A reporter for The Knoxville News-Sentinel was fired last Friday after refusing to give up her seat on the five-member school board of Alcoa, Tenn., a town 15 miles south of Knoxville.

The dismissal of Jacqueline Brown McClary, 31, raised a longstanding question about reporters' rights of free speech and to what extent they should be allowed to participate in local government.

Two days after her election to the Alcoa school board June 4, she was given until the end of last week to resign from the board or the newspaper.

McClary refused to give up the nonpaying school post and, when she reported to The News-Sentinel on Friday, was told that she would be terminated.

News-Sentinel editor Ralph L. Millett Jr. said Friday that McClary was told to make a choice based on "our policy which prohibits political activity by our employes that could raise questions about the paper's objectivity . . . . She was told this before the election."

McClary said that when her election campaign began, an assistant editor told her that if she won, the newspaper might question her position. However, McClary said she believed that since she is not an education reporter and because the paper rarely covers Alcoa school events, there was no potential for conflict.

Diana Tillinghast, who teaches mass media ethics at Stanford University, said that The News-Sentinel "was stretching the policy to include McClary " and that she saw a conflict only if McClary had been covering Alcoa or the education beat.

Edwin Bayley, dean of the graduate journalism program at the University of California at Berkeley, disagreed, saying, "I think reporters have to make up their minds whether or not they're going to be neutral." Bayley said reporters can participate in their community by reporting on it.

Editor Millett is chairman of the Knoxville Parking Authority, a rate-setting body to which he was appointed by the mayor. A News-Sentinel conservation reporter is a member of the Great Smoky Mountains National Park Commission, Millett said.

Millett said he interprets the company rules to mean that he and the conservation reporter are exempt because their positions are appointed, advisory positions and not elective posts. He also said that it is he who decides whether an employe's outside activity is political or not.

"It seems grossly unfair," McClary said of the newspaper's position. A former reporter for Business Week magazine, she had been a New-Sentinel reporter for two years.

"I got into the campaign because of my concern for my children," said McClary, mother of three sons ranging in age from 9 months to 12 years and first black woman to be elected an official in Alcoa, whose school population is 1,300.

The school system is about 25 percent black, and school board chairman Lloyd Costen said that "her being elected is a mandate from the community."

Knoxville Newspaper Guild president John R. Barrett said the union would file a grievance on McClary's behalf, contending "that civic duty is not a just and sufficient cause for discharge."