The Texas Citizens Participation Act (TCPA) is Texas’ anti-SLAPP law. The TCPA allows a party facing a frivolous lawsuit to file an early motion to dismiss and, if successful, to recover its attorneys’ fees if the lawsuit is based on, relates to, or is in response to the movant’s exercise of the right of free speech, the right to petition, or the right of association. The TCPA recently was amended, effective September 1, 2019, to exempt claims for trade secret misappropriation and enforcement of covenants not to compete. However, claims brought before that time continue to make their way through Texas courts. One such recent case provides significant guidance on the TCPA’s “commercial speech exemption.”

In that case, Jeffrey Hieber (Hieber) resigned from his employment with Percheron Holdings, LLC and Percheron Professional Services, LLC (collectively, Percheron) and went to work for a competitor, LJA Surveying, Inc. (LJA). While at LJA, Hieber sold LJA’s services to a Percheron customer. Percheron sued, claiming that Hieber violated the non-compete and customer non-solicitation covenants he agreed to while employed by Percheron. Hieber responded to the lawsuit by filing a motion to dismiss the case under the TCPA.

Percheron asserted several responses to Hieber’s TCPA motion, including that his claims were exempted from TCPA protection under the “commercial speech exemption,” which exempts claims that relate to statements and conduct in connection with the sale or lease of goods or services. Specifically, this exemption applies when:

  1. The party that filed the TCPA motion (Hieber) was primarily engaged in the business of selling or leasing goods or services;
  2. The party that filed the TCPA motion made the statement or engaged in the conduct on which the claim in the lawsuit is based in that party’s capacity as a seller or lessor of those goods or services;
  3. The statement or conduct at issue in the claim arose out of a commercial transaction involving the kind of goods or services the movant provides; and
  4. The intended audience of the statement or conduct was an actual or potential customer of the party that filed the TCPA motion for the kind of goods or services the movant provides.

The Court of Appeals had little trouble finding that Hieber was engaged in the business of sales as his roles at both Percheron and LJA involved selling those companies’ competing services. Importantly, while Hieber argued that he was merely an employee and only Percheron and LJA were primarily engaged in the business of selling services, the Court of Appeals rejected such a narrow interpretation and found that the commercial speech exemption “can apply even though the movant is just an employee” when the employee has a sales role like Hieber.

The Court of Appeals went on to find that Percheron’s claims for Hieber’s violations of his non-compete and customer non-solicitation covenant were related to Hieber’s statements to customers made in connection with commercial transactions in Hieber’s capacity as a seller of LJA’s services. Accordingly, the court determined that Percheron’s claims were exempt from the TCPA under the “commercial speech exemption.”

This decision reinforces that the “commercial speech exemption” to the TCPA is not reserved solely for claims against companies that are in the business of selling or leasing goods or services. Instead, it also applies more broadly to claims asserted against individual employees based on their statements and conduct in connection with their sales activity on behalf of such companies.

Anti-SLAPP motions under the TCPA have been filed in record numbers recently. Such motions involve significant issues (including whether certain exemptions may apply) that must be considered by both plaintiffs and defendants at the outset of any litigation. Reed Smith has extensive experience litigating both sides of these motions in courts across Texas in a variety of employment and commercial contexts.