SOMETIME LAST JANUARY, a radical proposal landed on the desks of Stuart Eizenstat's aides in the Old Executive Office Building. It was a draft "decision memo" on civil service reform - the "centerpiece" of President Carter's reorganization plans and the main vehicle for his efforts to "increase government's efficiency by placing new emphasis on the quality of performance of federal workers."

The memo, prepared by the Civil Service Commission and the Office of Management and Budget, certainly fit the president's requirements, particlarly in the critical area of removing "non-performing" employes. To replace the byzantine structure of hearings, notices and appelas to which civil servants were then entitled, the memo proposed a simple procedure: employes could be dismissed by the con-currence of three supervisors-the one who initiated the discharge, a higher-up and a third supervisor experienced in deciding such disputes. If these three agreed that an exploye wasn't performing up to snuff, the exploye would be fired, then and there, with only a limited right of appeal for "substantial procedural error."

Despite the proposal's fairly dramatic potential for improving bureaucratic performance, some of Eizenstat's aides wre troubled. For one thing, the memo surely would provoke opposition from federal employe organizations. But bargaining with the unions was to be expected, and there was even some virtue in starting the negotiations from a tough positions. No, there was another, trickier problem-the proposal might be unconstitutional.

Simon Lazarus and Steven Simmons, two lawyers on the Domestic Council, were particlualrly disturbed by this possibility. They called in some legal scholars and the Justice Department. Yes, came the answers, there were indeed constitutional difficulties. While the decisions of the Supreme Court were fuzzy, they appeared to require that every civil servant be given a full-fledged trial-type hearing before he could be finally discharged. Armed with these opinions, Lazarus and Simmons successfully led a push to change the draft proposal. By the time the decision memo reached Carter's desk, the right to an evidentiary appeal had been restored.

After the White House sent this revised proposal to Congress, and at each stage in the bill's passage into law, what had happened in the Executive Office Building happened again. Those who wanted to make it less difficult to fire incompetent civil servants not only had to negotiate with the employe unions, and their congressional champions, but with an unseen third party - the Supreme Court.

During the House-Senate conference, for example, Rep. William Ford (D-Mich.) repeatedly and effectively argued that unless more protections for employes were added, the whole reform package would be threatened. "The very first case of any consequence is going to be in the courts," Ford warned the conferees, "and then Scotty [Civil Service Commission Chairman Alan "Scotty" Campbell] is going to be sitting with a death row over there of thousands of cases waiting to see what the Supreme Court is going to do."

By the time the bill became law, the provisions for firing unproductive civil servants had expanded to become a complex three-stage pyramid of procedural hurdles: First, an employe is entitled to 30-day notice of the "adverse action," and a chance to rebut the charges against him. Then, if he wants, he is entitled to a trial-type hearing before the new Merit Systems Protection Board (MSPB), at which his agency must demonstrate that "substantial evidence" supported the decision to fire. Finally, the discharged employe can seek review of the MSPB's ruling in a federal appeals court.

Due Process Clause

SO, IF YOU'RE expecting the new civil service reforms to create, as Carter put it, "a climate in which managers may discharge non-performing employes," don't hold your breath. It's easier now to fire a civil servant, but one shudders to think how long an employe with the right kind of lawyer could prolong the appeal of a discharge under the new system.

The administration hopes, at best, for a 60-day "turnaround" between the date of firing and the decision of the MSPB. The board that performed the MSPB's function before the recent reorganization, however, took an average of 168.9 days to decide each case. And that's just the appeal to the MSPB. Tack a 30-day notice in front of that, and a trip through the clogged federal appeals court at the end, and you've still got a system under which supervisors will be asking themselves, "Is it worth a year or more of my time trying to fire this guy?"

What the history of the civil service bill shows is that the main obstacle to changing this system is no longer the Congress, or even the unions - it's the courts. It was the threat of unconstitutionality - of judicial veto, as it were - that scared Carter's aides and supporters into watering down their reforms.

The part of the Constitution that caused all the trouble is the due process clause, which says that the government shall not "deprive any person of life, liberty or property without due process of law." Just reading the provision, you might not think it was designed to protect civil servants. But, knowing the need for judges to elaborate on the Constitution's purposefully vague language, you might speculate that firing a federal employe would be construed, in some esoteric way, to be a deprivation of, er...liberty? The liberty to engage in a profession perhaps - "the right to type," you know, that sort of thing. You would be wrong. Firing a federal civil servant does not per se deprive him of "liberty" under the due process clause. What a civil service job is, in modern constitutional theory, is property.

Today, law students know they are well on their way to "thinking like lawyers" when this strained reading of the Founding Fathers' words begins to make sense. Forty years ago, however, the average attorney would have stared back in disbelief at anyone who told him that a federal job was property, just like a plot of land. I took a lot of ambitious thinking, and a bit of history, before the idea became second nature.

But if two men have to take credit for the spectacular growth of the constitutional job rights of government workers, they would probably be Sen. Joe McCarthy and Charles Reich (the latter better known as author of the '60s bestseller, "The Greening of America.") Let's start with McCarthy.

Great Liberal Victory

PRIOR TO THE 1950s, the law on firing government employes was fairly simple: the government could constitutionally fire an employe without jumping through any procedural hoops. Moreover, the government employe worked - as far as the Constitution was concerned - at the will of his superiors; he could even be sacked solely because of his political inclinatins. These principles were neatly summed up in Oliver Wendell Holmes' 1892 statement that a policeman "may have a constitutional right to talk politics, but he has no constitutional right to be a policeman."

All that changed during the McCarthy era, as red-hunters searched the government payrolls for communists and their sympathizers. A generation of liberal lawyers was weaned on the struggle against the persecution of these employes, and it was a great liberal victory when, in 1956, the Supreme Court stopped the dismissal of a New York college teacher who had been fired for taking the Fifth Amendment at a federal loyalty inquiry.

In presuming that this act was an admission of guilt, the Court said, the state had failed to afford the teacher the "due process" required by the Constitution. The Court didn't specify, in terms of the language of the due process clause, just what the teacher had been deprived of - was it life, liberty or property? But this was no time for conceptual nicety, and over the next decade "due process" was repeatedly invoked in attempts to save the careers of officials charged with subversive leanings. Taking away someone's government job had become a serious constitutional matter.

In 1964, Reich entered the picture. He was troubled by the growing importance of government largesse - from welfare payments to broadcast licenses to admission to the bar, the well-being f more and more Americans seemed to depend on what their country could do for them. In a sweeping and original article, Reich described this growing dependence as a threat to individual liberty.

His solution was to restore the status of the individual citizen by giving him constitutional rights to the largesse he received. Significantly, the right on which Reich seized as his model was the property right, and he argued that all manner of government benefits should be "property" under the due process clause, with elaborate procedures (the "due process") required before the benefits could be withdrawn. Just as 10 acres and a mule had been the basis for individualism in earlier times, Reich reasoned, so his "new property" could preserve individual freedom in the "joyless landscape of the public interest state."

Surprisingly, while Reich noted that the government accounted for 20 percent of all jobs, and that many other jobs depended on government contracts, he didn't put much emphasis on protecting the interests of government workers.Instead, he concentrated on cases, like cutoffs from welfare benefits, in which the injustice of arbitrary government action seemed overwhelming.

But Reich's article fell on the receptive ears of a booming civil rights industry, whose whole raison d'etre was finding more and more ingenious applications for new constitutional theories like Reich's. Law reviews - Student-run journals that are the primary outlets for American legal scholarship - soon converted Reich's proposal into an abstract legal formula capable of almost unlimited application.

The courts, wrote one eager law reviewer, should "regard life, liberty and property as encompassing everything of which a person can be deprived, and hold that a person has a claim within the ambit of the due process clause whenever governmental action has accrued to his detriment." All that you needed to make a "new property" right was some action by the government that was hurting somebody, and liberals had a field day finding injustices that could be cured by application of this recipe.

More Cautious at First

THE SUPREME COURT was a hit more cautious in its approach, but after a few years of exhortation by the legal journals - and after a few of the law students who had written those articles had served their tours of duty as assistants to the Justices - the Court started creating a series of "new property" rights. Welfare payments, of course, were first on the list, with the Court ruling in 1970 that a state couldn't remove a recipient from the rolls without first giving him a chance to prove his elighibility at a quasijudicial hearing. From welfare the Court moved on to drivers' licenses, which became "property" under the due process clause in 1971.

These decisions were well-received by the legal profession's avant-grade. But, the law reviews noted, there were still some areas where the new formula hadn't been applied. For example, what could be more important to an individual than his goverment job? "Given the modern emphasis on protecting individuals against significant inflictions of harm," one commentator complained, "why have the courts excluded public employes from the expanded panoply of the due process clause?"

In 1972, the inevitable happened. A political science professor at a Texas state college was dismissed, and he sued to get his job back. The job, the teacher said, was his "property," and the state shouldn't have been able to take it away without giving him, in effect, a mini-trial at which he could dispute the grounds for dismissal. The Supreme Court was unanimous in its agreement. In deciding that a government job could be "property," the Court handily cited as legal precedent the McCarthy-era cases that had reinstated employes in the name of "due process." But there was a key difference between those cases and the "new property" theory. In the 1950s, the courts had protected employes who had been fired for exercising some constitutional privilege, like the right against self-incrimination. The new rule applied indiscriminately to every deprivation of the "property interest" in a job. Whether you were discharged because you were a red, or because you slept at work, you were constitutioanlly entitled under the "property" doctrine to "due process."

Two years later, in Arnett v. Kennedy, a divided Court extended this "property" right to include the jobs of federal civil servants. At the same time, the Court announced its intention to guarantee those employees their "due process" even if the Congress chose to cut back on the procedures required in the statutes. A discharged employe, the Court majority implied, could demand a full inquest, with lawyers, testimony and cross-examination, if he chose to fight his dismissal.

Arnett is the case that gave civil service reformers in the Carter administration the biggest headaches. In effect, it presented them with a choice: give all employes the right to cumbersome trial-type hearings, or risk passing a law that would be stuck down by the Court. In fact, the threat of Arnett was so great that it was successfully used to attack a provision in the White House's bill that dared to go so far as to deny employes a hearing if there were no factual disputes to hear.

Since the effect of Arnett has been to help gut the most important piece of legislation Congress addressed last term, we have good reason to question the wisdom of that decision-and of the property rationale that underlies it. In private business, after all, the courts are quite willing to say that being fired isn't the end of the world for an employe-at least no court has yet ruled that the Constitution requires private employers to go through evidentiary hearings to determine if each and every discharge is justified. Why, when the government is doing the hiring and firing, is the situation so different that lawyers and judges should fall all over themselves with constitutional concern? New Layer of Red Tape

N RETROSPECT, the crusade for the federal employe's job rights appears to have been, at best, misguide - particularly from the point of view of the liberal lawyers who led it. The net effect of their efforts was to add a permanent layer of red tape to the bureaucracy, and to hamper the ability of the government to perform all the regulatory and redistributive functions liberals care about.

Even to civil libertarians, government employment is beginning to look like one area where the Court got carried away by the "new property" fad. Prof. Laurence Tribe, a liberal defender of judicial activism, admits concern over "attempts to squeeze public office-holding into the mold of private property entitlements." He notes a "thoughtful reconsideration" of the issue by Prof. William Van Alstyne, who concludes, "There is something abrasive and offensive, something anachronistic, in the idea that public sector positions can be appropriately described as the property of the individual status holder."

This "thoughtful reconsideration" has so far eluded the Court. Instead, even after Arnett, the justices preferred to see the Constitution as sort of super-Pendleton Act, extending the civil service laws to even those aspects of government employment untoched by the statutes themselves.

The absurd culmination of this attitude came in Elrod v. Burns, a 1976 case in which the Supreme Court imposed its version of the "merit system" on the venerable patronage machine of Chicago - and, incidentally, on all the other state, local and federal government institutions that had previously avoided the bureaucratic arteriosclerosis of the civil service.

Burns was a minor functionary in the office of the Republican sheriff of Cook County, Ill. As a bureaucrat in a patronage system, he could only expect to retain his job as long as his party remained in power. And, when the voters of Chicago elected a Democratic sheriff named Elrod, Burns was fired-as everyone knew he would be.

This time, though, the Supreme Court stepped in. Such patronage dismissals, Justice Brennen said in his opinion, were unconstitutional; they penalized Burns for expressing his Republican sympathies. The civil service ideal-that government service should be free from all political risk-had come to Cook County. Henceforth, according to Brennan, even political appointees at burns' level could only be fired for "good cause."

But the Court, we may imagine some astute law review editor pointing out, had yet to extend this principle to its ultimate application. That will happen the day the justices rule that a losing candidate for reelection can successfully sue to get his office back. After all, how could the courts allow him to be deprived of his valuable government job simply because of the views he expressed in a campaign?