Trusz v. UBS Realty Investors, LLC

Supreme Court of Connecticut
Not specified in text (slip opinion) (2015)
ELI5:

Rule of Law:

The U.S. Supreme Court's Garcetti v. Ceballos rule, which denies First Amendment protection for public employee speech made pursuant to official duties, does not apply to claims under General Statutes § 31-51q that are based on the free speech provisions of the Connecticut Constitution. Instead, a modified Pickering/Connick balancing test applies, extending protection to employee speech on matters of significant public interest (such as official dishonesty, unconstitutional action, serious wrongdoing, or threats to health and safety) made pursuant to official job duties, and this protection applies equally to private employees under § 31-51q.


Facts:

  • UBS Realty Investors, LLC (UBS Realty) provides real estate investment management services to clients.
  • Richard Trusz was the head of UBS Realty’s valuation unit and a Managing Director.
  • In early 2008, Trusz reported to UBS Realty management what he contended were errors in the valuation of certain properties and expressed opinions that UBS Realty was obligated to correct and disclose these errors, return excess management fees, improve staffing/resources for valuation, address inadequate internal controls, stop preferential treatment, and cease breaching fiduciary duties to investors.
  • UBS Realty’s compliance officer investigated Trusz’s contentions and confirmed valuation errors, but concluded they were not at a level requiring restatement of values or return of management fees.
  • A third-party auditor also investigated Trusz’s claims, confirmed valuation errors, but concluded they were not material to the funds’ financial statements and did not require a restatement.
  • Trusz disagreed with these conclusions and continued to express his opinion to both UBS Realty and UBS AG that by not disclosing errors and adjusting fees, UBS Realty was violating its fiduciary, legal, and ethical obligations.
  • Trusz subsequently filed discrimination and retaliation complaints with various commissions (Connecticut Commission on Human Rights and Opportunities, United States Equal Employment Opportunity Commission, United States Occupational Safety and Health Administration).
  • Trusz’s employment was terminated in August 2008.

Procedural Posture:

  • Richard Trusz (plaintiff) initiated an action against UBS Realty Investors, LLC, and UBS AG (defendants) in the United States District Court for the District of Connecticut, seeking damages for alleged wrongful termination and other relief, including a claim under General Statutes § 31-51q.
  • The defendants subsequently filed a motion for summary judgment in the District Court.
  • Following the Connecticut Supreme Court's decision in Schumann v. Dianon Systems, Inc. (which applied Garcetti to § 31-51q claims based on the First Amendment), the plaintiff informed the District Court of his intent to argue that Garcetti did not apply to his retaliation claim under the state constitution.
  • The United States District Court for the District of Connecticut (Judge Squatrito) certified a question of law to the Connecticut Supreme Court regarding the interpretation of General Statutes § 31-51q in the context of Garcetti and the free speech provisions of the state constitution.

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Issue:

Does the U.S. Supreme Court's Garcetti v. Ceballos rule, which states that public employees are not speaking as citizens when making statements pursuant to their official duties and thus lack First Amendment protection, apply to claims under General Statutes § 31-51q for discipline or discharge based on speech protected by Article First, Sections 3, 4, or 14 of the Connecticut Constitution?


Opinions:

Majority - Justice Palmer

No, the rule announced by the U.S. Supreme Court in Garcetti v. Ceballos does not apply to a claim that an employer violated General Statutes § 31-51q based on the exercise of rights guaranteed by the Connecticut Constitution. Instead, a modified form of the Pickering/Connick balancing test applies to speech by an employee pursuant to official duties under the state constitution, and § 31-51q extends the same protection to similar speech by a private employee. The court arrived at this conclusion by applying the Geisler multifactor approach for interpreting state constitutional provisions. First, the text of Article First, Section 4 of the Connecticut Constitution, which protects citizens' right to speak freely "on all subjects," is broader than the First Amendment. This supports a standard more consistent with Pickering/Connick than Garcetti's categorical approach, which the court found did not limit speech based on the speaker's capacity as a citizen. Second, related Connecticut precedents, such as State v. Linares, demonstrate the court's willingness to interpret state free speech provisions independently and more broadly than federal counterparts. The court has previously maintained a status quo of broader protection when federal standards narrowed, as Garcetti did after 38 years of Pickering's application. Third, the court found Pickering and Connick to be more persuasive federal precedents than Garcetti. The Garcetti distinction between 'citizen' and 'employee' speech is artificial and difficult to apply, creating new uncertainties and potentially discouraging internal reporting. Garcetti shifted the focus from the public concern of the speech (hierarchy of First Amendment values) to the employee's status, even if the speech concerned matters of high public value. Furthermore, Garcetti creates a perverse incentive for employees to bypass internal channels and air concerns externally to gain protection. The court found Justice Souter’s proposed modified Pickering test (protecting speech on official dishonesty, unconstitutional action, serious wrongdoing, or threats to health and safety) adequately balances employer interests with the public's need for information. Fourth, sister state decisions applying Garcetti were deemed unpersuasive, as they either disagreed with the court's reasoning or presumed coextensiveness between state and federal protections, which Connecticut does not. Fifth, historical insights show Connecticut's constitutional framers contemplated vibrant public speech and minimal governmental interference, reinforcing a broad interpretation of speech rights. Finally, contemporary understandings and sociological norms weigh against Garcetti. Denying protection for official-duty speech on public concerns reduces the likelihood that employees, who are best positioned to know, will report corrupt or dangerous practices. This incentivizes external over internal reporting, which is contrary to public policy embodied in § 31-51q. The court also held that this modified Pickering/Connick standard applies to private workplaces under § 31-51q, rejecting arguments that private employers have a broader right to control speech or that such protection is solely a legislative matter. The legislature intended § 31-51q to protect constitutionally protected speech in the private workplace, and the adopted standard adequately balances employer and employee interests.



Analysis:

This case significantly broadens the free speech rights of both public and private employees in Connecticut, particularly for 'whistleblower' type speech made within the scope of their official duties. By explicitly rejecting the Garcetti rule for state constitutional claims, the Connecticut Supreme Court establishes a higher standard of protection under its state constitution than is available under the First Amendment for job-related speech. This decision encourages employees to report serious wrongdoing, official dishonesty, and threats to health and safety internally without fear of discipline, potentially reducing the initial need for employees to go to external agencies to secure protection. It reinforces the principle that state constitutions can provide greater individual liberties than the federal constitution.

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