Arnett v. Kennedy

Arnett v. Kennedy
N.D. Ill. 1972)
Holding
Post-termination procedures provided by federal agency adequately protected appellee's liberty interests and pretermination hearing was not constitutionally necessary; statute under which employee was fired neither impermissibly vague or overbroad to justify dismissal for speech alleging superior was accepting bribes. Northern District of Illinois reversed.
Court membership
Chief Justice Warren E. Burger Associate Justices William O. Douglas · William J. Brennan Jr. Potter Stewart · Byron White Thurgood Marshall · Harry Blackmun Lewis F. Powell Jr. · William Rehnquist
Case opinions
Plurality	Rehnquist, joined by Burger, Stewart
Concurrence	Powell, joined by Blackmun
Concur/dissent	White
Dissent	Douglas
Dissent	Marshall, joined by Douglas, Brennan
Laws applied
Lloyd–La Follette Act, U.S. Const. amend. I, U.S. Const. amend. XIV
Overruled by
Cleveland Board of Education v. Loudermill

Arnett v. Kennedy, 416 U.S. 134 (1974), was a United States Supreme Court case in which the Court rejected a nonprobationary federal civil service employee's claim to a full hearing prior to dismissal over charges he had brought the government into disrepute by recklessly accusing a superior of corruption. The governing federal law prescribed not only grounds for removal but also removal procedures. The employee could only be removed for "cause," but the procedures did not provide for an adversarial hearing prior to termination. The Court also rejected the respondent's claim that his First Amendment rights were violated.

The 6–3 decision was widely criticized by legal scholars for Justice

Justices Byron White and Thurgood Marshall disapprovingly quoted that line in their separate opinions (White concurring that Kennedy's First Amendment rights had not been violated but dissenting from the rest of the holding, while Marshall dissented entirely, joined by two other justices). Justice Lewis Powell, concurring with another justice, also rejected Rehnquist's theory. A later case, Logan v. Zimmerman Brush Co., held differently without explicitly overruling Arnett; in 1985's Cleveland Board of Education v. Loudermill, the Court held that public employees are entitled to some form of hearing before dismissal and formally rejected his "bitter with the sweet" formulation, with Rehnquist (by then Chief Justice) as the only dissenter. Some legal scholars have argued it should have been retained, or that the Court's subsequent disinterest in engaging this question has been to the detriment of its jurisprudence.

The First Amendment aspect of the holding—that the FFLA's provisions that covered employees could only be dismissed for "such cause as will promote the efficiency of the service" was neither

In 1971 Kennedy was suspended for 60 days after having, nearly a year earlier, advised members of a group that OEO had given money to that they should replace their board of directors completely. This violated OEO policy that its field representatives were not to in any way involve themselves in the internal affairs of the community groups the agency worked with. Johnson had already, according to the government, been warned about this after a previous incident; of several charges brought against him, this was the only one that was sustained after he wrote a lengthy written rebuttal.^[4]

In April 1972, three weeks after he had been informed of the suspension, further charges were brought against Kennedy, based on allegations he had accused the regional director of violating treaties in his dealings with some Native groups, and that another OEO official had violated the agency's conflict of interest standards by entering into a contract with an insurance agency her husband had an interest in. After he had received that notice, he then claimed at a union meeting that his superior had offered a $100,000 grant to a tribal official if that person would submit a written statement against Kennedy and another employee active in the union. These claims were reported in a newspaper article; Kennedy also held a press conference, with other union leaders, in the lobby of the building that housed OEO's headquarters where he made the same allegations and passed out copies of documents purporting to support those allegations.^[4]

Additional charges were brought against Kennedy. He was, per agency policy, again offered the chance to respond to them within 30 days either verbally or in writing. His entire response was to demand an adversarial hearing, and said the disciplinary proceedings in this instance violated his

The government had relied on Cafeteria & Restaurant Workers Union, Local 473 v. McElroy,^[7] in which the dismissal of a cook employed at a private concession stand on a naval facility after issues came out that led to the revocation of her security clearance, to support its argument that it could summarily dismiss employees. McLaren responded that "[t]he continuing vitality of this rule is seriously in question today owing to recent Supreme Court decisions in the due process area". In that particular case, he conceded, the national security interest may have allowed such decisive action, but it was not a factor in the instant case, and given that other federal agencies allowed their employees similar hearings it was unconstitutional for OEO not to.^[8]

McLaren agreed with Kennedy on the First Amendment claim as well. The language of the FFLA, that employees could only be disciplined for "such cause as will promote the efficiency of the service" was in his opinion so broad that "there can be little question that [OEO employees] will be deterred from exercising their First Amendment rights to the fullest extent." He allowed that OEO certainly could regulate its employees' speech, but at the same time enjoined the agency from enforcing any rules against speech under the FFLA's current construction.^[8]

The OEO was ordered to reinstate Kennedy and grant him full back pay, which it did. The government appealed the case directly to the Supreme Court, bypassing the Seventh Circuit. Since Alvin Arnett had taken over as OEO director by that time, his name was substituted for Sanchez's as the petitioner.^[4]

Oral argument

The Court heard oral argument in the case in November 1973. Daniel Mortimer Friedman, later to serve as a federal judge on the Court of Claims and Federal Circuit, argued for the government; Charles Barnhill argued for Kennedy. The National Association of Letter Carriers filed an amicus curiae brief urging affirmance.^[9]

Friedman spent most of his argument outlining the facts of the case and clarifying the procedures involved for the justices. Thurgood Marshall was particularly concerned by the absence of any requirement for a pretermination hearing. He asked if, were an employee to show up to work drunk, the government could fire him simply by writing him a letter. Friedman admitted that it was possible but that was not how things were done. "I know, but if you are wrong on this, you are in a little bit of trouble, aren't you?" Marshall responded; Friedman agreed.^[4]

Barnhill began by noting that since Kennedy had been reinstated, he had received positive evaluations and gotten another raise; the 60-day suspension had also been reversed, with back pay. Justice William Rehnquist asked him a question he had tried to get Friedman to answer: since the district court's grant of summary judgement required accepting all the facts the government had pleaded as true, did Kennedy accept them as such? Barnhill replied that since the adversarial hearing his client wanted had not yet been held, he considered the alleged misconduct to be merely charges, not facts, and thus irrelevant.^[4]

Later the justices questioned him closely on the argument that Kennedy had a property interest in his job, per

"I think the government's argument is very dangerous", Barnhill continued. "[T]here is no question that states and municipalities may take property ... and if the legislature were allowed to condition the taking of this kind of property on the basis of inadequate procedural safeguards, and that somehow composed a right of those persons, any property could be taken without due process." He added that 24 percent of dismissed employees are subsequently reinstated, arguing that proved the system did not adequately protect against wrongful terminations. "The government has no interest in this system as it stands now."[4]

Lastly Barnhill addressed the First Amendment claim. He pointed to previous lower court cases which had similarly found the CSC regulations overly broad and vague and called on the Commission to rewrite them. "The Administrative Conference of the United States (ACUS) has termed it an open invitation to arbitrary action." Friedman, given time to make a rebuttal argument, pointed to the regulation that forbade OEO employees from any action "affecting adversely the confidence of the public in the integrity of OEO and the government."^[4]

Opinion of the Court

In April 1974, the Supreme Court reversed. Six of the Justices found that the LLFA had created an expectancy of job retention requiring procedural protection under the Due Process Clause. Five of the Justices then concluded that the procedure given the plaintiff satisfied the requirements of due process. Furthermore, the Court concluded that post-termination procedures provided by the Commission and the OEO adequately protected appellee's liberty interest in not being wrongfully stigmatized by untrue administrative charges. Finally, the Court held the Lloyd-La Follette Act was not impermissibly vague or overbroad in its regulation of federal employee speech. Three justices dissented.^[9]

Rehnquist, joined by Chief Justice

In the 1947 case Fahey v. Mallonee,^[13] Rehnquist continued, the Court had "viewed skeptically the action of a litigant in challenging the constitutionality of portions of a statute under which it has simultaneously claimed benefits." He proclaimed that it was past time for the Court to start applying that consistently. "[W]here the grant of a substantive right is inextricably intertwined with the limitations on the procedures which are to be employed in determining that right," Rehnquist wrote, "a litigant in the position of appellee must take the bitter with the sweet ... the property interest which appellee had in his employment was itself conditioned by the procedural limitations which had accompanied the grant of that interest."^[14]

Post-termination proceedings, Rehnquist further held, would afford Kennedy an ample opportunity to clear his reputation from the charges. He also found the economic effect of the minimum three-month delay that Kennedy argued was likely in such an event not to reach the level of a due process violation, either. "We assume that some delay attends vindication of an employee's reputation throughout the hearing procedures provided on appeal, and conclude that at least the delays cited here do not entail any separate deprivation of a liberty interest."^[15]

Rehnquist further rejected Kennedy's contention, supported by the district court, that "such cause as will promote the efficiency of the service" was so

Justice Lewis Powell concurred in a separate opinion, joined by Justice Harry Blackmun. At the outset, he indicated his agreement with the plurality holding that the statute was neither vague nor overbroad. He also agreed that Kennedy's due process rights had not been violated, but on different grounds than the plurality.^[17]

In Roth and Perry, Powell reminded the plurality, the protected property interest both plaintiffs had been found to have in their continued public employment entitled them to constitutional due process protections. He did not find that reflected in Rehnquist's opinion. "The plurality opinion evidently reasons that the nature of appellee's interest in continued federal employment is necessarily defined and limited by the statutory procedures for discharge and that the constitutional guarantee of procedural due process accords to appellee no procedural protections against arbitrary or erroneous discharge other than those expressly provided in the statute", Powell wrote. "The plurality would thus conclude that the statute governing federal employment determines not only the nature of appellee's property interest, but also the extent of the procedural protections to which he may lay claim", a conclusion he said was at odds with Roth and Perry.^[17]

Indeed, it would lead directly to the conclusion that whatever the nature of an individual's statutorily created property interest, deprivation of that interest could be accomplished without notice or a hearing at any time. This view misconceives the origin of the right to procedural due process. That right is conferred, not by legislative grace, but by constitutional guarantee.

Powell found that that standard had been met. Kennedy's due-process interest, balanced against the government's in maintaining an efficient workforce, did not justify a pretermination hearing. "Prolonged retention of a disruptive or otherwise unsatisfactory employee can adversely affect discipline and morale in the work place, foster disharmony, and ultimately impair the efficiency of an office or agency. Moreover, a requirement of a prior evidentiary hearing would impose additional administrative costs, create delay, and deter warranted discharges."^[18]

As the plurality had, Powell dismissed Kennedy's claims of economic harm. Kennedy had pointed to another recent case, Goldberg v. Kelly,^[19] where the lack of a hearing prior to the cutoff of welfare benefits had been held unconstitutional. Powell distinguished the cases, noting that Goldberg had involved welfare recipients with no other means of support likely, whereas in the instant case "a public employee may well have independent resources to overcome any temporary hardship, and he may be able to secure a job in the private sector. Alternatively, he will be eligible for welfare benefits."^[18]

Lastly Powell dispensed with Kennedy's argument that the absence of a pretermination hearing increased the risk of wrongful dismissals. He noted that the existing procedures required 30 days notice prior to termination and that the employee be provided with the documentation supporting the termination as well as an opportunity to respond both verbally and in writing. "These procedures minimize the risk of error in the initial removal decision and provide for compensation for the affected employee should that decision eventually prove wrongful."^[18]

White opinion

Justice Byron White wrote a lengthy opinion concurring in part and dissenting in part. He broke the case down to three questions:

First, does the Due Process Clause require that there be a full trial-type hearing at some time when a Federal Government employee in the competitive service is terminated? Secondly, if such be the case, must this hearing be held prior to the discharge of the employee, and, if so, was the process afforded in this case adequate? Third, and as an entirely separate matter, are the Lloyd-La Follette Act and its attendant regulations void for vagueness or overbreadth?

He answered the last first, saying he concurred with the plurality and Powell. But as to the others, he began, "I differ basically" with Rehnquist's "bitter with the sweet" formulation. "The rationale of this position quickly leads to the conclusion that even though the statute requires cause for discharge, the requisites of due process could equally have been satisfied had the law dispensed with any hearing at all, whether pretermination or post-termination."^[20]

White then began a long review of the Court's case law on due process, going as far back as Dent v. West Virginia,^[21] a medical-licensing case from 1889. All of them supported the need for a hearing at some point to satisfy the demands of due process. He then asked if, as the plurality seemed to believe, there was "something different about a final taking from an individual of property rights which have their origin in the public rather than the private sector of the economy".^[22]

This led to another review of cases specific to public employment. To White, they, too, indicated a requirement for some process: "These cases only serve to emphasize that where there is a legitimate entitlement to a job, as when a person is given employment subject to his meeting certain specific conditions, due process requires, in order to insure against arbitrariness by the State in the administration of its law, that a person be given notice and a hearing before he is finally discharged."^[23]

Then White turned to whether this hearing had to be held prior to termination. In recent cases such as Goldberg and Bell v. Burson,^[24] where a driver's license suspension was challenged, the Court had required a predeprivation hearing. But older cases held to the contrary. White distinguished some cases, such as Fahey and North American Cold Storage Co. v. City of Chicago,^[25] due to the exigent circumstances that required the government not wait till a hearing to take constructive possession of property. Like Powell, he weighed the competing interests, largely agreeing but noting that if a former employee were forced onto the welfare rolls it would be "a partially counter-productive policy" for the government. White, too, concluded the existing procedures were constitutional.^[26]

For White, the real problem with the hearing was that it was not impartial. Kennedy's supervisor, who had in his notice terminating him effectively accused him of defamation, may have performed his duties at the hearing impartially, but the appearance to the contrary could not be avoided. White said he would have affirmed the district court's decision regarding Kennedy's job but reversed it on the First Amendment claim.^[27]

Dissenting opinions

The three dissenting justices wrote two opinions. William O. Douglas, nearing the end of his long tenure on the Court, wrote a dissent focusing on the free speech issues. He also joined, along with William Brennan, a longer and broader dissent by Marshall.

Douglas

"The federal bureaucracy controls a vast conglomerate of people who walk more and more submissively to the dictates of their superiors", Douglas began. The previous year, he had dissented when the Court, in United States Civil Service Commission v. National Ass'n of Letter Carriers^[28] held that the Hatch Act's ban on active participation in political campaigns by federal employees was constitutional. "Today's decision deprives them of other important First Amendment rights."^[29]

Douglas reminded his colleagues that, in

Justice Marshall's dissent addressed every issue. He first considered the hearing question. "We are hardly writing on a clean slate in this area", he observed, citing not just Roth and Perry but other recent cases where the Court had held an adversary hearing was a necessary prerequisite of the adverse government action. Marshall characterized Rehnquist's "bitter with the sweet" as a "wry" phrase, but took exception to the concept, noting that until Goldberg the same standard had been used to limit the due process rights of welfare recipients. Accepting it, as he noted the majority of the justices had not, "would amount to nothing less than a return, albeit in somewhat different verbal garb, to the thoroughly discredited distinction between rights and privileges which once seemed to govern the applicability of procedural due process."^[31]

Studies had shown that the stigma of being dismissed from a government job made it very difficult for those in that position to find equivalent private employment, especially when accompanied by allegations of misconduct. "Given the importance of the interest at stake, the discharged employee should be afforded an opportunity to test the strength of the evidence of his misconduct by confronting and cross-examining adverse witnesses and by presenting witnesses in his own behalf, whenever there are substantial disputes in testimonial evidence", Marshall wrote. Thus, as in Goldberg, the government's actions here posed the threat of interrupting the only income a recipient might have, even temporarily.

Many workers, particularly those at the bottom of the pay scale, will suffer severe and painful economic dislocations from even a temporary loss of wages. Few public employees earn more than enough to pay their expenses from month to month. Even aside from the stigma that attends a dismissal for cause, few employers will be willing to hire and train a new employee knowing that he will return to a former Government position as soon as an appeal is successful. And in many States, including Illinois, where appellee resides, a worker discharged for cause is not even eligible for unemployment compensation.

Kennedy had not been unaffected—despite his generous salary, he "was nonetheless driven to the brink of financial ruin while he waited. He had to borrow money to support his family, his debts went unpaid, his family lost the protection of his health insurance and, finally, he was forced to apply for public assistance."^[32]

Marshall responded harshly to Powell's suggestion that Kennedy need not worry because public assistance would be available:

To argue that a dismissal from tenured Government employment is not a serious enough deprivation to require a prior hearing because the discharged employee may draw on the welfare system in the interim, is to exhibit a gross insensitivity to the plight of these employees. First, it assumes that the discharged employee will be eligible for welfare. Often welfare applicants must be all but stripped of their worldly goods before being admitted to the welfare roles [sic], hence it is likely that the employee will suffer considerable hardship before becoming eligible. He may be required not only to exhaust his savings but also to convert many of his assets into cash for support before being able to fall back on public assistance. He may have to give up his home or cherished personal possessions in order to become eligible. The argument also assumes all but instant eligibility which is, sadly, far from likely even when all the employee's other sources of support have been depleted. Moreover, rightly or wrongly, many people consider welfare degrading and would decline public assistance even when eligible. Finally, the level of subsistence provided by welfare is minimal, certainly less than one is apt to expect from steady employment. The substitution of a meager welfare grant for a regular paycheck may bring with it painful and irremediable personal as well as financial dislocations. A child's education may be interrupted, a family's home lost, a person's relationship with his friends and even his family may be irrevocably affected. The costs of being forced, even temporarily, onto the welfare rolls because of a wrongful discharge from tenured Government employment cannot be so easily discounted.

Even the promise of future back pay could not ameliorate the economic setbacks of a sudden loss of pay. The Court, Marshall reminded his fellow justices, had understood as much in Sniadach v. Family Finance Corp.^[33] where it had held an employee facing garnishment of his wages was entitled to a hearing beforehand for that reason.^[34]

The Court had recognized situations such as Cold Storage and Fahee where a compelling governmental interest justified postponing the hearing until after the action, Marshall allowed. But he found neither of the government's cited interests here strong enough. "The applicable statute does not prohibit prior hearings but rather makes them discretionary with the agency", he noted, and ACUS had found that agencies that required pretermination hearings actually finished those proceedings, either way, more quickly. The 30-day period between notice of dismissal and the employee's last day was, to Marshall, more than enough time to schedule a hearing if desired. As to the second reason, the possibility of an employee facing termination becoming disruptive, "he could be put on administrative leave or temporarily assigned to a less sensitive position pending his hearing, as currently provided for by regulation."^[35]

Marshall then turned to the First Amendment question. "The 'efficiency of the service' standard would appear to bring within its reach, as permissible grounds for dismissal, even truthful criticism of an agency that in any way tends to disrupt its operation", he observed. "The majority purports to solve this potential overbreadth problem merely by announcing that the standard in the Act 'excludes protected speech' ... [But t]he Court's answer is no answer at all" for it misunderstood how the overbreadth doctrine is applied.^[36]

The focus of the doctrine is not on the individual actor before the court but on others who may forgo protected activity rather than run afoul of the statute's proscriptions ... That this Court will ultimately vindicate an employee if his speech is constitutionally protected is of little consequence—for the value of a

sword of Damocles

is that it hangs—not that it drops. For every employee who risks his job by testing the limits of the statute, many more will choose the cautious path and not speak at all.

Aftermath

After the case was remanded to the district court, it voided its reinstatement order. OEO fired Kennedy again in October; he once again appealed to the CSC. In April 1975 the commission overturned the dismissal and again ordered him reinstated with back pay.^[1]

Subsequent jurisprudence

Lower courts hearing cases in which other public employees had fought their terminations alleging due process violations found Arnett immediately dispositive of the previously unsettled hearing question.

The Court's own Mathews v. Eldridge decision, two years after Arnett, in which Powell's majority opinion had used a balancing test similar to that concurrence to conclude that the respondent was not entitled to a hearing before his disability benefits were terminated,^[44] led other courts to favor that approach over the plurality opinion's.^[45][46][47] In a case where he and his colleagues had unanimously held for a dismissed psychiatric aide at a state hospital, Justice Kenneth J. O'Connell of the Oregon Supreme Court took exception to Powell's contention that requiring pretermination hearings could increase administrative costs and drag disciplinary processes out, given that the ACUS study referred to by Barnhill at oral argument showed that the opposite was true. "In fact," he wrote, "a pre-termination hearing should enhance efficiency by giving the agency an incentive to expedite disposition of the matter, allowing it to get on with its primary functions."^[48] At the D.C. Circuit, Judge Roger Robb dissented in a case where the court had ordered the petitioner be granted a hearing on his dismissal from both his positions as an Air Force civilian employee and reserve officer, noting that Arnett did not apply to the military.^[49]

By 1982, that was effectively settled law. Future Supreme Court justice Anthony Kennedy, then on the Ninth Circuit, observed that recent cases had shown a "strong presumption that a public employee is entitled to some form of notice and opportunity to be heard before being deprived of a property or liberty interest"^[50] and in a footnote rebuked the lower court that had relied on the Arnett plurality in upholding the teacher's dismissal in the instant case.^[51] "Although there were several separate opinions filed in Arnett v. Kennedy", the Idaho Supreme Court similarly observed the next year in upholding the dismissal of a state college security chief fired for racially tinged remarks to a newspaper, "the United States Supreme Court and the lower federal courts have consistently followed the reasoning of the separate opinion written by Justice Powell", wrote Justice Stephen Bistline.^[52]

Not all the lower courts considered it as precedent on the procedural questions. In 1980 An