The Supreme Court restricted the free-speech rights of the nation's 21 million public employees Tuesday, ruling that the First Amendment does not protect them from being punished for complaining to their managers about possible wrongdoing.

Although government employees have the same rights as other citizens to speak out on controversies of the day, they do not have the right to speak freely inside their offices on matters related to "their official duties," the Supreme Court said in a 5-4 decision.

"When a citizen enters government service, the citizen by necessity must accept certain limitations on his or her freedom," said Justice Anthony Kennedy, rejecting a lawsuit brought by a Los Angeles County prosecutor.

Lawyers for government whistle-blowers denounced the ruling as a major setback. They said it could threaten public health and safety. Hospital workers who know of dangers may be discouraged from revealing them, while police and public employees may be dissuaded from exposing corruption, they said.

"In an era of excessive government secrecy, the court has made it easier to engage in a government cover-up by discouraging internal whistle-blowing," said Steven Shapiro, legal director for the American Civil Liberties Union.

However, lawyers for city and state agencies said the decision will prevent routine internal workplace disputes from becoming federal court cases.

The decision threw out most of a lawsuit filed by Deputy District Attorney Richard Ceballos, who said he was disciplined after he wrote internal memos alleging that a police officer may have lied to obtain a search warrant.

The prosecutor urged his supervisors to dismiss a pending criminal case because of the police misconduct. His advice was rejected, and he was transferred to a lesser job farther from his home and denied a promotion.

Ceballos then sued county officials, including then-District Attorney Gil Garcetti, alleging he was retaliated against for speaking out within the office. The U.S. Court of Appeals in San Francisco agreed he was entitled to a trial on his lawsuit because he had spoken on a "matter of public concern." But the Supreme Court reversed that ruling Tuesday.

"The First Amendment does not prohibit managerial discipline based on an employee's expressions made pursuant to official responsibilities," Kennedy said in Garcetti vs. Ceballos.

The court's newest justice, Samuel Alito, cast a crucial vote to form the pro-government majority. In October, the justices first heard the case, but they were apparently split 4-4 when Justice Sandra Day O'Connor finally stepped down in February. It was reargued in March. Also joining Kennedy were Chief Justice John Roberts Jr. and Justices Antonin Scalia and Clarence Thomas.

Because Tuesday's decision interprets the First Amendment, it applies to governments at all levels, including federal and state agencies, public hospitals and public schools and colleges.

The dissenters said they would have left the courthouse door open to such First Amendment suits. "I would hold that private and public interest in addressing official wrongdoing and threats to health and safety can outweigh the government's stake" in running an efficient office, said Justice David Souter.

The dissenters cited the case of an engineer overseeing the building of a dam who was fired after questioning the work of private contractors. In another case, a city worker was dismissed after reporting thefts from the lottery board.

The federal government and most states have laws designed to protect whistle-blowers. For example, a California law forbids employers from retaliating against workers who "disclose a violation of a federal or state statute or regulation."

But advocates for whistle-blowers say these laws prove ineffective in many cases. That's why they say the free-speech guarantee of the First Amendment has been crucial.

"Public employee truth-tellers are essential to the safety and welfare of our country. They expose corruption, fraud and national security shortcomings," said Joanne Royce, counsel for the Government Accountability Project in Washington.

Still, Tuesday's majority opinion left open the possibility that an employee, such as Ceballos, might be shielded by the First Amendment if he acted as a "citizen," rather than in an official capacity, and took his complaints to a newspaper or to a state legislator.

Justice John Paul Stevens in dissent said it "seems perverse" to protect whistle-blowers who go public, while punishing those who take their concerns to their managers.

"We think this is a bad decision, but it may not be a catastrophe," said Peter Eliasberg, an American Civil Liberties Union lawyer in Los Angeles. "It basically says, if you go to the L.A. Times, you might get some protection. But if you report it in the office and up the chain of command, you don't have any protection under the First Amendment."

The justices in the majority said they would not endorse "a constitutional cause of action behind every statement a public employee makes in the course of doing his or her job."

©2006 San Francisco Chronicle

###