I see that under one of the diary rescues, there are three different diaries about the case
Garcetti v. Ceballos, and all three pretty much argue that this is a bad ruling.
More below...
If you are unaware of what this ruling is, a deputy district attorney for the Los Angeles County District Attorney's Office became concerned with an affidavit for a search warrant. After his own investigation, he believed that the affidavit included several severe misrepresentations.
As a result, the attorney sent a memo to his supervisors stating his findings and recommending dismissing the case. His supervisors, according to the attorney "became heated and accusatory of his role in handling the case" and decided to proceed with the case.
Ultimately, the defense brought up a challenge to the warrant, to which the attorney testified, but the court ended up upholding the warrant anyway.
The attorney then claimed that he was retaliated against, including being reassigned and having a promotion denied.
The attorney sued, claiming that his 1st Amendment rights were violated because he was being punished for bringing up the problem with the affidavit with his superiors.
The Supreme Court ruled that this was not protected speech because "the First Amendment does not prevent employees from being disciplined for expressions they make pursuant to their professional duties."
In a way, this makes sense. It would be silly to allow employers to say anything while on the job. After all, an employer may not want one of their employers going around saying whatever, and then saying it's protected by free speech.
If you're getting a loan through a bank, and the person you're talking with suddenly tells you "yeah, we rip a whole bunch of people off and charge a ridiculously high interest rate," surely the bank has the right to punish that employee, even if what he is saying is true.
(Please note, this ruling was only dealing with government employees. I realize the above examples deal with private companies, but what the court is basically saying is that the government has the same right to regulate and punish employees as any private company does)
What people are upset about is that there isn't some sort of exception for whistle-blowing. Of course, in this case we're talking about internal whistle blowing - and not only that, but "whistle-blowing" relating directly to someone's job responsibilities. As the ruling states, it's easy to justify an employee speaking out on matters that, while related to their employment, isn't really related to their own job responsibilities, as speaking "as a citizen." The example given is a teacher discussing the hiring practices with the school board. The teacher has nothing to do with hiring practices, and thus is discussing something which is, ultimately, unrelated to that person's job, though it is still related in the sense that the teacher is talking about the same school system. Also, one should note, that such an expression isn't really being done in their capacity as a teacher.
But what if you're discussing something which is related to your job description? In this case, the attorney said he did what he did because he believed it was required by his duties in his position. Now, clearly an employer should have the right to regulate, reward, and punish an employee when it comes to that employee's immediate job duties. The question here becomes, if all speech isn't protected, and all speech isn't restricted...where is the line drawn that separates the two?
Clearly, all speech shouldn't be just allowed when it comes to performing your job duties. Perhaps there is line somewhere that can be drawn, but does that line include the criticism, to a superior, of something with which you are directly involved in because of your position? What's the difference between legitimate whistle-blowing and whining? The problem is here that protecting whistle-blowing in this case would either mean that some magical test would have to be created to separate legitimate whistle-blowing and just complaining, or that all complaints are protected, no matter how unfounded.
There is no legitimate way to create some magic test, and allowing all complaints no matter what overly restricts the ability of an employer to regulate its employees in regards to that employee's job duties.
Ultimately, while it may be nice to be able to bather away at your boss about how dumb this assignment that he gave you is, or that you think a project you're working on is going wrong, you have no First Amendment rights to do so. Of course, whether an employer should heed your advice is another matter, but the law isn't there to require managers to be intelligent.
The key in this case is the argument of "acting as a citizen" and acting pursuant to your responsibilities as an employee. What this means is that "whistle-blowing" isn't dead in the sense that, the same guy could have left work, gone home, and called the local paper, saying the same thing, and he would, presumably, be protected because he would have been acting as a citizen in that case.
This is another case like Kelo (and another case not too long ago, which I can't remember) which is probably correct in law, even if it isn't the best decision for the people. But then again, the court isn't supposed to create a ruling with is ideal for the people; they're supposed to create a ruling based on the law and the rights of people (in this case, the rights of an employee and employer).
Wiki article
Text of the ruling