But Lane won only a partial victory. The high court also ruled that the college's former president is immune from damages under laws shielding public officials from lawsuits in their official capacity.
Writing for the court, Justice Sonia Sotomayor said Lane's testimony was constitutionally protected because he was speaking as a citizen on a matter of public concern, even if it covered facts he learned at work.
In past cases, the court has said that public employees generally do not have free-speech rights when they discuss matters learned at their jobs. But Sotomayor said sworn testimony in judicial proceedings "is a quintessential example of speech as a citizen for a simple reason: Anyone who testifies in court bears an obligation, to the court and society at large, to tell the truth."
Sotomayor was careful to note that Lane's job responsibilities did not include testifying in court proceedings. She said the court was not addressing whether the ruling would apply to other public workers, such as police officers or crime investigators, who routinely testify in court.
"This ruling gives a green light to all public employees who have information concerning official corruption and fraud and want to expose these crimes," said Stephen Kohn, Executive Director of the National Whistleblower Center. He predicted the decision would have a "wide impact" on investigations of securities, banking and tax fraud.
Lane was director of a college youth program at Central Alabama Community College in 2006 when he discovered that a state lawmaker, Sue Schmitz, was on the payroll but not showing up for work. Lane fired Schmitz despite warnings that doing so could jeopardize his own job.
Federal prosecutors began investigating Schmitz, and Lane was later called to testify before a federal grand jury and under subpoena at Schmitz's two criminal fraud trials. Lane claimed he was fired in retaliation and sued Steve Franks, the former college president, as well as the college's current president, Susan Burrow.
Lane lost at the trial court and before the 11th U.S. Circuit Court of Appeals. The appeals court also found that Franks was shielded from liability because he was acting as a public official.
The Supreme Court agreed that Franks was entitled to immunity because, under the 11th Circuit's opinions at the time Lane was fired, it wasn't yet clear that public employees who testified in court had First Amendment protection. The court remanded the case for further consideration of the claims against Burrows.
Andrew Brasher, solicitor general in the Alabama attorney general's office, said the case now returns to a lower court for review of Lane's request to be reinstated.
Brasher said the state will argue Lane can't win his claim against Burrows because state employees have immunity, the position no longer exists and he was fired because his program ran out of money, not because of his testimony in the public corruption trial.
The case is Lane v. Franks, 13-483.
Associated Press writer Phillip Rawls in Montgomery, Alabama, contributed to this report.
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