214 F.3d 788 (7th Cir. 2000)
Cynthia Taylor and Rebecca Smith,    Plaintiffs-Appellants,v.Hamilton Carmouche, Margaret Felton,  and City of Gary, Indiana,    Defendants-Appellees.
No. 99-3117
In the  United States Court of Appeals  For the Seventh Circuit
Argued February 22, 2000Decided May 24, 2000Rehearing and Rehearing En BancDenied July 20, 2000

Appeal from the United States District Court for the  Northern District of Indiana, Hammond Division.  No. 2:96 cv 504--Andrew P. Rodovich, Magistrate Judge.
Before Coffey, Easterbrook, and Williams, Circuit  Judges.
Easterbrook, Circuit Judge.


1
After Hamilton  Carmouche was promoted to Corporation Counsel of  Gary, Indiana, he needed to appoint a City  Attorney, the No. 2 position. He chose Margaret  Felton, which caused an uproar among the  secretaries in the office. It was not just that  Felton is white, while Carmouche, most of the  other attorneys and staff, and most residents of  Gary are black. The problem was that people  thought that Felton would be a taskmaster--as she  turned out to be (for example, she had a time  clock installed). The next year was filled with  strife: staff members complained to Carmouche and  went over his head when he backed Felton.  Displeased with efforts to undermine his position  and that of his chosen second in command,  Carmouche disciplined several of the insurgents.  By the end of that year our two plaintiffs--  Cynthia Taylor, a lawyer in the office, and  Rebecca Smith, a secretary and paralegal--were  gone. Soon Carmouche and Felton followed them to  private life, as they had lost the confidence of  Mayor Barnes. He, too, was replaced before much  longer, having decided not to run for reelection  in 1995.


2
Taylor was hired in June 1993, fresh from law  school, and last worked for the Law Department in  October 1994, when she took maternity leave. When  Taylor sought to return in December, Carmouche  demanded a medical clearance in light of Taylor's  contention that she needed therapy three days a  week to address her inability to climb stairs--a  serious problem at the Law Department, located on  the fourth floor of a building whose elevator  does not go higher than the third floor. Taylor  did not respond for a month, and the physician's  opinion she finally secured in January said that  she could not climb stairs or work more than four  hours a day. Carmouche told Taylor that she would  be welcome to come back when she could work full  time; instead she found other employment and sued  for wrongful discharge, contending that Carmouche  retaliated against her on account of her  complaints about his (and Felton's) stewardship  of the Law Department. Claims under the Americans  with Disabilities Act, the Family Medical Leave  Act, and Title VII of the Civil Rights Act of  1964 have dropped by the wayside. In this court  Taylor's sole contention, based on 42 U.S.C.  sec.1983, is that Carmouche violated her rights  under the first amendment by penalizing her for  speech about matters of public concern.Smith joined the Law Department in 1991 and was  satisfied with her situation until February 1994,  when Felton became City Attorney. Smith  complained in general terms to both Carmouche and  Mayor Barnes that Felton is a "racist," and Smith  perceives that she suffered as a result. Felton  issued Smith a written warning for taking too  much time for lunch and complained in writing to  Carmouche about Smith's unwillingness to attend  a professional seminar. Felton delivered a verbal  warning for using profanity and failing to treat  others with respect. In July Felton spoiled a  surprise birthday party that Smith and other  secretaries had planned for a co-worker, telling  the object of the party to "call off the dogs."  When Smith paged Carmouche to return to the  office so that she could complain in writing  about Felton's reference to the secretaries as  "dogs," Carmouche blew up and called Smith's memo  "a piece of shit" and handed her a written order  (dated ten days earlier) suspending her for  failing to provide certain documents to the City  Council in a timely fashion. Smith appealed this  suspension to the City's personnel committee,  where both she and Taylor testified that Smith  was being singled out for alleging that Felton is  a racist. Smith prevailed on this grievance but  soon was suspended again, and her additional  grievances were unsuccessful. (She does not  contend in this litigation that any of the  additional suspensions was unjustified. Nor does  she complain about the multiple written warnings  for tardiness and insubordination that were  placed in her file before Felton's appointment.)  Smith quit in October 1994 and labels this a  constructive discharge.


3
Carmouche was not pleased by Smith's decision  to go over his head, or by Taylor's criticism of  his management decisions, and let both of them  know it. Taylor, who had been working in a  detached office on the third floor (large enough  for one attorney and one secretary) to  accommodate her leg injury, was ordered back to  the fourth floor for closer supervision. She  appealed to Gary's chief operating officer, who  told her to stay put. Taylor then went home and  was not present for a visit from Carmouche and  Felton, who suspended her for abandoning her job.  Taylor filed another grievance, sought medical  leave for the period of the suspension, and also  applied for maternity leave. When Felton  initially granted a shorter period of leave than  Taylor sought, she filed a grievance about that  decision too, this time with the City's personnel  director. Taylor returned to work and filed a  workers' compensation claim, asserting that all  time off had been attributable to an injury  sustained on the job, and filed yet another  grievance, this time asserting retaliation for  testifying at Smith's grievance hearing. For the  first time, Taylor went outside the City's  personnel hierarchy; she turned to the United  States Department of Labor, asserting in a letter  that she was the victim not only of retaliation  for speech but also of racial discrimination.  Meanwhile Taylor commenced her maternity leave,  which was to last until mid-December. Taylor  reported back to work on December 19, and her  answer to Carmouche's question whether she was  able to work full time led to his request for a  physician's evaluation--and what happened then we  have already described.


4
Magistrate Judge Rodovich, presiding by consent  under 28 U.S.C. sec.636(c), granted judgment as  a matter of law to the City of Gary on the first  amendment claims at the close of plaintiffs'  case. Municipalities are not vicariously liable  in litigation under sec.1983. Monell v. New York  Department of Social Services, 436 U.S. 658  (1978). That Carmouche was a department head does  not affect application of the Monell principle.  Auriemma v. Rice, 957 F.2d 397 (7th Cir. 1992).  Unless the City had a policy of retaliating  against protected speech--and neither Taylor nor  Smith contends this--it cannot be liable. If  Carmouche or Felton retaliated against protected  speech, then they violated rather than  implemented Gary's personnel policy, so the  sec.1983 claim against the City was rightly  dismissed.


5
Evidence concerning plaintiffs' remaining claims  showed that Felton alienated the secretaries by  insisting that they work harder, that the  secretaries perceived her as condescending, and  that Carmouche was touchy, insensitive, profane,  and in many other respects a poor manager. None  of these is a federal offense, however, and the  magistrate judge concluded that Smith, at least,  had nothing else to go on. After plaintiffs' case  the magistrate judge granted judgment as a matter  of law against Smith (and in substantial measure  against Taylor), ruling that none of the events  within the City's chain of command was speech  protected by the first amendment against  retaliation. All of the statements, protests, and  grievances were internal personnel matters,  dealing with the situations of the plaintiffs  rather than matters of general public concern,  the magistrate judge concluded. See Connick v.  Myers, 461 U.S. 138 (1983); Waters v. Churchill,  511 U.S. 661 (1994). The letter to the Department  of Labor, however, was not an internal affair,  and retaliation against Taylor for writing this  letter could support recovery, the court stated.  The jury returned a verdict in Taylor's favor  against Carmouche on this theory, awarding a  total of $80,000 in damages: $14,000 for lost  wages and benefits, $6,000 for other loss, and  $60,000 as punitive damages. On all other  theories of liability (for example, Title VII and  the FMLA), the jury's verdict was for defendants.


6
After the verdict the court entered judgment as  a matter of law in Carmouche's favor under Fed.  R. Civ. P. 50(b) (1)(C), and conditionally  awarded Carmouche a new trial in the event we  should disagree with this disposition. See Fed.  R. Civ. P. 50(c)(1). The magistrate judge  believed that the three-month lapse between  Taylor's letter to the Department of Labor and  Carmouche's decision not to allow Taylor to  return from leave was too great to support an  inference that the former precipitated the  latter. Given the rule that all evidence and  inferences must be taken in the light most  favorable to the verdict, this observation does  not permit the court to set aside the jury's  conclusion. Taylor went on leave soon after  sending the letter, and Carmouche demanded  medical clearance the very day she returned. The  length of Taylor's maternity leave cannot  preclude, as a matter of law, an inference that  Carmouche imposed a penalty for criticism.


7
What does preclude the inference is the absence  of any evidence that what Carmouche did was a  penalty. Gary requires all employees returning  from any health-related leave to provide medical  evidence of fitness for duty. Carmouche did no  more than enforce this rule. Whatever intentions  or hopes Carmouche may have harbored, enforcing  a policy applicable to all employees cannot  reasonably be described as a penalty for speech.  (No evidence of record implies that Carmouche  enforced the rule selectively.) To find a  penalty, therefore, Taylor would have to point to  the decision of January 1995, when Carmouche  declined to allow her to work part time. But  Taylor does not contend that the January 1995  decision was retaliation for her letter to the  Department of Labor.


8
Although plaintiffs chastise the magistrate  judge for removing from the jury's purview the  decision whether the remaining grievances and  protests dealt with matters of general public  concern, their status is a question of law rather  than fact, so the court rather than the jury is  the proper decisionmaker. Connick, 461 U.S. at  148 n.7. Our review is plenary, id. at 150 n.10,  and we agree with the magistrate judge's  resolution. Three principal considerations  persuade us that the magistrate judge was right  in thinking these grievances covered by Connick.


9
First, as in Connick, all of the questioned  speech took place within the employer's personnel  hierarchy and concerned the management of the  labor force. Smith and Taylor complained about  Felton to Carmouche, and then to Carmouche's  superiors. That Gary's personnel committee  sometimes takes formal testimony rather than  resolving grievances in other ways does not turn  the subject from management to politics. In  Connick itself the Court concluded that some of  the speech concerned issues of public concern,  but it held that the speech as a whole must be  deemed work-related, in large measure because it  all occurred within the workplace and concerned  supervisory management styles--which is, in the  end, pretty much what Smith and Taylor were  complaining about.


10
Second, as in Connick and Waters, Smith and  Taylor were protesting in their capacity as  employees, not in their capacity as citizens.  Their complaints related to their jobs. Taylor  believes that she rather than Felton should have  been promoted and that her leg injury should have  been accommodated by allowing her to continue  working on the third floor; Smith believes that  she should have been allowed to hold surprise  parties without interference, contends that her  belated document delivery was someone else's  fault, and believes that her supervisors used too  much crude language. These are normal workplace  grievances, and statements made in an employment  setting about how the tasks should be carried out  are appropriate subjects for reaction by  management, without constitutional obstacles.  Wales v. Board of Education, 120 F.3d 82, 84-85  (7th Cir. 1997). None of the statements was  offered as a political view about what legal  policies the City of Gary should adopt, or even  as a view about the City's organizational  structure. Smith and Taylor were not engaged in  a debate about whether it was desirable, say, for  Gary to hire racists; they contended, rather,  that race influenced what happened to them, on  the job. None of the defendants' responses  affected political discourse. As Justice O'Connor  observed in Waters, 511 U.S. at 672-75 (some  internal citations omitted):


11
[E]ven many of the most fundamental maxims     of our First Amendment jurisprudence     cannot reasonably be applied to speech by     government employees. The First Amendment     demands a tolerance of "verbal tumult,     discord, and even offensive utterance," as     "necessary side effects of . . . the     process of open debate," Cohen v.     California, 403 U.S. 15, 24-25 (1971). But     we have never expressed doubt that a     government employer may bar its employees     from using Mr. Cohen's offensive utterance     to members of the public or to the people     with whom they work. . . . [W]hen an     employee counsels her co-workers to do     their job in a way with which the public     employer disagrees, her managers may tell     her to stop, rather than relying on     counterspeech. ... [T]hough a private     person is perfectly free to uninhibitedly     and robustly criticize a state governor's     legislative program, we have never     suggested that the Constitution bars the     governor from firing a high-ranking deputy     for doing the same thing. Even something     as close to the core of the First     Amendment as participation in political     campaigns may be prohibited to government     employees. ...


12
This does not, of course, show that the     First Amendment should play no role in     government employment decisions. Government     employees are often in the best position     to know what ails the agencies for which     they work; public debate may gain much     from their informed opinions. And a     government employee, like any citizen, may     have a strong, legitimate interest in     speaking out on public matters. In many     such situations the government may have to     make a substantial showing that the speech     is, in fact, likely to be disruptive     before it may be punished. ...


13
. . . [T]he extra power the government has     in this area comes from the nature of the     government's mission as employer.     Government agencies are charged by law     with doing particular tasks. Agencies hire     employees to help do those tasks as     effectively and efficiently as possible.     When someone who is paid a salary so that     she will contribute to an agency's     effective operation begins to do or say     things that detract from the agency's     effective operation, the government     employer must have some power to restrain     her. The reason the governor may, in the     example given above, fire the deputy is     not that this dismissal would somehow be     narrowly tailored to a compelling     government interest. It is that the     governor and the governor's staff have a     job to do, and the governor justifiably     feels that a quieter subordinate would     allow them to do this job more     effectively.


14
The key to First Amendment analysis of     government employment decisions, then, is     this: The government's interest in     achieving its goals as effectively and     efficiently as possible is elevated from a     relatively subordinate interest when it     acts as sovereign to a significant one     when it acts as employer. The government     cannot restrict the speech of the public     at large just in the name of efficiency.     But where the government is employing     someone for the very purpose of     effectively achieving its goals, such     restrictions may well be appropriate.


15
Carmouche and Felton acted in their capacity as  supervisors of the Law Department rather than as  regulators of private speech, which under Waters  they may do without violating the first  amendment.


16
Third, Smith and Taylor offered their assertion  that Felton is a "racist"--the only statement  that plaintiffs characterize as raising an issue  of public concern--as a proposition of fact  rather than of opinion, though it is principally  the latter that the first amendment protects.  Gertz v. Robert Welch, Inc., 418 U.S. 323, 339-40  (1974); Stevens v. Tillman, 855 F.2d 394, 398-402  (7th Cir. 1988). The statement at issue in Rankin  v. McPherson, 483 U.S. 378 (1987), an employee's  wish that the President be assassinated, asserted  a political stance. But whether a given  supervisor is a racist, or practices racial  discrimination in the workplace, is a mundane  issue of fact, litigated every day in federal  court. "Felton is a racist" is defamatory, and a  person who makes an unsupported defamatory  statement may be penalized without offending the  first amendment. Whether that penalty is  delivered in a slander action, in a perjury  prosecution, in an award of attorneys' fees for  making unsubstantiated allegations, or in the  workplace by a suspension, is immaterial to the  Constitution. What matters is that defamation of  a co-worker may be punished, and as we pointed  out in Feldman v. Ho, 171 F.3d 494, 497-98 (7th  Cir. 1999), whether a particular defamatory  statement is true or false is not a question of  constitutional moment, unless the target is a  "public figure," which Felton wasn't. See also  Milkovich v. Lorain Journal Co., 497 U.S. 1, 18-  23 (1990); In re Palmisano, 70 F.3d 483 (7th Cir.  1995). The Court held in Waters that so long as  the employer honestly and reasonably believes  that workplace speech is inappropriate or  disruptive, then the Constitution permits a  response whether the speech in question was true  or false, disruptive or not.


17
Smith and Taylor pressed their grievances  through the machinery Gary provided to its  employees. Sometimes they won; sometimes they  lost. They were not entitled to take their losses  to federal court and ask a jury to second-guess,  in the name of the Constitution, the decisions of  the personnel hierarchy.

Affirmed

18
Williams, Circuit Judge, dissenting.  I  respectfully dissent. While I agree with the  majority's resolution of Cynthia Taylor's claim  relating to her reinstatement after her medical  leave, I disagree with the majority's resolution  of the plaintiffs' other claims. Specifically, I  am not persuaded that the magistrate judge  correctly ruled that the plaintiffs' protests  within the City of Gary's chain of command did  not deal with matters of public concern.


19
As I read the record, the plaintiffs' protests  were an effort to challenge racism in the City's  Law Department. In a variety of forums and on  several occasions they raised their concerns  about racism on the part of both Margaret Felton  and Hamilton Carmouche. Most significantly, they  went directly to both the City's Mayor and Deputy  Mayor in their effort to speak out. And, there is  no indication in the record that their protests  were restricted to their individual concerns;  rather, it appears that they were speaking out on  behalf of the entire office. In light of these  facts, I cannot conclude that the plaintiffs'  protests regarding racism in the City's Law  Department were simple workplace grievances that  do not address matters of public concern. See  generally Marshall v. Allen, 984 F.2d 787, 795-96  (7th Cir. 1993); Tindal v. Montgomery County  Comm'n, 32 F.3d 1535, 1539-40 (11th Cir. 1994).  Assuming it is not related entirely to a private  dispute between the plaintiff and defendant,  racism in a public agency is inherently a matter  of public concern. See Connick v. Myers, 461 U.S.  138, 148 n.8 (1983) (noting that racial  discrimination is a matter inherently of public  concern).


20
Moreover, that the plaintiffs' protests were  communicated within the City's chain of command  does not strike me as a particularly strong  reason to deem their protests matters of private  concern. The plaintiffs' should not be penalized  for taking advantage of internal procedures for  raising their concerns, instead of running to the  press the first chance they had. See Givhan v.  Western Line Consol. Sch. Dist., 439 U.S. 410,  413-14 (1979) (expressing one's views privately  rather than publicly does not forfeit the first  amendment protections afforded a government  employee); Hulbert v. Wilhelm, 120 F.3d 648, 654  (7th Cir. 1997) (noting that the plaintiff-  employee was, if anything, to be commended for  attempting to go through established internal  channels).


21
As for the majority's suggestion that the  plaintiffs' protests about racism in the Law  Department were defamatory and therefore are not  entitled to constitutional protection, I think  the majority collapses two distinct areas of  first amendment law. One area regards the  limitations placed on a government when it acts  in its sovereign capacity to penalize or  authorize penalties for defamation. The other  addresses the limitations placed on a government  when it acts in its capacity as an employer to  discipline one of its employees based on that  employee's speech. In light of the distinct  situations that must be addressed, quite  different standards apply in these two areas.  Whether defamation may be punished depends on  whether the subject of the defamatory statement  is a public official, public figure, or private  figure, whether the defamatory statement involves  a matter of public concern, and whether the  defamatory statement is a proposition of fact.  See generally Milkovich v. Lorain Journal Co.,  497 U.S. 1 (1990); Dun & Bradstreet, Inc. v.  Greenmoss Builders, Inc., 472 U.S. 749 (1985)  (plurality opinion). Moreover, truth is an  absolute defense. Whether a government employee  may be disciplined for his or her speech depends  on whether the speech addresses a matter of  public concern and whether the government's  interest in efficiency outweighs the employee's  interest in speaking out. See generally Connick  v. Myers, supra; Pickering v. Board of Education,  391 U.S. 563 (1968). Truth is not a defense.  Collapsing these distinct standards confuses the  issues presented by this case. Contrast Waters v.  Churchill, 511 U.S. 661, 671-75 (1994) (plurality  opinion) (making a point of distinguishing the  sorts of the first amendment restrictions placed  on a government in its sovereign capacity and  those placed on a government in its capacity as  an employer). In fact, as this case is plainly  governed by the law regarding employee speech,  there is no need to discuss the law of defamation  at all.

