When an employee (current or former) makes negative comments about the employer, whether publicly or by sending them directly to clients, the employer may consider commencing legal action, including a defamation lawsuit, against the employee.
However, employers should be aware of Ontario’s Anti-SLAPP (Strategic Lawsuits Against Public Participation) provisions (i.e., section 137.1 of the Ontario Courts of Justice Act), which aims to reduce lawsuits that are brought for the purpose of discouraging individuals or organizations from speaking out about matters of public interest.
Two cases, Diverse Transportation v Chen, 2025 ONSC 554 (“Diverse Transportation”), and Canadian Truck Warranty Inc. et al (decision yet to be reported) (“Canadian Truck”), provide some guidance as to the application of the Anti-SLAPP provisions in the employment context.
The Anti-SLAPP test
After an employee asserts s.137.1 after they have been sued by their employer, that employee has the initial burden to satisfy the Court that the expression they made related to a matter of public interest. If the employee cannot satisfy the Court of such, then the matter is not one of public interest and the employer’s lawsuit may continue.
However, if the employee does satisfy the Court of such, then the company has to show that there are grounds to believe the proceeding has substantial merit, that the employee has no valid defence, and that the public interest in the proceeding continuing outweighs the public interest in protecting the employee’s expression. If the company fails to satisfy the Court of any of those, then the lawsuit will be dismissed.
Diverse Transportation
In Diverse Transportation, a former employee, Zhou Chen, was not satisfied with the settlement he had already obtained, and following Diverse’s refusal to pay him more money, he began to send accusations of poor safety practices and financial dishonesty to Diverse’s customers. Following ineffective cease and desist communications, Diverse successfully obtained an injunction against Chen and sued him for defamation.
Chen, claiming the public needed to know that Diverse was a bad company, moved to dismiss the lawsuit using the Anti-SLAPP provisions.
The Court determined that Chen’s messages to Diverse’s clients were not expressions that were genuinely related to the public interest. The Court noted that while trucking safety and financial honesty may be matters of public interest, in this case, Chen’s allegations were actually a disguised form of debt collection – he was alleging safety and financial concerns with the aim of being paid more money.
As the Court found that the matter was not one of genuine public interest, Diverse’s defamation lawsuit was permitted to continue.
Canadian Truck
In Canadian Truck, the company sued several former employees for various claims, including malicious prosecution and defamation, based on the company being reported to the Canada Revenue Agency (CRA) for misuse of funds, a workplace harassment complaint to the Ministry of Labour, Immigration, Training and Skills Development (MLITSD), and participation in a group chat discussing workplace abuse and harassment. The company also claimed that certain employees created false employment records, withheld passwords to the company’s website, and other various financial-related allegations.
The Court found that the complaints to the CRA and the MLITSD were regarding the misuse of government funding and harassment in the workplace, which are both matters of public interest. Similarly, the Court found that the group chat, though a private chat, was still related to the public interest because it was regarding workplace harassment and abuse.
The Court subsequently found that the company failed to demonstrate that there were grounds to believe the proceeding had substantial merit. Specifically, the claims of malicious prosecution were untenable as there was no basis to believe the components of such accusations were made out or that the complaints had been brought in malice. The defamation claims were also untenable as the group chat was private and there was no evidence that the discussion within it was disseminated beyond the members of that chat.
Accordingly, the Court dismissed the company’s claims except those involving falsifying employment records, withholding the website passwords, and the other financial-related allegations. The Court stated that those claims were significant stand-alone claims.
Lessons for employers
Employers need to be aware of Ontario’s Anti-SLAPP provisions when assessing whether to pursue a defamation (or other) claim against employees.
While an employee asserting the Anti-SLAPP provisions has the initial onus to demonstrate that their expression relates to a matter of public interest, previous case law has demonstrated that the standard for such is not an onerous bar to meet.
It is the employer’s subsequent onus – showing that there are grounds to believe the proceeding has substantial merit, that the employee has no valid defence, and that the public interest in permitting the proceeding to continue outweighs the public interest in protecting the expression – that can be more difficult to achieve.
Employers are still permitted to bring claims against employees where such is appropriate, as demonstrated by Diverse Transportation. However, the potential need to defend against an Anti-SLAPP motion does need to be accounted for when considering litigation.
John Hyde is the managing partner at Hyde HR Law in Toronto. He advises management on all aspects of employment and labour law, including representation before administrative tribunals, collective agreement negotiation, arbitrations, wrongful dismissal defence and human rights.
