Former San Luis Obispo mayor Harmon wins appeal

September 30, 2026

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 through a summary judgement in 2025. Harmon appealed the ruling and will now have her day in court.

The California Court of Appeal reversed the judgment and sent Harmon’s retaliation and wrongful termination lawsuit back for trial.

In March 2025, Santa Cruz Superior Court Judge Timothy Schmal granted a summary judgement 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.”

However, the Court of Appeal ruled Harmon presented sufficient evidence to raise triable issues, and that key evidence excluded by the trial court as hearsay was admissible.

Among the hearsay evidence was testimony that, after Harmon filed an internal complaint, Romero Institute Executive Director Sara Nelson allegedly
said Harmon “causes us all the trouble” and that once the investigation was over, “we are going to wait 30 days and let her go.” The Romero Institute maintains that Harmon was terminated for financial reasons.

The Court of Appeal determined the competing evidence presents issues for a jury to decide.

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.

The Court of Appeal directed the trial court to vacate the summary judgment ruling and proceed to trial on Harmon’s remaining claims, including retaliation, failure to prevent discrimination, aiding and abetting, wrongful termination, and negligent hiring and supervision. Harmon’s defamation claim was not reinstated.

Harmon is represented by Christina Humphrey, founder of Christina Humphrey Law, P.C.

“Throughout my life, I have tried to stand up for what I believe is right, even—and especially—when doing so is difficult,” Harmon said. “I believe people should be able to raise legitimate concerns and demand accountability without fearing retaliation.

“I am grateful that the court has ruled that my claims can move forward and that I will have the opportunity to present the evidence underlying my allegations of wrongful termination and retaliation against the Romero Institute,” Harmon added. “Bringing this case has not been easy, but accountability matters. I have confidence in the judicial process, and I look forward to presenting the evidence and allowing the facts to speak for themselves.”

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