strategy is crucial. Defamation should rarely be the first tool used to address reputational concerns. Alternative dispute resolution, internal investigations, or tailored contractual remedies often present less risky options.

How Achkar Law Can Help

At ACHKAR LAW , we represent clients in defamation and complex litigation, including cases involving anti-SLAPP motions and workplace disputes that escalate into reputational battles.

We assist with:

• Evaluating the risks and benefits of pursuing defamation claims

• Defending against defamation actions and anti-SLAPP motions

• Strategic advice for employers and employees in workplace disputes involving reputation

• Representation in high-stakes litigation where employment, human rights, and public interest issues overlap