Federal appeals panel throws out jury verdict in retaliation case

Thursday, June 1, 2000

Two former employees of the Gary, Ind., law department, who alleged they were retaliated against for speaking out against racism on the job, lost their First Amendment case before a federal appeals court panel.

Cynthia Taylor, a former attorney in the office, and Rebecca Smith, a paralegal, contended that Margaret Felton, the former city attorney, discriminated against them on the basis of race. Felton is white, while Taylor and Smith are black.

Taylor and Smith alleged that once they complained about Felton as a manager, Corporation Counsel Hamilton Carmouche singled them out for retaliation because of their comments.

Taylor and Smith filed internal grievances. Taylor also wrote a letter to the Department of Labor, alleging racism. Both women were discharged in late 1994. They sued in federal court in 1996, contending that they had been fired because of their critical speech about Carmouche and Felton.

A federal magistrate dismissed portions of the plaintiffs’ claims in July 1998, finding that many of Taylor’s and Smith’s comments concerned internal personnel matters.

In December 1998, a federal jury awarded Taylor $80,000. However, federal magistrate Andrew Rodovich awarded Carmouche a new trial, finding that there was not enough evidence for the jury to find retaliation.

On appeal, a divided three-judge panel of the 7th U.S. Circuit Court of Appeals reversed the jury award in Taylor v. Carmouche, finding that the plaintiffs “were protesting in their capacity as employees, not in their capacity as citizens.”

The panel majority cited the U.S. Supreme Court’s 1994 public employee free-speech case Waters v. Churchill: “The government’s interest in achieving its goals as effectively and efficiently as possible is elevated from a relatively subordinate interest when it acts as sovereign to a significant one when it acts as employer.”

The panel majority determined that Carmouche and Felton acted “in their capacity as supervisors of the Law Department rather than as regulators of private speech.”

Judge Williams dissented, finding that the “plaintiffs’ protests were an effort to challenge racism in the City’s Law Department.”

“Assuming it is not related to a private dispute between the plaintiff and defendant, racism in a public agency is inherently a matter of public concern,” Williams said.

Carmen David Caruso, Taylor’s attorney, said a decision had not yet been made on whether to appeal the panel’s ruling. The defendants’ attorney was out of the office and unavailable for comment.