A civilian employee was fired from a police department after she
remarked, "to bad they didn't kill him" or similar words in reference
to the shooting of President Reagan.  I believe the termination was
overturned.

1) Where did this occur and who was the employee?

The employee was Ardith McPherson and the incident happened in Harris
County, Texas.  Details can be found in the case of Rankin et al. vs.
McPherson, 483 U.S. 378.  The U.S. Supreme Court indeed found (on a
5-4 vote) that the comments of McPherson, who was reported to have
said, "if they go for him again, I hope they get him," were protected
under the First Amendment.

Rankin vs. McPherson
http://www.law.umkc.edu/faculty/projects/ftrials/conlaw/rankin.html

Google search term: "free speech" employment Reagan
://www.google.com/search?q=%22free+speech%22+employment+reagan&sa=Google+Search

Best wishes,

mvguy