Contractor Wins Free Speech Debate Courts

Contractors who work for government agencies can speak out on public issues without reprisal, according to a ruling by the U.S. Supreme Court (Board of County Commissioners v. Um-behr, Docket No. 94-1654, June 28, 1996).

Keen Umbehr operates a trash hauling business in Kansas, where state law re-quires counties to manage solid waste disposal within their borders. In 1981, Wa-baunsee County contracted with Umbehr to haul residential trash for its cities, if each city endorsed and ratified the contract. No city was bound to do so, and any city could opt out with 90 days' notice. The contract was automatically renewed each year unless a party gave notice of renegotiation or termination was given.

Umbehr hauled trash on an ex-clusive basis for six of the seven ci-ties in the county from 1985 until the county terminated the contract in 1991. Throughout this period, Umbehr spoke out at county board meetings and wrote letters and columns in local newspapers on a variety of topics, including tipping fees, the cost of obtaining official documents, alleged open meetings law violations by the county board and alleged mismanagement of taxpayer money. He also ran unsuccessfully for election to the board.

Upset by Umbehr's criticisms, the county commissioners threatened to censor the official county newspaper for publishing his writings. After a failed attempt in 1990, the board, by a 2-1 vote, succeeded in terminating Umbehr's contract a year later. However, Umbehr managed to negotiate new contracts with five of the six cities he previously served.

In 1992, Umbehr sued the two majority board members in federal district court, claiming that they had terminated his contract in retaliation for his criticism of the county. Without hearing any evidence, the district court assumed that Umbehr lost the contract because of his comments and that he suffered a financial loss. Nevertheless, the court dismissed Umbehr's lawsuit, stating that "the First Amendment does not prohibit [the Board] from considering [Umbehr's] expression as a factor in deciding not to continue ... the trash hauling contract."

A federal appeals court, however, reinstated Umbehr's claim, ruling that an independent contractor enjoys First Amendment protection from retaliatory government action.

The Supreme Court agreed to hear the case to resolve the conflict among federal appeals court rulings on First Amendment protection for independent contractors.

In a 7-2 decision, written by Sandra Day O'Conner, the high court held that there is no constitutional distinction between independent contractors and government employees, who, under Supreme Court rulings extending back 20 years, enjoy First Amendment protection against political reprisal.

Under these precedents, an employee must prove that the speech was a substantial or motivating factor in the termination. But even if the employee has such evidence, the government still can escape liability by showing that it would have taken the same action no matter what the employee said.

Even termination because of protected speech can be justified "when legitimate countervailing government interests are sufficiently strong," the high court said. The balancing test gives considerable deference to the government's right to promote the effective and efficient delivery of public services without disruption from its employees, the opinion continued. "The similarities between government employees and government contractors with respect to this issue are obvious," said Justice O'Connor.

The high court's decision sends the case back to the federal district court, where Umbehr must demonstrate that "termination of his contract was motivated by his speech on a matter of public concern ... [requiring] him to prove more than the mere fact that he criticized the board members before they terminated him."

For its part, the county would then have a chance to show that it had reasons, besides Umbehr's speech, to terminate him or that the county's "legitimate interests" outweighed Umbehr's First Amendment rights.

Justice O'Connor stressed that the court's decision focused on a pre-existing commercial relationship between a government agency and an independent contractor, and did not address whether "bidders or applicants for new government contracts" had the same free speech rights.

In an emotional dissent, Justices Antonin Scalia and Clarence Thomas faulted the majority for its reliance on prior decisions that, in the dissenters' view, were wrong when they were decided and that in any event should not be extended.

"[L]ike rewarding one's allies," said Justice Scalia, "the correlative act of refusing to reward one's opponents ... is an American political tradition as old as the Republic."