SONJA SAHLI vs. BULL HN INFORMATION SYSTEMS, INC.

CORDY, J. In this case, we hold that a lawsuit filed by an employer against a former employee who has lodged a charge

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of discrimination is not an act of retaliation or interference in violation of the State's antidiscrimination laws where the lawsuit had a legitimate basis in law and in fact.

1. Background. Sonja Sahli worked in the human resources department of Bull HN Information Systems, Inc. (Bull), for eight years. [Note 1] She was laid off in April, 1995, at age fifty-three. [Note 2] After she was notified about the impending layoff, Sahli applied for, but was not selected to fill, a vacant position in the human resources department. Before she left Bull, Sahli signed a release and severance agreement, in which she agreed to release Bull from any "current or prior claims arising out of [her] employment with or termination from Bull," in exchange for eight weeks of her salary as severance payment. [Note 3]

Several months after leaving Bull, Sahli learned that the person who was hired to fill the vacant position was a younger woman. [Note 4] Believing that she was not chosen to fill the position because of her age, Sahli filed a charge of discrimination with

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the Massachusetts Commission Against Discrimination (MCAD), asserting, inter alia, that:

(1) "Bull's policy and practice in the event of a lay-off is to place a laid-off employee in another vacant position within the company, where possible."

(2) "I was amply qualified for [a vacant position in the human resources department]."

(3) "I heard that Bull had filled the [vacant position] with an outside applicant who was a number of years younger than I was. On information or belief, the person who was hired for the position was less qualified for it than I was."

(4) "I believe that Bull failed to follow its policy and practice in my case of relocating laid-off employees into vacant positions within the company and failed to hire me for the [vacant position] because of my age."

In response to Sahli's MCAD charge, Bull filed a complaint for declaratory relief in the Superior Court alleging that Sahli's discrimination charge was barred by the terms of the release that she had signed when she left Bull. Bull contended that the essence of Sahli's discrimination claim was Bull's failure to relocate her into a vacant position instead of laying her off, and as such, was a claim arising out of her termination. Therefore, Bull asked the court to "declar[e] the parties' respective rights, duties, and obligations under the Release Agreement," find that Sahli's bringing of the discrimination charge violated its terms, and order the return of Sahli's severance payment.

One month after Bull filed its complaint, Sahli filed a second charge of discrimination with the MCAD alleging that Bull's complaint constituted discriminatory retaliation in violation of G. L. c. 151B, § 4 (4) (retaliation claim), and threats, intimidation, coercion, and interference with her protected rights in violation of G. L. c. 151B, § 4 (4A) (interference claim). [Note 5] She also filed a motion to dismiss Bull's complaint in the Superior

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Court, arguing that the release did not bar her MCAD charge because it involved a "failure to hire" claim that did not accrue until she discovered, several months after she had left Bull, that the person who filled the vacant position was a younger woman. Without deciding the merits of Bull's claim, a Superior Court judge allowed Sahli's motion to dismiss without prejudice. [Note 6]

As permitted by G. L. c. 151B, § 9, Sahli removed both of her charges from the MCAD and filed a complaint in the Superior Court alleging age discrimination in violation of G. L. c. 151B, § 4 (1B) (Count I), retaliation in violation of G. L. c. 151B, § 4 (4) (Count II), and interference with a protected right in violation of G. L. c. 151B, § 4 (4A) (Count III). Following discovery, both parties moved for summary judgment and, on March 16, 2001, a judge allowed Bull's motion on all counts. She ruled that the undisputed fact that the person who filled the vacant position was more qualified than Sahli defeated her discrimination claim. She also ruled that Sahli's retaliation claim failed because Sahli could not show that she suffered any "adverse employment consequence" as a result of filing her MCAD charge, and that her interference claim failed because the filing of a lawsuit did not rise to the level of "threats, intimidation or coercion" necessary to violate § 4 (4A). Bull then filed a motion for costs, which was allowed. [Note 7]

Sahli appealed the summary judgment rulings on her claims of retaliation (Count II), and interference (Count III). She also appealed from the allowance of the motion for costs. [Note 8] We transferred the case here on our own motion. We conclude that

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Bull's filing of a complaint in the Superior Court for declaratory relief did not constitute an act of retaliation or interference violative of G. L. c. 151B, § 4 (4), or G. L. c. 151B, § 4 (4A), and therefore affirm the judge's allowance of Bull's motion for summary judgment, although on different grounds. GTE Prods. Corp. v. Stewart, 421 Mass. 22, 36 (1995). We also affirm the allowance of Bull's motion for costs. [Note 9]

2. Discussion. Retaliation claims under G. L. c. 151B, § 4 (4), and interference claims under G. L. c. 151B, § 4 (4A), constitute separate and independent causes of action. See Abramian v. President & Fellows of Harvard College, 432 Mass. 107, 121 (2000). Sahli contends that Bull violated both § 4 (4) and § 4 (4A), by filing the complaint for declaratory relief which forced her to defend herself in a separate litigation, incur additional attorney's fees, and fear the loss of her severance pay.

The threshold question we must decide is whether the filing of a lawsuit by a corporate employer seeking a declaration of its rights, duties, and obligations under a contract entered into with one of its employees can constitute an act violative of the retaliation and interference provisions of G. L. c. 151B. To resolve this question, we must balance the constitutional right to seek judicial resolution of disputes under the First Amendment to the United States Constitution [Note 10] and art. 11 of the Massachusetts

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Declaration of Rights [Note 11] against the statutory right under G. L. c. 151B to seek redress for allegations of discrimination without fear of retaliation for or interference with the exercise of that right.

We had occasion to balance similar interests in Bain v. Springfield, 424 Mass. 758 (1997) (Bain). In that case, a newspaper article described the plaintiff's allegations of discriminatory hiring practices in city government. [Note 12] The same article also reported the mayor's response to the allegations, which included his belief that the plaintiff's complaints were " 'baseless,' 'meritless,' and 'an example of someone trying to manipulate the civil rights laws for personal gain.' " Id. at 760. The plaintiff filed suit, alleging that the mayor's comments, among other things, constituted retaliation under G. L. c. 151B against her for having voiced concerns about the city's hiring practices. Id. at 761, 765-766.

Balancing the plaintiff's interest in remedying discrimination with the mayor's First Amendment right to free speech, we concluded:

"[W]e most emphatically cannot countenance as an instance of retaliation . . . the mayor's response in the local newspaper to the charges against him. The newspaper quoted Bain's serious and damaging charges against the mayor, an elected official. He was entitled to respond in the same forum, to defend himself and to state what political judgments seemed appropriate so long as they were not defamatory -- which these were not. . . . The interest in remedying discrimination is weighty but not so weighty as to justify what amounts to a restriction on core political speech."

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Id. at 766-767. Consistent with this reasoning, we conclude in the instant case that, although the interest in remedying discrimination is weighty, it is not so weighty as to justify what amounts to an absolute restriction on an employer's right to petition the courts.

The United States Supreme Court has recognized the right to petition the government, including the courts, as one of "the most precious of the liberties safeguarded by the Bill of Rights," United Mine Workers v. Illinois Bar Ass'n, 389 U.S. 217, 222 (1967), implied by the "very idea of a government, republican in form," United States v. Cruikshank, 92 U.S. 542, 552 (1875). See Pinnick v. Cleary, 360 Mass. 1, 11-12 (1971) (art. 11 "is clearly directed toward the preservation of procedural rights and has been so construed"). The Court has protected the right to petition "whenever it is genuine, not simply when it triumphs." BE & K Constr. Co. v. NLRB, 536 U.S. 516, 532 (2002) (BE & K). Thus, in the antitrust context, the Court has held that unless petitioning activity is both objectively and subjectively a "sham," it is immune from antitrust liability. Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 60-61 (1993). And in the labor context, the Court has held that the First Amendment protects "[t]he filing and prosecution of a well-founded lawsuit [from being] enjoined as an unfair labor practice, even if it would not have been commenced but for the plaintiff's desire to retaliate against the defendant for exercising rights protected by the [National Labor Relations] Act." Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.S. 731, 743 (1983).

The right to petition is not, however, an absolute right. For example, "baseless" or "sham" litigation is not protected by the First Amendment. See Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 144 (1961) (Noerr). See also BE & K, supra at 531 ("our holdings [have] limited regulation to suits that were both objectively baseless and subjectively motivated by an unlawful purpose" [emphasis in original]). "Sham" litigation has been defined in the antitrust context as litigation that is "objectively baseless in the sense that no reasonable litigant could realistically expect success on the merits," and in which the litigant's subjective motivation is

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" 'to interfere directly with the business relationships of a competitor' . . . through the 'use [of] the governmental process -- as opposed to the outcome of that process -- as an anticompetitive weapon"' (emphasis in original). Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., supra at 60-61, quoting Noerr, supra at 144, and Columbia v. Omni Outdoor Advertising, Inc., 499 U.S. 365, 380 (1991).

The United States Supreme Court recently granted certiorari to reexamine the scope of the right to petition when it considered whether the National Labor Relations Board (NLRB) could "impose liability on an employer for filing a losing retaliatory lawsuit, even if the employer could show the suit was not objectively baseless." BE & K Constr. Co. v. NLRB, 534 U.S. 1074 (2002). The employer (BE & K) had filed a series of unsuccessful complaints in Federal court against several unions, alleging that they had attempted to delay a construction project because BE & K's employees were not unionized. BE & K, supra at 520-522. The unions responded by lodging complaints against BE & K with the NLRB, alleging that BE & K had violated the antiretaliation provision of the National Labor Relations Act (NLRA). [Note 13] Id. at 522. The NLRB agreed, deciding that BE & K's lawsuit was not meritorious and "had been unlawfully motivated because it was directed at protected conduct' and 'necessarily tended to discourage similar protected activity,' and because petitioner admitted it had filed suit 'to stop certain [u]nion conduct which it believed to be unprotected.' " Id. at 523. Based on these conclusions, the NLRB concluded that BE & K had violated the NLRA, and ordered BE & K "to cease and desist from prosecuting such suits and to post notice to its employees . . . promising not to pursue such litigation in the future." Id. The United States Court of Appeals for the Sixth Circuit found substantial evidence to support the NLRB's conclusions. Id. at 523-524.

The Supreme Court reversed, concluding that "unsuccessful but reasonably based suits" fall within the scope of First Amendment

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protection. Id. at 536. In support of its decision, the Court rejected the NLRB's view of a retaliatory lawsuit -- "one 'brought with a motive to interfere with the exercise of protected [NLRA] rights' " -- because that definition "broadly covers a substantial amount of genuine petitioning." Id. at 533. The Court decided that if an employer's belief that certain conduct is illegal "is both subjectively genuine and objectively reasonable, then declaring the resulting suit illegal affects genuine petitioning." Id. at 533-534. The Court concluded that "[a]s long as a plaintiff's purpose is to stop conduct he reasonably believes is illegal, petitioning is genuine both objectively and subjectively" (emphasis in original). Id. at 534. [Note 14] Where the only evidence of retaliatory purpose was the bringing of a reasonably based but unsuccessful lawsuit, combined with testimony that the employer disliked the unions, the Court held that finding the lawsuit to be violative of Federal law barring employers from interfering with, restraining, or coercing employees in the exercise of their rights, unduly burdened the employer's First Amendment right to petition. [Note 15]

Applying these principles to G. L. c. 151B, we decline to read § 4 (4) and § 4 (4A) as reaching all reasonably based but unsuccessful lawsuits brought in response to the filing of a discrimination claim. Cf. BE & K, supra at 536. When an employer files a complaint seeking a declaration of its rights, duties, and obligations under a contract that it entered into with an employee, and the lawsuit has a legitimate basis in law and

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fact, the employer does not violate the provisions of either § 4 (4) or § 4 (4A), absent evidence that the employer's purpose is other than to stop conduct it reasonably believes violates the terms of the contract. Cf. BE & K, supra at 533-534. We now apply this holding to the case before us.

We first consider whether Bull's complaint for declaratory relief had a legitimate basis in law. General Laws c. 231A, § 1, allows courts to "make binding declarations of right, duty, status and other legal relations sought thereby, either before or after a breach or violation thereof has occurred in any case in which an actual controversy has arisen and is specifically set forth in the pleadings." The purpose of this statute is to provide a plaintiff relief from uncertainty and insecurity with respect to rights, duties, status, and other legal relations. See, e.g., Oxford v. Oxford Water Co., 391 Mass. 581, 584-585 (1984). The determination of contractual rights is a proper subject of a declaratory judgment proceeding. See, e.g., Pitman v. J.C. Pitman & Sons, 324 Mass. 371 (1949) (determining effect of general release signed in conjunction with sale of business). See also Billings v. Fowler, 361 Mass. 230, 234 (1972) (c. 231A "was intended to expand, at least in the discretion of the court, prior provisions for the interpretation of written instruments"); School Comm. of Cambridge v. Superintendent of Schs. of Cambridge, 320 Mass. 516, 518 (1946) ("One of the benefits of the declaratory procedure is that it does not require one to incur the risk of violating some term of a contract or of invading some right of the other, even if done in good faith, before he may have relief"). Thus, Bull's complaint seeking declaratory relief had a legitimate basis in law. [Note 16]

We next consider whether there was a legitimate basis in fact to support Bull's complaint. Bull's one-count complaint sought a declaration from the court regarding its rights under the terms of the release:

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"Sahli released and covenanted not to sue Bull for any current or prior claims arising out of her employment with Bull or her termination from Bull. At the time she signed the Release Agreement, she knew she was being terminated and so acknowledged in the Release Agreement. The essence of her claim is that she was terminated rather than being relocated into an open position pursuant to an alleged policy or practice of Bull HN."

Bull asserted that "[a] real, substantial, and justiciable controversy exists between Bull HN and Sahli concerning whether she has breached her Release Agreement with Bull HN and concerning the parties' respective rights and obligations under the General Release and Severance Agreement."

Sahli contended that there should never have been any confusion about the basis of her "failure-to-hire" claim. We disagree. The correspondence between Sahli's counsel and Bull preceding the filing of the MCAD charge, [Note 17] the description of the claim set out in the MCAD charge itself, and the affidavits attached to the charge [Note 18] demonstrate that as originally filed, Sahli's MCAD charge included discrimination claims based both on Bull's failure to relocate her into the vacant position instead of laying her off (a claim likely covered by the release), and on Bull's failure to hire her into the vacant position after she had been laid off (a claim likely not covered by the release). Even if viewed in the light most favorable to Sahli, the basis for her

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original charge was unclear. To the extent that this lack of clarity could have reasonably led Bull to believe that part or all of Sahli's MCAD charge was barred by the release, there was a legitimate basis in fact to support the filing of Bull's complaint.

Finally, there is no evidence that Bull's purpose in bringing the lawsuit was anything other than to stop conduct it reasonably believed to be violative of the terms of the release. [Note 19] The only evidence of retaliatory purpose was the filing of the lawsuit itself. As the Supreme Court held in BE & K, supra, such evidence is inadequate, as a matter of law, to justify any burden on Bull's constitutional right to petition the courts. The filing of Bull's complaint did not violate § 4 (4) or § 4 (4A) of G. L. c. 151B, and summary judgment was properly granted. [Note 20]

3. Award of costs. The Superior Court judge properly allowed Bull's motion for costs. General Laws c. 261, § 1, states: "In civil actions the prevailing party shall recover his costs, except as otherwise provided." Rule 54 (d) of the Massachusetts Rules of Civil Procedure, as appearing in 382 Mass. 821 (1980), states that: "Except when express provision therefor is made either in a statute of the Commonwealth or in these rules, costs shall be allowed as of course to the prevailing party unless the court otherwise directs . . . ." Contrary to Sahli's contention, G. L. c. 151B does not preclude an award of costs to a prevailing defendant. See G. L. c. 151B, § 9 ("If the court finds for the petitioner it shall, in addition to any other relief and irrespective of the amount in controversy, award the petitioner reasonable attorney's fees and costs unless special circumstances would render such an award unjust").

Judgment affirmed.