Ma Laboratories v. Shen CA6

Filed 7/24/15 Ma Laboratories v. Shen CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

MA LABORATORIES, INC., H040109
(Santa Clara County
Plaintiff and Respondent, Super. Ct. No. 113CV244982)

v.

BING SHEN,

Defendant and Appellant.

Ma Laboratories, Inc. (Ma Labs) sued its former employee, Bing Shen (Shen), for
breach of contract, among other claims. Ma Labs asserted that Shen had breached the
confidentiality provisions of two separate agreements signed in March and September
2010 (collectively, the agreements). In the agreements, the parties settled two claims
asserted by Shen against Ma Labs: (1) a wage claim brought before the California
Department of Labor Standards Enforcement (DLSE), and (2) a later-asserted overtime
claim. Ma Labs alleged that it was subsequently sued by 10 employees in a class action
lawsuit, Tian v. Ma Laboratories, Inc. (the Tian litigation). And Ma Labs claimed that
one or more of the plaintiffs “had been informed that . . . Shen had ‘won her case’ ” and
that Shen had violated the confidentiality provisions of the agreements by disclosing the
approximate amount Ma Labs had paid to settle her wage claim.
 Shen filed a special motion to strike the complaint under Code of Civil Procedure
section 425.16 (an anti-SLAPP motion).1 A SLAPP suit is one in which a plaintiff “seeks
to chill or punish a party’s exercise of constitutional rights to free speech and to petition
the government for redress of grievances. [Citation.]” (Rusheen v. Cohen (2006)
37 Cal.4th 1048, 1055.) An anti-SLAPP motion is resolved through a two-step process in
which the court decides (1) if the defendant has shown that the challenged claim arose
out of his or her constitutionally protected petitioning or speech activity; and
(2) assuming the defendant has met its burden to show he or she was engaged in
protected activity, whether the plaintiff has established a probability of prevailing on the
claim. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67
(Equilon).)
The complaint contained four causes of action: (1) breach of two written
contracts; (2) breach of the implied covenant of good faith and fair dealing; (3) fraud and
deceit; and (4) request for injunctive relief. The court denied the motion as to the first,
second, and fourth causes of action, concluding that Shen had not established the first
prong of the anti-SLAPP statute, i.e., that the claim arose out of her protected petitioning
or speech activity. But the court granted the motion as to the third cause of action for
fraud, which ruling Ma Labs did not appeal.
Shen appeals the order as it relates to the first, second, and fourth causes of action.
She contended below that the special motion to strike should be granted because (1) the
claims against her arose out of her protected speech and petitioning activity in connection
with her DLSE wage claim; and (2) Ma Labs could not show a probability of prevailing
because Shen at no time breached the confidentiality provisions of the agreements. On

1
“SLAPP is an acronym for ‘strategic lawsuit against public participation.’ ”
(Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 732, fn. 1.)
Further statutory references are to the Code of Civil Procedure unless otherwise
stated.

2
appeal, Shen makes a new argument that her claims arose out of the making of statements
in connection with the Tian litigation, which were protected communications for
purposes of the anti-SLAPP statute.
We conclude that Shen is precluded from raising for the first time on appeal her
argument that the claims arose out of her protected activity of making statements in
connection with the Tian litigation. And on the merits of what she argued below, we
conclude that Shen’s alleged communications about her DLSE claims were not protected
under the anti-SLAPP statute because those alleged communications occurred after
dismissal of the DLSE proceedings. But even were the alleged communications
protected, we nonetheless would find that Ma Labs satisfied its burden of showing a
probability of prevailing on its claims. Accordingly, we will affirm the order denying the
special motion to strike the first, second, and fourth causes of action of the complaint.
PROCEDURAL HISTORY
I. The Complaint
Ma Labs filed suit against Shen on or about April 19, 2013. It alleged four causes
of action in its unverified complaint: breach of two written contracts; breach of the
implied covenant of good faith and fair dealing; fraud and deceit; and request for
injunctive relief.
In the general allegations of the complaint common to each of the four causes of
action, Ma Labs alleged, among other things,2 that it was a computer components
distributor having its corporate headquarters and one of its distribution/warehouse
facilities in San José, and that Shen worked at the San José facility in the Inventory
Department from September 2006 to September 2010. Shen, in October 2009, asserted
“wage and hour claims (meal period/break period)” with the DLSE against Ma Labs
(hereafter, the wage dispute), and was represented by attorney Thomas Marc Litton.

2
To avoid repetition, we will sometimes dispense with the prefatory “Ma Labs
alleged” in describing the allegations of the complaint.

3
(Litton is counsel for Shen in the present action.) Ma Labs and Shen settled the wage
dispute on May 23, 2010. On June 6, 2010, they signed a “Confidential Settlement
Agreement” (hereafter, the wage settlement agreement). The wage settlement agreement
contained a confidentiality provision (paragraph 8) that read in part: “ ‘Confidentiality.
The terms and conditions of this Settlement Agreement and Release are strictly
confidential. . . . Plaintiff agrees that she will not reveal the existence or any of the
contents of this Agreement, including its terms, conditions, and the fact or amount of the
payment made in settlement of the released Claims, to anyone other than her immediate
family, her attorneys and any tax or accounting consultant . . . A violation of the aforesaid
confidentiality obligations by Shen . . . shall be a material breach of this Agreement. Ma
Labs shall, in the event of such breach, be entitled to affirm the Agreement and sue to
recover damages for such breach, and for such other legal and equitable remedies as may
be provided by law.’ ” (Emphasis omitted.)
After resolution of the wage dispute, Ma Labs requested that Shen return to work.
Shen refused, and she, through Litton, asserted further retaliation and overtime claims
(hereafter, the overtime dispute). The parties settled the overtime dispute, and on
September 29, 2010, they signed a “Confidential Severance Agreement” (hereafter, the
severance agreement). The severance agreement contained a confidentiality provision
(paragraph 11) containing language nearly identical to the confidentiality provision in the
wage settlement agreement, but imposed upon Shen a unilateral obligation of
confidentiality.
Ma Labs alleged that in the fall of 2010, after the execution of both agreements,
Shen breached the confidentiality provisions of the wage settlement agreement “and/or”
the severance agreement “by disclosing to third persons that she had complained of wage,
hour and other employment violations to [sic] Ma Labs and she had prevailed, including
disclosing the amount of the settlement. [She] also disclosed the terms of the Agreement

4
referenced above,[3] including the approximate amount of her initial settlement to third
persons,” and those disclosures were later disseminated to other “current and/or former
employees of Ma Labs.”
Ma Labs also alleged it was sued on March 1, 2011, by 10 employees in the Tian
litigation. One or more of the Tian plaintiffs indicated “they had been informed that
. . . Shen had ‘won her case.’ More recently, in early 2013, Ma Labs was informed for
the first time that these plaintiffs had been told by . . . Shen . . . of the approximate dollar
amount paid by Ma Labs to . . . Shen” under the wage settlement agreement. Ma Labs
further alleged it was damaged as a result of Shen’s breaches of the two agreements. Part
of those damages consisted of the “substantial attorney’s fees and costs qua damages in
defending the [Tian] litigation incited by said breach(es).”
In the first cause of action, Ma Labs alleged the confidentiality provisions were
material terms of the agreements. Shen “breached the confidentiality terms of both
agreements by disclosing to third parties the terms of the agreements,” and Ma Labs was
damaged as a result of the breaches.
In the second cause of action, Ma Labs alleged there was an implied covenant of
good faith and fair dealing that was part of the agreements. Shen breached the covenant
of good faith and fair dealing implied in both agreements “by willfully violating a
material term of the Agreements (confidentiality) to harm Ma Labs,” and it was damaged
as a result.
In the third cause of action, Ma Labs alleged that at the time Shen made the
promises under the agreements “to hold in strict confidence the disposition of her claims
and the material terms of the settlement(s),” she had no intention of performing them.

3
We surmise the reference to “Agreement referenced above” was intended to be to
both agreements, since (1) there were two agreements identified and described in the
complaint, (2) neither was identified in the complaint by the defined term “Agreement,”
and (3) there is a reference in a paragraph of the complaint to “the two Agreements
referenced above.”

5
She made these confidentiality promises with the intent to deceive Ma Labs, which was
damaged thereby.
In the fourth cause of action, Ma Labs alleged that “unique, extraordinary, severe
and irreparable injury” resulted from breaches of the agreements, it was continuing to
sustain severe irreparable injury from the breaches, and it had no adequate remedy at law
to address them. Accordingly, Ma Labs sought injunctive relief to prohibit further
disclosure of the terms, conditions, fact, or amount of any settlement related to the
agreements.
II. The Special Motion to Strike
On June 10, 2013, Shen filed a special motion to strike the complaint under the
anti-SLAPP statute. She asserted that each of the four causes of action arose out of the
exercise of her protected petitioning activity in connection with her DLSE claim, and that
Ma Labs could not establish a probability of prevailing on its claims. Shen submitted her
own declaration in which she denied she had ever made any disclosures violating the
confidentiality provisions of the agreements, and a declaration of Litton in support of the
motion to strike.
Ma Labs opposed the special motion to strike. It submitted 10 declarations and a
request for judicial notice containing as exhibits various pleadings and declarations
submitted in other cases.
After a hearing on the special motion to strike, the court issued an order partially
granting and partially denying the motion. The court held that the alleged conduct in the
first, second, and fourth causes of action did not arise out of protected activity, and it
denied the motion to strike those causes of action on that basis. But the court granted the
motion to strike the third cause of action for fraud, holding that Shen’s conduct arose out
of protected activity and Ma Labs had failed to demonstrate a probability of prevailing on
that claim. Shen appeals the court’s order as it relates to the first, second, and fourth
causes of action. Ma Labs did not appeal the court’s order on the third cause of action for
fraud, which has been dismissed from the complaint.

6
 DISCUSSION
I. Anti-SLAPP Motions to Strike
SLAPP suits may be disposed of summarily by a special motion to strike under
section 425.16, which is “a procedure where the trial court evaluates the merits of the
lawsuit using a summary-judgment-like procedure at an early stage of the litigation.”
(Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192.) The statute
provides: “A cause of action against a person arising from any act of that person in
furtherance of the person’s right of petition or free speech under the United States or
California Constitution in connection with a public issue shall be subject to a special
motion to strike, unless the court determines that the plaintiff has established that there is
a probability that the plaintiff will prevail on the claim.” (§ 425.16, subd. (b)(1).) The
Legislature has directed that the language of the statute be “construed broadly.”
(§ 425.16, subd. (a).)
Subdivision (e) of section 425.16 identifies four general categories of protected
activities. It provides: “As used in this section, ‘act in furtherance of a person’s right of
petition or free speech under the United States or California Constitution in connection
with a public issue’ includes: (1) any written or oral statement or writing made before a
legislative, executive, or judicial proceeding, or any other official proceeding authorized
by law; (2) any written or oral statement or writing made in connection with an issue
under consideration or review by a legislative, executive, or judicial body, or any other
official proceeding authorized by law; (3) any written or oral statement or writing made
in a place open to the public or a public forum in connection with an issue of public
interest; or (4) any other conduct in furtherance of the exercise of the constitutional right
of petition or the constitutional right of free speech in connection with a public issue or
an issue of public interest.” (§ 425.16, subd. (e).) Conduct or speech that is potentially
subject to anti-SLAPP protection under clauses (1) and (2) of section 425.16, subdivision
(e)—unlike clauses (3) and (4)—do not have a limitation that the speech or petitioning
rights must concern an issue of public interest. (Briggs v. Eden Council for Hope &

7
Opportunity (1999) 19 Cal.4th 1106, 1117 (Briggs).) Shen did not identify below the
specific clause of section 425.16, subdivision (e) that made her alleged actions protected
activity under the statute. But it is clear that her anti-SLAPP motion concerns activity
that may have been subject to protection under subdivision (e)(2), namely, “any written
or oral statement or writing made in connection with an issue under consideration or
review by a . . . judicial body.” (§ 425.16, subd. (e)(2) (hereafter § 425.16(e)(2).)
As noted above, a motion to strike under section 425.16 is analyzed and resolved
by “the court . . . engag[ing] in a two-step process. First, the court decides whether the
defendant has made a threshold showing that the challenged cause of action is one arising
from protected activity. The moving defendant’s burden is to demonstrate that the act or
acts of which the plaintiff complains were taken ‘in furtherance of the defendant’s right
of petition or free speech under the United States or California Constitution in connection
with a public issue,’ as defined in the statute. (§ 425.16, subd. (b)(1).) If the court finds
such a showing has been made, it then determines whether the plaintiff has demonstrated
a probability of prevailing on the claim.” (Equilon, supra, 29 Cal.4th at p. 67.) Thus,
“[o]nly a cause of action that satisfies both prongs of the anti-SLAPP statute—i.e., that
arises from protected speech or petitioning and lacks even minimal merit—is a SLAPP,
subject to being stricken under the statute.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 89
(Navellier), original italics.)
“Review of an order granting or denying a motion to strike under section 425.16 is
de novo. [Citation.] We consider ‘the pleadings, and supporting and opposing affidavits
. . . upon which the liability or defense is based.’ (§ 425.16, subd. (b)(2).) However, we
neither ‘weigh credibility [nor] compare the weight of the evidence. Rather, [we] accept
as true the evidence favorable to the plaintiff [citation] and evaluate the defendant’s
evidence only to determine if it has defeated that submitted by the plaintiff as a matter of
law.’ [Citation.]” (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269,
fn. 3 (Soukup).) In performing our de novo review, we “ ‘conduct[] an independent
review of the entire record. [Citations.]’ ” (Paulus v. Bob Lynch Ford, Inc. (2006) 139

8
Cal.App.4th 659, 672 (Paulus).) “[O]ur review is conducted in the same manner as the
trial court in considering an anti-SLAPP motion. In determining whether the defendant .
. . has met its initial burden of establishing that the plaintiff’s . . . action arises from
protected activity, we consider ‘the pleadings, and supporting and opposing affidavits
stating the facts upon which the liability or defense is based.’ (§ 425.16, subd. (b)(2);
[citations].) The second prong—i.e., whether the plaintiff . . . has shown a probability of
prevailing on the merits—is considered under a standard similar to that employed in
determining nonsuit, directed verdict or summary judgment motions. [Citation.] ‘[I]n
order to establish the requisite probability of prevailing [citation], the plaintiff need only
have “ ‘stated and substantiated a legally sufficient claim.’ ” [Citations.]’ ” (Ibid.)
We review the trial court’s decision, not its rationale. “If the trial court’s decision
denying an anti-SLAPP motion is correct on any theory applicable to the case, we may
affirm the order regardless of the correctness of the grounds on which the lower court
reached its conclusion. [Citation.]” (City of Alhambra v. D’Ausilio (2011)
193 Cal.App.4th 1301, 1307; see also Bernardo v. Planned Parenthood Federation of
America (2004) 115 Cal.App.4th 322, 357 (Bernardo) [appellate court decides
independently whether ruling on anti-SLAPP motion was correct, but need not decide
propriety of trial court’s reasoning].)

III. The Motion to Strike Was Properly Denied
A. Scope of Shen’s Special Motion to Strike
1. Arguments Made Below
As a threshold matter, we must first identify the arguments that are properly before
this court. In order to do so, we will review relevant portions of the record to determine
the positions asserted by Shen and Ma Labs in the trial court. In reviewing Shen’s
position below, we will omit discussion regarding her arguments in support of her motion

9
to strike the third cause of action for fraud. As noted, the motion as to that claim was
granted, and Ma Labs has not appealed that ruling.
Shen argued below that the complaint arose out of her constitutionally protected
activity within the meaning of the anti-SLAPP statute. She contended that each of Ma
Labs’ claims “[arose] out of Shen’s initial activity of petitioning the DLSE, followed by
her gaining relief from Ma Labs’ Labor Code violations in a the [sic] first negotiated
settlement agreement, and dismissing further claims for ‘retaliation and overtime related
claims’ in the second settlement agreement.” She stated that “[b]y Plaintiff’s own
allegations, Defendant Shen’s alleged wrongful conduct arises directly out of her
protected activity of asserting claims of Labor Code claims against Ma Labs, making
false ‘promises’ during the resolution of her claims and, allegedly, publicly discussing the
resolution of those claims with other Ma Labs employees. Therefore, . . . Defendant
Shen has met her burden under the first prong of the Anti-SLAPP test that Plaintiff’s
purported claims arise out of protected speech.”
In Shen’s reply papers filed in the trial court, she again asserted that (1) the
gravamen of Ma Labs’s complaint against her involved the allegation that she had
breached the confidentiality provisions of the two agreements; and (2) the allegations of
the complaint thus fell “squarely within [the exercise of Shen’s] protected activity.” In
support of her contention that the activity was protected, Shen cited Navarro v. IHOP
Properties, Inc. (2005) 134 Cal.App.4th 834 for the propositions that “protected free
speech activities include negotiating and execution of a release agreement concerning the
pursuit of legal claims.” Further, Shen asserted that her “free speech activities are at the
heart of Ma Labs’ claims. Ma Labs claims Defendant Shen’s alleged statements . . .
were: ‘disclosing to third parties that she had complained of wage, hour and other
employment violations to Ma Labs and she had prevailed, including disclosing the
amount of the settlement.’ [Citation.] Ma Labs further asserts that Defendant Shen
‘breached the Confidential Settlement Agreement by disclosing to Ms. Susana [sic] Lou,

10
Assistant Manager of Ma Labs Inventory Department, that she had “won the lawsuit”
against the Company.’ [Citation.]”
At the hearing on the motion, Shen reiterated her position that the claims in the
complaint arose out of protected activity. She asserted the conduct alleged to be
actionable—“that she won her case and got some money for it”—“directly related to her
act of discussing a case that she evidently thought that she’d won,” and that it constituted
“free speech comment[s].”
2. Shen’s New Contentions Are Barred
On appeal, Shen has significantly expanded her argument as to why the claims are
ones “arising from” her protected activities. She now argues that “[s]tatements made
about, and in connection with, civil litigation are protected communications under
consideration by a judicial body. [Citations]” She argues that her alleged statements
concerning her disputes with Ma Labs “were made in connection with the pending Tian
case about the exact substantive issues asserted in the Tian case.” And she argues that
“merely encouraging others to pursue speech or petition rights is itself an act of
furthering petitioning activities” protected under the anti-SLAPP statute.
In its respondent’s brief, Ma Labs objects to the opening brief, asserting that
Shen’s contention that her alleged statements were protected activity because they were
made in connection with the Tian litigation constitutes a new argument not raised below.
Ma Labs asserts that Shen waived this argument by not presenting it before the trial court.
It is the general rule that “ ‘issues not raised in the trial court cannot be raised for
the first time on appeal.’ [Citation.]” (Sea & Sage Audubon Society, Inc. v. Planning
Com. (1983) 34 Cal.3d 412, 417 (Sea & Sage Audubon Society); see also Johnson v.
Greenelsh (2009) 47 Cal.4th 598, 603.) As a related principle, “ ‘[a] party is not
permitted to change his [or her] position and adopt a new and different theory on appeal.’
” (In re Marriage of Broderick (1989) 209 Cal.App.3d 489, 501.) The rationale for both
of these tenets is that permitting consideration of new theories at the appellate level “
‘would not only be unfair to the trial court, but manifestly unjust to the opposing litigant.’

11
[Citations.]” (Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1350,
fn. 12 (Cable Connection); In re Marriage of Walker (2006) 138 Cal.App.4th 1408,
1418.) The principles that foreclose a party from raising issues for the first time on
appeal are equally applicable in the context of reviewing special motions to strike under
the anti-SLAPP statute. (See, e.g., Roger Cleveland Golf Company, Inc. v. Krane &
Smith, APC (2014) 225 Cal.App.4th 660, 685 & fn. 11; Hunter v. CBS Broadcasting, Inc.
(2013) 221 Cal.App.4th 1510, 1526; Bently Reserve L.P. v. Papaliolios (2013)
218 Cal.App.4th 418, 436.)
Shen asserts in her reply brief on appeal that she raised the argument in the trial
court that her speech was connected to the Tian litigation. In support of her position,
Shen quotes from a passage of the transcript at the hearing on the motion in which her
counsel argued: “[T]he Plaintiffs [sic] have indicated that the harm involved is the fact
that she has made this [statement], and therefore has led people to assume [sic] Ma Labs
on a claim that is similar to what Ms. Shen raised in the [L]abor [B]oard claim. So for
[Ma Labs,] saying that her speech was the crux of what their claim is all about, therefore
it is directly related to the exercise of free speech.”
From our reading of the transcript of the hearing—and from our reading of the
remainder of the appellate record—we do not find that Shen argued below that her
alleged statements constituted protected activity because they were made in connection
with the Tian litigation. At most, her contentions were that Ma Labs contended that she
had violated the confidentiality provisions of the agreements, that this alleged action was
protected activity, and that Ma Labs claimed it had been damaged by the alleged breaches
by having to defend the subsequent Tian litigation.
Nor do we agree with Shen that it is appropriate for us to consider her theory—
unasserted below—because it involves a pure question of law. The California Supreme
Court has explained: “On a number of occasions, however, appellate courts have relaxed
this rule [that issues unasserted below cannot be raised for the first time on appeal] and
have permitted a party to raise belatedly ‘a pure question of law which is presented on

12
undisputed facts.’ [Citations.] This forgiving approach has been most frequently
invoked when ‘important issues of public policy are at issue.’ [Citations.]” (Sea & Sage
Audubon Society, supra, 34 Cal.3d at p. 417; see also Redevelopment Agency v. City of
Berkeley (1978) 80 Cal.App.3d 158, 167 [“whether the general rule [of forfeiture] shall
be applied is largely a question of the appellate court’s discretion”].)
We do not believe this is an instance in which it is appropriate to relieve Shen of
her obligation of giving notice to counsel and the trial court of her new theory in support
of her contention that the complaint should be stricken under the anti-SLAPP statute.
First, it is unclear that her new argument involves a pure question of law. Second, it is
probable that Ma Labs—had Shen made the argument below—would have addressed it
with further argument and, possibly, with additional evidence. (Cf. Munro v. Regents of
University of California (1989) 215 Cal.App.3d 977, 988-989 [declining to consider new
theory on appeal because it would have been unfair to party who had successfully moved
for summary judgment without benefit of having been able to respond to theory at trial].)
We therefore decline Shen’s request that we address the new theory on appeal. To
consider Shen’s new contention at this late stage of the proceedings “ ‘would not only be
unfair to the trial court, but manifestly unjust to the opposing litigant.’ [Citations.]”
(Cable Connection, supra, 44 Cal.4th at p. 1350, fn. 12.) But even if we were to consider
her new argument on appeal, and even assuming we agreed that her statements were
protected under the first prong of the anti-SLAPP analysis, we would still affirm the
order denying the motion to strike because, as discussed below in Section I.C., Ma Labs
has shown a probability of prevailing on its claims.
B. Shen’s Alleged Underlying Conduct Was Not Protected Activity
In determining whether denial of Shen’s special motion to strike the complaint
was proper, we first examine whether Shen sustained her burden of making a threshold
showing that her alleged activity on which the complaint was based was protected under
the anti-SLAPP statute. (Equilon, supra, 29 Cal.4th at p. 67.) As noted above, Shen
asserted that the claims in the complaint arose from “her protected activity of asserting

13
claims of Labor Code claims against Ma Labs, . . . and, allegedly, publicly discussing the
resolution of those claims with other Ma Labs employees.”
As the California Supreme Court has explained, in order to determine whether the
cause of action is one “arising from” the defendant’s protected activity (§ 425.16,
subd. (a)), “the critical consideration is whether the cause of action is based on the
defendant’s protected free speech or petitioning activity. [Citations.]” (Navellier, supra,
29 Cal.4th at p. 89, original italics.) It is not enough for the defendant to show that the
plaintiff’s lawsuit was filed after the defendant engaged in protected activity, or that the
claim was “ ‘triggered’ by protected activity.” (Ibid.; see also City of Cotati v. Cashman
(2002) 29 Cal.4th 69, 76-78.)
Here, the activity of which Ma Labs complains involves Shen’s alleged breaches
of the confidentiality provisions of both settlement agreements. In the breach of contract
claim, Ma Labs alleged that Shen breached the agreements “by disclosing to third persons
that she had complained of wage, hour and other employment violations to [sic] Ma Labs
and she had prevailed, including disclosing the amount of the settlement.” Likewise, the
second cause of action was based upon Shen’s alleged breaches of the covenant of good
faith and fair dealing implied in both agreements “by willfully violating a material term
of the Agreements (confidentiality) to harm Ma Labs.” And in the fourth cause of action,
Ma Labs alleged that it had sustained irreparable injury from Shen’s breaches of the two
agreements, and it required injunctive relief to prohibit further disclosure of the terms,
conditions, fact, or amount of any settlement related to the agreements.
To be protected, the alleged conduct must constitute “any written or oral statement
or writing made in connection with an issue under consideration or review by a
legislative, executive, or judicial body, or any other official proceeding authorized by
law.” (§ 425.16(e)(2).) This can be determined from a three-stage analysis, asking
whether (1) there was an “issue under consideration or review by a legislative, executive,
or judicial body, or any other official proceeding”; (2) Shen’s alleged communications
were made “in connection with” this issue; and (3) the causes of action pleaded by Ma

14
Labs “aris[e] from” those communications. (Ibid.; see City of Costa Mesa v. D’Alessio
Investments, LLC (2013) 214 Cal.App.4th 358, 372.)
We can readily identify the “other official proceeding” here as being Shen’s DLSE
proceeding. Such an administrative proceeding is one contemplated under section
425.16(e)(2). (See Kurz v. Syrus Systems, LLC (2013) 221 Cal.App.4th 748, 759 [claim
before Unemployment Insurance Compensation Board “involves the litigation of a claim
for unemployment insurance benefits in an official proceeding authorized by law” under
section 425.16(e)(2)].) But was there “an issue under consideration or review”
(§ 425.16(e)(2)) by that administrative body? Under section 425.15(e)(2), “a matter is
‘under consideration’ if it ‘is one kept “before the mind,” given “attentive thought,
reflection, meditation.” [Citation.] A matter under review is one subject to “an
inspection, examination.” ’ [Citation.]” (Maranatha Corrections, LLC v. Department of
Corrections & Rehabilitation (2008) 158 Cal.App.4th 1075, 1085 (Maranatha).)
Here, from the evidence presented in connection with the special motion to strike,
the timeline was as follows: (1) Shen’s DLSE claim was filed on or about June 29, 2009;
(2) there was a hearing set for March 23, 2010; (3) the parties resolved the claim on
March 23, 2010 at the DLSE offices, immediately prior to the hearing;4 (4) the settlement
was thereafter formally documented, and the wage settlement agreement was signed by
Ma Labs and by Shen on June 8 and 9, 2010, respectively; (5) Shen’s counsel notified the
DLSE by fax on June 8, 2010, that the matter had been resolved; and (6) the DLSE issued

4
There is a discrepancy in the record regarding the date of the DLSE hearing and
oral settlement of Shen’s administrative claim. Shen declared that she “recall[ed]” that
the hearing and oral settlement occurred in late May 2010. Attorney Musto, who
represented Ma Labs in that matter, indicated it was settled on or about May 23, 2010,
with the formal agreement signed on or about June 6, 2010. And the complaint alleges it
was settled on or about May 23, 2010. In his declaration in opposition to the motion to
strike, Musto identified the date as March 23, 2010, and supported that date with an email
exhibit. While it appears the true date was March 23, 2010, the discrepancy is not
material to our analysis.

15
a formal dismissal of the proceedings on June 9, 2010. Thus, as of the fall of 2010—
when Ma Labs alleges in its complaint that Shen breached the confidentiality provisions
of the agreements, there was nothing pending before the DLSE. Accordingly, Shen’s
alleged statements about the DLSE claim and settlement did not represent “issue[s] under
consideration or review” before the DLSE. (§ 425.16(e)(2); see Neville v. Chudacoff
(2008) 160 Cal.App.4th 1255, 1270 [statements protected under section 425.16(e)(2) if
they “are made ‘in connection with’ pending or anticipated litigation”].)
Applied Business Software, Inc. v. Pacific Mortgage Exchange, Inc. (2008)
164 Cal.App.4th 1108 (Applied Business), cited by Ma Labs, is instructive. There, the
parties had entered into a written agreement to settle a federal copyright lawsuit, and that
suit was dismissed. (Id. at p. 1111.) The agreement provided that the defendant licensee
(Pacific) would cease using the plaintiff licensor’s (Applied’s) software, and the
defendant would certify the software had been deleted from its computers and that it had
returned all physical copies of the software to the plaintiff. (Id. at p. 1112.) After the
defendant had allegedly failed to provide the proper certifications and had used plaintiff’s
software without authorization, the plaintiff filed a state court action alleging claims for
breach of the settlement agreement and for specific performance. (Id. at pp. 1112-1114.)
The defendant filed a special motion to strike the complaint. (Id. at p. 1114.) The trial
court denied the motion and the defendant appealed.
The appellate court affirmed. It analyzed the “protected activity” prong of the
defendant’s anti-SLAPP motion as follows: The “[d]efendant’s acts on which [the]
plaintiff’s complaint is based are defendant’s alleged failure to provide the certification
called for in the settlement agreement, and defendant’s alleged use of plaintiff’s software
after the time set out in the settlement agreement for ceasing use of it. Neither of those
alleged actions by the defendant can reasonably be said to have been taken by defendant
in furtherance of its right of petition or free speech in connection with a public issue.”
(Applied Business, supra, 164 Cal.App.4th at p. 1117.) Moreover, the court rejected the
defendant’s position that simply because the suit involved a settlement agreement, it

16
thereby was one “arising from” the defendant’s protected activity. (Ibid.) The court held
that “[u]nder the explanatory provisions in subdivision (e) of section 425.16, defendant’s
entering into the settlement agreement during the pendency of the federal case was
indeed a protected activity, but defendant’s subsequent alleged breach of the settlement
agreement after the federal case was concluded is not protected activity because it cannot
be said that the alleged breaching activity was undertaken by defendant in furtherance of
defendant’s right of petition or free speech, as those rights are defined in section 425.16.”
(Id. at p. 1118, italics added.)
Shen’s alleged statements made months after the disposition of her claim filed
with the DLSE were not protected under section 425.16(e)(2) because they did not
concern “issue[s] under consideration or review.” Accordingly, applying the reasoning in
Applied Business, Shen has not established that the claims in the first, second, and fourth
causes of action arose out of her protected speech activity.

C. Ma Labs Has Shown Its Claims Have Minimal Merit
Because we have concluded that Shen’s alleged underlying conduct was not
protected under the anti-SLAPP statute, we would ordinarily eschew discussion of the
second “merits” prong. (See, e.g., Applied Business, supra, 164 Cal.App.4th at pp. 1118-
1119.) But even if we were to consider Shen’s new argument on appeal, and even
assuming we agreed that her statements were protected under the first prong of the anti-
SLAPP analysis, we would still affirm the order denying the motion to strike because Ma
Labs has shown a probability of prevailing on its claims.
To defeat Shen’s anti-SLAPP motion under the second prong of the analysis, Ma
Labs “ ‘must demonstrate that the complaint is both legally sufficient and supported by a
sufficient prima facie showing of facts to sustain a favorable judgment if the evidence
submitted by [them] is credited.’ [Citations.]” (Wilson v. Parker, Covert & Chidester
(2002) 28 Cal.4th 811, 817 (Wilson), superseded by statute on other grounds as noted in
Hutton v. Hafif (2007) 150 Cal.App.4th 527, 547; see also Briggs, supra, 19 Cal.4th at

17
p. 1121.) Here, Shen does not challenge the sufficiency of the complaint, and we
conclude the complaint is legally sufficient. We thus need only address whether Ma Labs
made a prima facie showing in support of its contract claims; that is, whether it
established that (1) the parties entered into the agreements; (2) Ma Labs performed under
the agreements or was excused from performing under them; (3) Shen breached the
agreements; and (4) Ma Labs was damaged as a result of Shen’s breaches. (See Hamilton
v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614.) It is the
question of whether Shen breached the confidentiality provisions of the two agreements
that is the chief issue in dispute. And we note the fact that speech is involved does not
provide Shen with immunity from suit under the anti-SLAPP statute. As the California
Supreme Court has held: “[A]s the [anti-SLAPP] statute is designed and as we have
construed it, a defendant who in fact has validly contracted not to speak or petition has in
effect ‘waived’ the right to the anti-SLAPP statute’s protection in the event he or she later
breaches that contract.” (Navellier, supra, 29 Cal.4th at p. 94; see also Sanchez v. County
of San Bernardino (2009) 176 Cal.App.4th 516, 528 [First Amendment free speech rights
may be waived by contract].)
Because Shen admitted in her declaration that she signed the agreements, we need
not address the first element of a breach of contract case (i.e., the existence of an
agreement). Likewise, Shen presents no argument negating the second element—that Ma
Labs performed under the agreements or was excused from performance under them.
While Shen asserted below that Ma Labs, not she, breached the confidentiality clauses of
the two agreements5—an assertion to which Ma Labs responded by submitting several
declarations of company officers and employees stating they did not make any

5
Because the confidentiality provisions of the severance agreement (unlike the
wage settlement agreement) imposed a unilateral obligation upon Shen—i.e., they did not
contain language requiring Ma Labs to keep the settlement confidential—it is uncertain
whether Shen could properly claim the company breached a confidentiality obligation
with respect to the severance agreement.

18
disclosures concerning the settlement—she did not argue, and does not argue on appeal,
that Ma Labs did not satisfy this second element of its contract claim. Shen has therefore
forfeited any such contention. (See Paulus, supra, 139 Cal.App.4th at p. 685 [appellate
court does not address argument addressed at trial level in support of anti-SLAPP motion
where it is abandoned on appeal].)
As demonstrated by the papers filed in support of and in opposition to the motion
to strike the complaint, the chief issue in dispute was Shen’s alleged breaches of the
confidentiality provisions of the agreements. Shen declared that she “never violated [her]
promise not to speak about the terms of the settlement” of the wage claim. She also
declared that she never violated the terms of the severance agreement.
In opposition to the motion, Ma Labs submitted the declaration of Lok San
(Susanna) Lou (Lou declaration). Lou declared that Shen had told her she was suing Ma
Labs. Sometime in 2010, Shen told Lou “she’d won the lawsuit . . . . She also said that
she did not come to talk to [Lou] about the lawsuit with the Company, since she’d
already won.”
Ma Labs submitted additional evidence in support of its claim that Shen breached
the confidentiality provisions of the two agreements. This included several declarations
by company executives and employees—Abraham Ma, Christine Roa, Richard Chou,
Guo Lin Hu—that each of them had heard near the end of 2010 (i.e., after execution of
the agreements) that other employees had learned about Shen’s settlement with the
company and the dollar amount of that settlement. And two of these employees (Ma and
Rao), as well as Christy Yee (human resources/payroll manager), Helen Guan (human
resource manager), and Vivian Yu (senior accounting manager)–– the employees at Ma
Labs who knew about the settlement agreements––each declared that he or she did not
disclose to anyone the disposition of that case, or the terms of (or even the existence of)
the settlement agreements. These declarations support, by the process of elimination, that
it was Shen who breached the confidentiality provisions of the settlement agreements.

19
 Ma Labs also presented evidence—interrogatory responses submitted by five of
the plaintiffs in the Tian litigation—indicating that they had learned that a worker (whom
some of the plaintiffs identified as Shen) had brought a claim or suit against Ma Labs and
had won the case. Some of these plaintiffs indicated that one of their attorneys, Litton,
had represented Shen. Further, Ma Labs submitted copies of declarations filed in the
Tian litigation by two employees indicating they had been told that Shen had settled her
case with Ma Labs and had received a specific amount ($7,000) as a result.
Shen filed written objections to all of the above-described evidence submitted by
Ma Labs, and her counsel requested a ruling on them at the hearing on the motion. The
court below failed to rule on the objections, holding that the objections “do not serve as a
basis for this ruling. With regard to the first, second, and fourth causes of action, the
Court does not reach the evidentiary prong of the anti-SLAPP analysis.” Thus, Shen
preserved her evidentiary objections, notwithstanding the court’s failure to rule on them.
(See Reid v. Google, Inc. (2010) 50 Cal.4th 512, 532-532 (Reid) [evidentiary objections
made in writing or at hearing on summary judgment motion preserved].)
On appeal, Shen argues there was no admissible evidence presented that she
breached the confidentiality provisions of the agreements. Because only evidence that
would be admissible at trial may be presented in connection with the plaintiff’s showing a
probability of prevailing on its claims (Cross v. Cooper (2011) 197 Cal.App.4th 357,
370; Evans v. Unkow (1995) 38 Cal.App.4th 1490, 1497-1498), we consider Shen’s
evidentiary objections here. Because we deem pivotal the statements made in the Lou
declaration, our focus will be upon Shen’s evidentiary objections to that declaration.
Although appellate courts review de novo whether the two prongs necessary for
granting a special motion to strike have been satisfied, review of rulings on evidentiary
objections are reviewed for abuse of discretion. (Hall v. Time Warner, Inc. (2007)
153 Cal.App.4th 1337, 1348, fn. 3.) At least one court has held—based upon applying
the holding in Reid, supra, 50 Cal.4th at page 534, which concerned evidentiary
objections in summary judgment motions—that if the trial court fails to rule on

20
evidentiary objections in a special motion to strike, it is presumed that the objections
have been overruled. (Zucchet v. Galardi (2014) 229 Cal.App.4th 1466, 1480, fn. 7
(Zucchet).) We find this proposition debatable, because Reid’s holding was based upon
the summary judgment statute that specifically references evidentiary objections (see
§ 437c, subd. (c) [in ruling on motion, “court shall consider all evidence set forth in the
papers, except that to which objections have been made and sustained by the court”]),
while section 425.16 makes no mention of evidentiary objections. But regardless of
whether we review the trial court’s presumed overruling of objections for abuse of
discretion or address the objections to the Lou declaration in the first instance, we find
the evidence admissible.
Shen objected on the grounds of “[s]peculation, vague and ambiguous, lacks
foundation, [and] hearsay without an exception” to three separate statements within Lou’s
declaration: (1) “[Lou] was aware that Bing Shen was suing the Company because she
had told [Lou] that before [Shen] asked for leave”; (2) at some time in 2010, Shen talked
with Lou in the lunchroom and “[Shen] said she’d won the lawsuit”; and (3) in the same
conversation, “[Shen] also said that she did not come to talk to [Lou] about the lawsuit
with the Company, since she’d already won.” Shen also objected to the prefatory
statement concerning the timing of Lou’s above-described conversation with Shen—“At
some point in 2010, Bing Shen came to talk to me”—on the grounds of “[s]peculation,
vague and ambiguous, lacks foundation, [and] irrelevant.”6
Shen’s objections are without merit. The hearsay objections to Lou’s declaring
what Shen told her—that she was suing Ma Labs and (later) that she had won the
lawsuit—are not hearsay because they were not “offered to prove the truth of the
matter[s] stated.” (Evid. Code, § 1200, subd. (a).) The declaration was not offered to

6
Objections to other portions of the Lou declaration are not mentioned here,
because those portions of the declaration are not essential to our disposition of this
appeal.

21
prove that Shen had sued Ma Labs or that she had “won” the lawsuit. Rather, it was
offered to show that Shen had made the statements to Lou, whether or not they were true.
(See, e.g., People v. Alexander (2010) 49 Cal.4th 846, 908 [defendant’s requests for
information about witness and his message to witness to “ ‘stay strong’ ” not inadmissible
hearsay; evidence was not offered for its truth, but to show “the fact that defendant made
the statements”].) Indeed, were Shen’s hearsay position viable, it might be impossible for
Ma Labs to establish breaches of the confidentiality provisions of the agreements unless
Shen herself admitted the breaches.
We likewise find no merit to Shen’s objections to the Lou declaration based upon
lack of foundation, speculation, vagueness, ambiguity, and relevance. Although Shen
argues that the Lou declaration “is so impermissibly vague as to make it . . . worthless,”
we disagree. Shen asserts that the timing of her alleged statements referenced by Lou is
uncertain, and that they could have occurred before her dispute with the company was
even settled. She also claims the reference to “ ‘the lawsuit’ ” is ambiguous. But on its
face, the declaration may be reasonably construed as Shen having told Lou, after the
conclusion of her dispute with the company, that she had prevailed. Matters of
pinpointing the exact timing of the conversation and what Shen meant by her statements
to Lou are ones that may be left to cross-examination of Lou at trial. The content of the
Lou declaration is not so ambiguous or vague as to warrant it being excluded. And the
foundation of Shen’s statements is established. Lou indicated that Shen had spoken to
her in the lunchroom sometime in 2010. Shen “said she’d won the lawsuit,” and then
reiterated that she “had already won.” (Italics added.) Lou also stated that Shen had told
her in that conversation that “she was not happy working for the Company to explain . . .
why she had decided not to return to work.” Lou thus provided additional context to her
conversation with Shen, providing foundation for Ma Labs’ claim that the conversation
constituted breaches of the confidentiality provisions of the agreements.
There was thus admissible evidence presented by Ma Labs supporting Shen’s
breaches of the confidentiality provisions. And the additional evidence presented from at

22
least four executives and employees of Ma Labs that they were not responsible for
leaking information about the company’s settlement with Shen—coupled with significant
evidence that a number of people became aware, after the conclusion of her case, that
Shen had settled with Ma Labs—constituted circumstantial evidence of the breach of the
agreements. (See Hasson v. Ford Motor Co. (1977) 19 Cal.3d 530, 548 (Hasson)
[circumstantial evidence that is relevant is admissible; fact that it is circumstantial does
not preclude it from being “ ‘substantial’ ”], overruled on another ground in Soule v.
General Motors Corp. (1994) 8 Cal.4th 548, 572; HMS Capital, Inc. v. Lawyers Title Co.
(2004) 118 Cal.App.4th 204, 218 (HMS Capital) [holding plaintiff made prima facie
showing in opposing anti-SLAPP motion through circumstantial evidence establishing
malice element of malicious prosecution claim].) While we recognize that Shen
presented significant competing evidence that she did not disclose anything about her
disputes with Ma Labs that would have constituted breaches of the confidentiality
provisions of the agreements, at this juncture we must accept as true the evidence that is
favorable to the plaintiff. (Soukup, supra, 39 Cal.4th at p. 269, fn. 3, 291.) We do not
weigh the evidence or assess credibility in disposing of a special motion to strike under
section 425.16; we consider the defendant’s evidence to determine whether as a matter of
law it defeats the plaintiff’s claims. (1-800 Contacts, Inc. v. Steinberg (2003) 107
Cal.App.4th 568, 585.) Based upon the evidence presented, Ma Labs made a prima facie
showing of breaches of the confidentiality provisions to support the court’s order relating
to the first, second, and fourth causes of action.7
Lastly, Shen contends that Ma Labs did not present evidence as to damages. She
argues there was no “proof presented by Ma Labs . . . that Shen convinced anyone to

7
We acknowledge there was a significant amount of additional evidence presented
by Ma Labs to make its showing, through circumstantial evidence, that Shen breached the
confidentiality provisions of the settlement agreements. Shen objected to that additional
evidence. Because we determine the Lou declaration is sufficient to establish a prima
facie case, we need not address Shen’s objections to this additional evidence.

23
assert their [sic] own claims against Ma Labs.” To the contrary, Ma Labs presented
evidence that its president, Abraham Ma, and its chief executive officer, Christine Rao,
both considered the confidentiality provisions of the agreements to be material terms, and
they would not have authorized settlement had they known that Shen or her
representatives did not intend to abide by their confidentiality terms.
In addition, Mark Musto, counsel for Ma Labs, who negotiated the settlement of
the DLSE wage claim and the overtime claim, declared that (1) Shen’s agreement to
confidentiality “was a fundamental and material element of the [prior] oral settlement” of
the wage claim; (2) “[t]he predicate for th[e] second settlement was the confidentiality of
both agreements[,] including their existence, terms, and any payments made thereunder”
(original underscoring); and (3) notwithstanding the confidentiality provisions of the two
agreements, five of the plaintiffs in the Tian litigation had served answers to
interrogatories establishing that they and their attorneys had been informed that Shen had
“ ‘won her case,’ ” that she had been represented by Litton, and that they had learned
this information after they had been terminated (i.e., after execution of the two
agreements by Shen). (Original bold.) Musto also declared that Ma Labs (1) had not
received the benefit of its bargain because of Shen’s breaches of the confidentiality
provisions of the agreements, (2) had been required to defend itself in the Tian litigation,
and (3) had incurred other related expenses.
Moreover, there was evidence presented in the form of plaintiffs’ responses to
interrogatories in the Tian litigation that bear on the question of damages. Those
responses include statements by one or more Tian plaintiffs that (1) they were aware that
Shen, represented by their counsel (Litton), had filed a claim against Ma Labs with the
Labor Commissioner and had “won”; (2) part of the “background” leading to the
termination of their employment was Shen’s claim against the company, which she won,
in part, because the company did not have adequate pay records; and (3) Shen was a
witness to company practices relevant to their claims. The evidence submitted by Ma
Labs thus established that the confidentiality provisions of the agreements were material

24
terms, and it provided circumstantial evidence of a causal link between Shen’s alleged
breaches of these provisions and damage to Ma Labs. That damage included, among
other things, having to defend the Tian litigation. (See Hasson, supra, 19 Cal.3d at
p. 548; HMS Capital, supra, 118 Cal.App.4th at p. 218.)8 Of course, Ma Labs may be
required to demonstrate this link by showing that Shen’s alleged disclosure was a
“substantial factor” in causing damage to the company, i.e., the initiation and prosecution
of the Tian litigation. (See Haley v. Casa Del Rey Homeowners Assn. (2007)
153 Cal.App.4th 863, 871.) But that is not a matter that need be proved at the early
stages of this action. (See, e.g. Manhattan Loft, LLC v. Mercury Liquors, Inc. (2009)
173 Cal.App.4th 1040, 1057-1058 [plaintiff made adequate showing of damages in
opposition to anti-SLAPP motion, through declaration of its manager stating that as result
of defendant’s conduct in filing lis pendens, plaintiff could not sell residential condo
units, and real estate market had declined, resulting in lost sales].)
D. Conclusion
Shen’s alleged statements about her DLSE claim and settlement were not
protected under section 425.16(e)(2). Because the wage claim had been settled and the
DLSE proceeding had been dismissed, Shen’s alleged communications did not concern
“issue[s] under consideration or review by a legislative, executive, or judicial body, or
any other official proceeding authorized by law.” (§ 425.16(e)(2).) Furthermore, after
consideration of the pleadings and the evidence presented, we conclude that Ma Labs
made a sufficient showing that its claims have “ ‘minimal merit.’ ” (Soukup, supra,

8
To the extent Shen objected below to this evidence (i.e., statements in Musto’s
declaration, and statements contained in interrogatory responses of Tian plaintiffs), she
does not renew her position here, and we deem such objections forfeited. (Paulus, supra,
139 Cal.App.4th at p. 685.) We have in any event considered Shen’s objections.
Assuming they were overruled by the trial court (see Zucchet, supra, 229 Cal.App.4th at
p. 1480, fn. 7), we find no abuse of discretion. Considering the objections in the first
instance, we would overrule them.

25
39 Cal.4th at p. 291.) Accordingly, the special motion to strike the first, second, and
fourth causes of action of the complaint was properly denied.
DISPOSITION
The order denying appellant Bing Shen’s special motion to strike the first, second,
and fourth causes of action of respondent Ma Laboratories, Inc.’s complaint pursuant to
the anti-SLAPP statute is affirmed.

26
 Márquez, J.

WE CONCUR:

Bamattre-Manoukian, Acting P.J.

Grover, J.