Inc. v. City of Northlake O'Hare Truck Service

The Court reversed the lower courts' ruling. Citing Elrod and Branti, Justice Kennedy wrote that "patronage does not justify the coercion of a person's political beliefs and associations." In such cases, in which affiliation is the sole basis of dismissal, there is no need to inquire whether the affiliation requirement was reasonable. However, he went on say that in cases that involve speech as well as affiliation, a balancing test from an earlier free speech case, Pickering v. Board of Education, would apply. (And he said that O'Hare might be such a case.) The Pickering test balances the employees' rights against the government's interests in the efficiency of its office. Kennedy then said that because the court of appeals had considered O'Hare to be an affiliation case, the Supreme Court would do likewise and try it as such.

The Court held that a contractor was protected to the same extent that public employees were. Kennedy responded to the city's arguments:

Respondents insist the principles of Elrod and Branti have no force here, arguing that an independent contractor's First Amendment rights, unlike a public employees, must yield to the government's asserted countervailing interest in sustaining a patronage system. We cannot accept the proposition, however, that those who perform the government's work outside the formal employment relationship are subject to what we conclude is the direct and specific abridgement of First Amendment rights described in this complaint.

The Court rejected the Seventh Circuit's reasoning in distinguishing employees from contractors. An amicus curiae brief filed by the Towing and Recovery Association of America, Inc., indicated that government referrals account for 30 to 60 percent of contractors' business (for contractors that work with the government at all). The argument that contractors do not depend on government business, then, does not hold.

Kennedy briefly addressed the fear that this decision would spawn numerous suits. First, similar cases in the past had not resulted in excessive litigation. Second, government agencies were still allowed wide latitude in hiring and firing decisions. An agency might end a contract based on merit, or even on political affiliation, if that were relevant to the job. Thus, agencies would not be at the mercy of baseless lawsuits. What was unacceptable in this case was that the city offered no justification for its actions other than its interest in maintaining a patronage system. Having made the above judgments, the Court sent the case back to the lower courts, to decide whether the Elrod-Branti rule or the Pickering balancing test would apply.