The costs of agencies: Waters v. Churchill and the First Amendment in the administrative state.

• Author: Roosevelt, Kermit
• Position: Case Note

In 1987, Cheryl Churchill lost her job for criticizing her employer. Churchill was a public employee holding a probationary nursing position in the obstetrics department of McDonough Hospital in Macomb, Illinois. Alleging that the termination violated her First Amendment rights, she sued the hospital and her supervisor, Cynthia Waters, in federal court. In 1994, her case reached the Supreme Court.(1) The Court held that First Amendment analysis should be applied not to Churchill's actual speech but to what the hospital administrators might reasonably have thought she said.(2) Because that speech "may have substantially dampened" a fellow employee's interest in working for the obstetrics department,(3) the Court explained, it was sufficiently disruptive to fall outside the bounds of First Amendment protection. Regardless of what Churchill had actually said, if the administrators were sincere and reasonable in their belief, they were entitled to summary judgment.(4)

Waters represents the Supreme Court's latest word on the First Amendment rights of government employees. The Court's treatment of this area of First Amendment law has received a fair amount of scholarly attention, and Waters itself has been criticized for the way in which it distributes power in the employer-employee relationship.(5) Certainly it is true that after Waters, government employers enjoy greater freedom in terminating employees based on speech. Academic critiques, however, have by and large accepted the Court's concept of efficiency and its characterization of the competing interests in Waters.(6) Such critiques are thus left to dispute the judgment of the hospital administrators, and they rely mostly on the contention that employee speech can contribute to workplace efficiency. As an empirical claim about effective management techniques, this argument can be addressed properly only to managers; to judges it is simply an invitation to usurp managerial discretion.(7)

This Note argues that the prevailing focus on Waters's effects in the workplace is misguidedly narrow and leaves the crucial issues unexamined. It contends that at stake in Waters is not merely the relationship of the individual employee to the government, nor the government's ability to manage the workplace. Implicated in the Court's analysis, and affected by its ruling, are fundamental concerns about the relationship between the citizen and the government in general, about the scope of the democratic political process, and ultimately about the possibility for public oversight and control of the growing administrative state.

Proper development of these larger issues requires considerable excavation. Part I of the Note discusses the facts of the Waters case and the resulting state of the law. It examines the Court's reasoning to uncover the conception of government that motivates the decision and concludes that the Court employs a model in which governmental managers have broad discretion to limit individual liberty in pursuit of governmental efficiency. Part II employs the agency theory developed in corporate law to suggest that the Court's attempt to promote efficiency by deferring to managerial judgment is theoretically misguided. Part III broadens the analysis by questioning the Court's portrayal of Waters as a conflict simply between individual liberty and governmental efficiency. It suggests that the Court's libertarian understanding of the First Amendment gives insufficient weight to the value of self-governance. Part IV argues that self-governance is present in the Waters analysis, but hidden within the underanalyzed notion of governmental efficiency. This Part then articulates a more complex understanding of efficiency, which reveals that governmental efficiency comprehends not only the narrow instrumental interest recognized by the Court but also a broader societal interest in self-governance, both of which are served by employee speech. Part V then proposes an alternative to the current treatment of public employee speech that recognizes the deeper values at issue and accords them their proper weight.

1. WATERS V. CHURCHILL

   1. The Facts

      The facts of Waters are disputed. Because the case reached the Court on Waters's motion for summary judgment, Churchill's version is assumed to be the correct one. She described a growing conflict with her supervisor, Cynthia Waters, stemming from Churchill's "opposition to the hospital's improper implementation of a nurse cross-training program."(8) Churchill felt that the program as implemented "was detrimental to the welfare of patients in the obstetrical ward";(9) to her, it interfered with proper patient care and endangered patients. She found an ally in Doctor Thomas Koch, the clinical head of obstetrics. Dr. Koch blamed inadequate staffing in obstetrics for the birth of a stillborn baby. Churchill further antagonized Waters by supplying Dr. Koch with information he would otherwise not have been able to obtain about the assignment of inexperienced nurses to the obstetrics ward, thereby assisting him in "his campaign for improved and acceptable nursing care."(10)

      On January 16, 1987, during her dinner break, Churchill had a conversation with Melanie Perkins-Graham, a cross-trainee. Churchill claimed that the substance of the conversation, which took place in the break room, consisted of her expressions of concern about the cross-training program and its effect on patient care. She denied making any personal criticism of Waters. Her version of the conversation was substantiated at trial by two witnesses who had overheard the conversation. However, Mary Lou Ballew, another nurse who allegedly overheard the conversation, reported to Waters that Churchill had been criticizing the hospital administrators. Perkins-Graham, in a subsequent meeting with Waters, confirmed Ballew's version. Based on these reports, the hospital administrators fired Churchill.

      Churchill was an at-will government employee, meaning that she could be fired for any reason or for no reason at all.(11) Even at-will employees, however, may not be fired for a reason that infringes upon constitutionally protected rights.(12) The extent of public employee First Amendment rights is governed by a line of cases starting with Pickering v. Board of Education.(13) In Pickering, a schoolteacher was fired for writing a letter to the editor of a local paper criticizing the school board's funding policies. In holding his dismissal unconstitutional, the Court described the judicial task in such cases as striking "a balance between the interests of the [employee], as a citizen, in commenting upon matters of public concern and the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees."(14)

      The Court revisited the Pickering balancing test in Connick v. Myers.(15) Connick dealt with an employee of the New Orleans District Attorney's office fired for distributing an office questionnaire concerning transfer policies, office morale, the handling of grievances, employee confidence in supervisors, and pressure to work on political campaigns. Upholding her dismissal, the Court refined the Pickering test by making the question of whether the employee's speech was on a matter of public concern a threshold inquiry: No liability could exist for firing an employee on the basis of speech not on a matter of public concern. If the speech was on a matter of public concern, termination could still be justified if the speech posed a threat of disruption.(16)

      The outstanding question resolved by Waters was whether the Connick inquiry should be based upon the actual facts of the case or on what the employer reasonably believed.(17) Justice O'Connor, writing for a plurality of four, noted that "employers, public and private, often do rely on hearsay, on past similar conduct, on their personal knowledge of people's credibility, and on other factors that the judicial process ignores."(18) Courts should not subject an employment decision to review on the facts as determined by a judicial proceeding: "What works best in a judicial proceeding may not be appropriate in the employment context."(19)

      The Court thus concluded that if the administrators had really believed the account of the conversation provided by Ballew and Perkins-Graham, the firing was justified as a matter of law because "Churchill's speech may have substantially dampened Perkins-Graham's interest in working in obstetrics."(20) This was sufficiently disruptive to outweigh her interest in speaking even if her speech was on a matter of public concern.(21) Since the potential for disruption was dispositive, the Court did not reach the question of whether Churchill's speech (as reported to the administrators) actually was on a matter of public concern.(22)

   2. The Result

      Following Waters, government employers enjoy very broad discretion in firing at-will employees for speech. Such employees may be fired for speech not on a matter of public concern; even speech within this category justifies termination if it poses a threat of disruption--a determination which the employer makes and to which courts grant substantial deference. Finally, the court's deferential analysis is to be applied not to the actual speech but to what the employer reasonably believed was said, a procedural innovation of no small significance.

      From the perspective of traditional First Amendment theory, this legal regime is quite odd. By the standards of ordinary First Amendment praxis, the Waters rule is clearly unconstitutional.(23) As a content-based restriction,(24) it is presumptively invalid(25) and would receive strict scrutiny: The government would be required to show "that its regulation is necessary to serve a compelling state interest and that it is narrowly drawn to achieve that end."(26) Under strict scrutiny, this rule would certainly fall; apprehensions of disruption and reduced...