3rd Circuit upholds damages for fired public employee

Saturday, April 19, 2008

A former public employee who repeatedly wrote memos outlining various problems with his employer had his favorable jury verdict — including an award of punitive damages — upheld by a federal appeals court panel recently in DeLuzio v. Monroe County.

Michael DeLuzio worked as a caseworker for Monroe County (Pa.) Children and Youth Services from 1992 to 1999. In 1996, Sat Bahl became the agency’s administrator and DeLuzio’s boss. DeLuzio often clashed with Bahl on various matters. DeLuzio wrote numerous memos detailing problems with agency operations and with other caseworkers strategies for helping clients.

In 1997 and 1998, Bahl passed over DeLuzio for promotions. In the second instance, an employee who had been with the organization only two months was elevated to a position instead of DeLuzio. Undeterred, DeLuzio continued to write memos, including one about saving the agency’s Family Preservation unit.

In 1999, Bahl suspended DeLuzio without pay for his “daily barrage of ‘Memo’s’ demanding audiences, meetings, apologies, etc. [which had] become insubordination.” Later that year, Bahl fired DeLuzio.

DeLuzio sued Monroe County, Monroe County Children and Youth Services, Bahl and several other individuals in federal court in July 2000, advancing a total of 17 claims. Among these were two First Amendment retaliation claims advanced against Bahl — that he failed to promote DeLuzio and terminated him in retaliation for his protected speech.

A federal district court dismissed many of the claims, but in March 2005, the case went to trial before a jury on four claims: the two First Amendment retaliation claims, a procedural due-process claim and a conspiracy claim. The jury rejected the retaliation claim based on the failure to promote but ruled in favor of DeLuzio on the other three claims. The jury awarded DeLuzio a six-figure damage amount, including nearly $90,000 in back pay and an additional $40,000 in punitive damages against Bahl.

The defendants (Bahl and two other individuals) filed a motion for judgment notwithstanding the verdict. In a thorough opinion rendered in October 2006, the district court dismissed the procedural due-process and conspiracy claims. However, the district court upheld the jury verdict on the First Amendment retaliatory discharge claim and the punitive damage award related to this claim.

Bahl then appealed to the 3rd U.S. Circuit Court of Appeals, arguing in part that DeLuzio’s claim could not survive the U.S. Supreme Court’s 2006 decision in Garcetti v. Ceballos. In Garcetti, the Supreme Court ruled that public employees have no First Amendment protection for speech made as part of their official job duties. Bahl argued that DeLuzio’s claim — which was based on a series of memos — was job-related speech within the meaning of Garcetti.

However, the 3rd Circuit unanimously rejected Bahl’s argument and upheld the jury verdict. The 3rd Circuit held that DeLuzio survived Garcetti because his memos dealt with issues beyond his official job duties.

“DeLuzio’s speech was protected by the First Amendment,” Judge Michael Chagares wrote for the panel. “DeLuzio did not have professional responsibility, or ‘official duties,’ over any of the topics covered in his memos. His superiors’ problems with DeLuzio stemmed precisely from his frequent and unwelcome comments on matters that the supervisors felt were not within DeLuzio’s purview — such as the course of treatment for other caseworkers’ clients, or operating procedures that DeLuzio thought were harmful but was without power to change.”

The panel then proceeded to analyze DeLuzio’s retaliation claim under the test for public-employee speech articulated by the Supreme Court in Pickering v. Board of Education (1968) and Connick v. Myers (1983). Under the Pickering-Connick test, a public employee must show that his or her speech addresses a matter of public concern or importance rather than merely a personal grievance. If the employee speech does address a matter of public concern, then in a retaliation context, the Court in Garcetti instructed that “the question becomes whether the relevant government entity had an adequate justification for treating the employee differently from any other member of the general public.”

The 3rd Circuit panel noted that DeLuzio’s speech addressed the agency’s actions (or lack thereof) toward children and problems with the agency — obviously matters of high social importance. The appeals court also determined that Bahl did not have “an adequate justification” for treating DeLuzio differently from other members of the public. The panel concluded that the jury verdict should be affirmed on the retaliatory-discharge claim.

The attorneys for Bahl have appealed, and it will be interesting to see what happens further down the appellate process. Even more interesting will be whether other public employees will be able to avoid the long reach of Garcetti by successfully showing that their speech at work went beyond their official job duties. The 3rd Circuit opinion — if it remains good law — could prove to be a valuable precedent for other employees.