Former San Luis Obispo mayor canned, loses discrimination lawsuit

April 9, 2025

By KAREN VELIE

After leaving her job as the mayor of San Luis Obispo, Heidi Harmon accused her new employer of racism and for using an incorrect pronoun – issues that prompted Harmon to file a lawsuit she lost last month.

Harmon resigned as mayor in 2021 to take a job with the Romero Institute’s Let’s Green CA, a nonprofit affiliated with electric provider Central Coast Community Energy, a company she endorsed as mayor.

Six months after she was hired, Harmon became concerned with what she determined were racist comments made by the agency’s director, allegations she later listed in her lawsuit against the Romero Institute.

“She is a Chinese professor, so you know she is smart,” according to the lawsuit. “He is Indian, so he’s smart. I am working with a Black donor, so I know she will like our work with poor people because blacks care about poor people.”

Harmon then asked management to conduct diversity, equity, and inclusion training, which they agreed to do.

During the first training, Romero Institute’s president and general counsel Daniel Sheehan told a personal story about an instance of racial discrimination he had witnessed years ago, and he twice repeated words used by a third party which included the n-word, according to the court ruling.

Harmon found Sheehan’s speech unacceptable. He then apologized to staff at a DEI “healing” session three months later, according to court records.

A year and a half after she was hired, the Romero Institute laid off four employees, including Harmon, and eliminated their positions because of financial issues. Harmon called foul, arguing she was fired for speaking out.

Harmon filed the lawsuit on Oct. 25, 2023 alleging retaliation, failure to prevent discrimination, aiding and abetting, wrongful termination, negligent hiring and retention, and defamation. She sought compensatory and punitive damages along with attorney fees and court costs.

In March, Santa Cruz Superior Court Judge Timothy Schmal ruled in favor of the Romero Institute and against Harmon on all causes of action, largely because Harmon’s evidence was made up of “inadmissible hearsay.”

In addition, Schmal said the Romero Institute “is entitled to costs of suit, to the extent allowed by law.”

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