SACRAMENTO, Calif. – A state appeals court yesterday overturned a lower court ruling and directed the dismissal of a defamation suit against a credit union CEO who passed on negative information about one of his former managers seeking a job at a nearby credit union.
In its ruling, the Court of Appeals of California, said the information provided by Eagle Community CU’s President William Birnie to Altura CU President Mark Hawkins about Moritz Wohamka at the behest of NCUA was covered under the state’s so-called Anti-SLAPP statute, which protects the exercise of free speech.
Several states have adopted anti-SLAPP laws which bar strategic lawsuits against public participation-often defamation or libel suits aimed at slapping down political dissenters or public critics.
In this credit union case, Wohanka was terminated by Eagle Community CU in May 2009, then hired the following year, June 2010, by Altura CU as its chief financial officer. Because Altura was under a supervisory order by NCUA at the time, its President Mark Hawkins had to get NCUA approval for all senior management hires and notified NCUA of his intent to hire Wohanka.
After Linda Thompson, NCUA’s director of special actions, directed Altura’s Hawkins to delve more into the manner of Wohanka’s dismissal at Eagle Community, NCUA rejected Wohanka’s application work at Altura. “:After reviewing your application, the credit union's due diligence process in making the selection, and the accounting and financial performance at your previous employers, we are denying your application to serve as Chief Financial Officer for Altura CU,” wrote NCUA in a July 27, 2010 letter to Wohank. “In particular, our review of the examinations during your tenure at Eagle Community CU found continuous accounting and financial management concerns. Given the credit union's troubled condition, we must ensure that the management leadership has demonstrated the highest level of performance and problem resolution."
Wohanka filed a request to NCUA for reconsideration, which was subsequently denied, and filed suit against his former employers Eagle Community CU and its president William Birnie for interfering in his hiring.
In overturning a lower court ruling in Wohanka’s favor, the state appeals court said that Birnie’s statements to Altura’s Hawkins and to NCUA were part of the valid regulatory review process and did not violate Wohanka’s rights, as he alleges in his suit. “Clearly, Birnie's protected communications to Hawkins were not "merely incidental" to any unprotected conduct,” ruled the court, which directed the case remanded to the lower court with a ruling dismissing the suit.
