On Appeal from the United States District Court for the Eastern District of Pennsylvania. D.C. Civil Action No.91-00240
Before: Greenberg, Nygaard and Higginbotham, Circuit Judges.
A. LEON HIGGINBOTHAM, JR., Circuit Judge.
Between 1976 and 1990, the city of Allentown, Pennsylvania maintained an ordinance requiring city employees to reside within the city. Between 1985 and 1990, appellant John W. Holder was an employee of Allentown but did not reside within the city. In 1990, Holder wrote a letter to the editor of an Allentown newspaper criticizing the residency requirement. One month after publication of the letter, Allentown officials forced Holder to resign allegedly for violating the residency ordinance. The principal issue in this appeal is whether Holder's amended complaint states a claim that the city of Allentown and its officials retaliated against him for engaging in protected free speech activity. The district court dismissed Holder's amended complaint, holding that it did not state a claim for violation of his free speech rights. We now reverse and hold that Holder's amended complaint did state a claim for violation of his rights to freedom of speech.
There are two other issues presented on this appeal; namely whether Allentown's enforcement of the residency requirement violated Holder's rights to freedom of association, and whether Allentown's termination of Holder's employment violated his rights to due process. Because we affirm the district court's holding that Holder's amended complaint did not state a claim for violation of his freedom of association and due process rights, we will not revisit the court's analysis in dismissing those two claims.
In May 1985, Holder began working as a systems analyst for the City of Allentown in its Department of Administration and Finance. At the time, Allentown had in effect a city ordinance establishing a residency requirement for employees of the city. The ordinance provided that employees of the city were to reside in the city within one year from the date of the beginning of their employment and were to continue residing in the city during the course of their employment. The ordinance also provided that employees who violated the residency requirement would be dismissed from city employment.*fn1
From April 1985 until 1990, Holder and his wife resided in the city of Bethlehem, Pennsylvania. Apparently, in 1985 and 1986, during the course of his first year of employment with Allentown, Holder unsuccessfully attempted to find suitable and affordable housing in Allentown. In May 1986, Holder decided to stay in Bethlehem to be closer to his wife's family who also resided in that city. However, Holder listed his address and telephone number with Allentown's personnel office as being in Allentown.
In early February 1990, Allentown's city council voted to retain the residency ordinance. On February 16, 1990, The Morning Call, an Allentown newspaper, published a letter to the editor written by Holder, criticizing the council's decision to retain the ordinance. Holder wrote in part:
In Allentown, a full and unconditional "equality of rights, opportunity and treatment," i.e., real democracy does not exist for city employees. This is because the city's residency ordinance denies them the same privilege of unrestricted home ownership enjoyed by all other citizens.
These council persons [who voted to retain the ordinance]  have shown outright disregard for the democratic ideals which underlay the very spirit of the Constitution.
Ironically, the democratic process, which is to serve and uphold democracy above all else, has been used instead to suppress it. No matter how well-meaning, a few elected officials have seen fit to allow democracy to fall beneath the provincial concerns of a city. In their sophistry, they have failed to come to terms with this most crucial consideration: any rule of law in this land that separates citizens from sharing fully in democracy, and which strips them of their dignity as human beings, cannot be morally justified.
Three days later, on February 21, 1990, city council members Emma Tropiano and Benjamin Howells complained to Howard Kunik, the Director of the Department of Administration and Finance, about Holder's letter to the editor. That same day, Kunik talked to Henry Kolb, Holder's immediate supervisor. Kunik told Kolb that Holder's letter could interfere with Kunik's ability to gain city council approval of the Department's budget request.
Pursuant to administrative regulations enacted to enforce the residency ordinance, in the event the city's personnel office receives information that an employee is violating the ordinance, the director of the department where the employee works and the city's personnel manager conduct a face-to-face interview with the employee. If the employee denies violating the ordinance, the city investigates. If the investigation convinces the city that the employee is indeed violating the ordinance, the employee is immediately suspended without pay and terminated. If, however, at the initial interview the employee admits to violating the ordinance, the employee is given the opportunity to resign, plus a reference recommendation, and up to 30 days to find other employment before being terminated.
On February 26, Kunik and Charles Wilson, the Manager of Personnel and Labor Relations for Allentown, met with Holder and questioned him regarding his residency. Holder refused to confirm or deny that he did not reside in Allentown. Following the interview with Holder, Kunik supposedly contacted the City Solicitor who informed him that Holder's refusal to confirm or deny violating the residency ordinance "means that he does not live in the city."
On February 28, Kunik wrote a memorandum to Joseph Daddona, the mayor of Allentown, recommending that Holder be terminated for violating the residency ordinance. In the memo, Kunik outlined the reasons why he believed Holder did not live in Allentown. The Allentown phone number listed in Holder's personnel file belonged to an Allentown Real Estate agent. The Post Office did not deliver Holder's mail at the Allentown address. The electricity company had no record of service to Holder at the Allentown ...