Unprotected Speech Leads to Reversal of Wrongful Discharge Verdict

In 1992, the Trustees of the Logan Hospital and Medical Center Authority began to discuss who would manage and operate the county-owned hospital. Several of the hospital's department managers wrote and signed a self-styled resolution expressing their support of the existing hospital management company. The resolution stated:

On behalf of the managers listed below, representing their respective departments,let it be resolved that we the undersigned voice our opinion in approval of retaining the current management contract with Quorum Health Care Resources, Inc. We have signed this document freely and at our own will to provide the Board of Trustees of Logan Hospital and Medical Center our input for the future growth and stability of the hospital.

Despite the fact the managers preferred the old management company, the Trustees entered into a contract with Baptist Healthcare of Oklahoma (BHO) to manage the hospital.

Despite BHO's best efforts, the hospital continued to have severe financial problems. In 1993 the administrator and CFO became concerned that the hospital would not be able to make payroll. In order to alleviate part of the financial burden, the hospital administrator decided a reduction in force (RIF) was necessary. He asked the department managers to submit reports detailing how their work force could be scaled back through reductions in hours and reductions in staff. After receiving the department managers' suggestions, the administrator decided one of the people who would be let go was a department manager who had been employed by the hospital for more than fifteen years. The administrator determined he could absorb most of the department manager's duties and assign the rest of the duties to clerical employees. Coincidentally, the department manager was one of the managers who had signed the resolution favoring the former management company more than a year earlier.

Because the manager had access to sensitive information regarding the hospital and its employees, as well as the hospital's computer system, the administrator gave the terminated manager only "a few minutes to gather her things" and leave the hospital. The administrator also had the head of security watch the manager gather her things and escort her out of the building.

The manager sued the administrator, a former administrator and BHO. Among other things, she claimed her termination was in retaliation for her support of the former management company and therefore violated her First Amendment right to free speech.

Results at Trial. At trial, the jury was clearly incensed by the way the termination of the 15-year employee was handled. Further, the plaintiff's attorney skillfully attacked the administrator's paper-trail supporting the RIF decision and was able to show the jury that the administrator failed to follow the employee handbook in making or carrying out his RIF decision. As a result, the jury found the administrator and BHO liable for the manager's termination and awarded her more than $250,000 in actual and punitive damages, plus attorneys' fees and litigation costs.

Appeal Court Reversed. On appeal, the jury verdict was reversed and judgment entered in favor of the defendants. The appellate court found the manager did not have a legal basis upon which she could dispute her termination. In other words, the court found the managers' resolution did not deserve the protection of the First Amendment.

For a governmental employee's speech to be constitutionally protected, the court must find (1) the speech related to matters of public concern and (2) the employee's right to speak outweighs the governmental employer's right to control its employees. It is not enough that the topic is one which might be of general interest to the public. Rather,what is actually said on the topic must be of concern to the public. The focus of the court's inquiry is whether the public is likely to be truly concerned with or interested in the particular expression, or whether it is more properly viewed as essentially a private matter between employer and employee. In examining whether the manager's resolution was a matter of public concern sufficient to support a claim under the First Amendment, the Tenth Circuit Court of Appeals described the resolution as "a bald, unadorned and nonspecific endorsement" of one company. The Court wrote that the resolution did not expose "government ineptitude, waste or corruption." More important, the resolution did not state reasons, arguments or facts which supported the manager's opinion. Therefore, the Court found the resolution was not worthy of the protection afforded by the United States Constitution and overturned the jury verdict.

Lessons to Remember. A public employer cannot retaliate against an employee who exposes government waste, ineptitude, or corruption. An employer is not, however, restrained by an employee's unsupported expressions of personal opinion. As this case demonstrates, the First Amendment only protects speech that enables members of society to make informed decisions about the operation of their government. The First Amendment does not require a public office to be run as a roundtable for employee complaints over internal office affairs.

The jury verdict, even though it was overturned, reminds us of several important points concerning employment decisions: (1) The Golden Rule. Treat employees who are the subject of an adverse employment decision the way you would want to be treated - with dignity, respect, and empathy. (2) If a handbook exists, follow it. Although no law forces an employer to have a handbook or to follow its employee handbook in all circumstances, a jury composed almost entirely of employees will believe that if a personnel policy was written and distributed to employees, it should be followed by the manager when making personnel decisions. (3) Document, document, document. If a RIF or other employment decision is important enough to be made, it is important enough to clearly document the facts and numbers supporting the decision.