Private employer liable for conspiracy with state actor to retaliate for protected speech

In Dossett v. First State Bank, the facts were these: the plaintiff worked for defendant bank. She went and told off the School Board on some issue at a public meeting. School officials declared their unwillingness to deal with her in their business with the bank, which was substantial. The bank fired the plaintiff. The plaintiff sued the bank under section 1983. The case went to trial and the jury awarded more than $1.5 million. The trial court ordered a new trial. The second jury found for the Bank.

One of the issues on appeal was what did the plaintiff have to prove to show that the school officials who dealt with the bank were acting under color of state law. The trial court made up its own instruction. On appeal, the plaintiff argued, in effect, that the trial court should have given the instruction tendered by the bank. The Eighth Circuit agreed, that the trial court's definition was overly restrictive.

The bank argued the error was harmless, because it couldn't be liable anyhow, as a private actor. The appeals court disagreed, stating: "We see no reason why a private actor may not be liable under § 1983 for conspiring with state officials to violate a private citizen’s right to freedom of speech under the First Amendment." The Court rejected the bank's argument that it was stuck between a rock and a hard place, get sued by the plaintiff or lose to School Board's business - the Court explained that the plaintiff's claim was that the bank joined in the unlawful objective of retaliating against the plaintiff on account of her protected speech. So, the critical evidence was that the bank was on board with the idea that the plaintiff's expression was of no account.

On the issue of punitive damages, the Court also explained, "absent willful participation in 'joint action' with state officials to retaliate for the exercise of constitutional rights, the Constitution does not prevent the Bank, as a private actor, from terminating an employee’s at-will employment if her public speech would damage the financial interests of the Bank." The Court concluded that the bank might have stepped over the line so far as to be liable under section 1983, but not far enough to support punitive damages.

The case is the subject of this post called "Small Town Setting, Big Time Legal Issues," which includes many related links. You'd think a case like this has Southwest Virginia written all over it, one of these days, somebody who reads this blog is going to call me up and ask, what about that bank case, I've got a woman here who just got fired after her husband chewed out the Zoning Administrator, can I give you her number . . . .