Gallano v. Burlington Coat Factory of Cal., LLC, 2021 WL 3616152 (Cal. Ct. App. 2021)

Krizel Gallano, a former employee of Burlington Coat Factory, filed this putative class action in which she alleged that Burlington forces its employees to pay for business losses incurred for common on-the-job mistakes by “misusing” California’s shoplifting statute (Cal. Pen. Code § 490.5) and intimidating employees into signing promissory notes that result in their shouldering the debt for the company’s financial losses.  Among other things, Gallano alleged that Burlington had violated Cal. Lab. Code § 2802, which requires employers to indemnify employees for “expenditures or losses” that were incurred in direct consequence of the discharge of their duties for the employer.  In response, Burlington filed an anti-SLAPP motion to dismiss the 2802 claim (arguing that Gallano’s claims arose out of protected activity because the challenged conduct was undertaken in anticipation of litigation), but the trial court denied it.  In this opinion, the Court of Appeal affirmed the trial court’s denial of Burlington’s anti-SLAPP motion, holding that when Gallano executed the promissory note at the direction and for the benefit of Burlington, she incurred an economic loss sufficient to trigger the protections of Section 2802.  The Court rejected Burlington’s additional argument based upon its “post-motion conduct in disclaiming any interest in enforcing the promissory note or the civil demand letters [because it] appears designed to preempt this lawsuit from proceeding as a class action.”