Former San Luis Obispo Mayor Heidi Harmon has lost a lawsuit claiming she was wrongfully laid off from her job at a California environmental justice group after reporting “racialized/racist comments” from her supervisors.

Harmon, who was laid off from the Romero Institute’s Let’s Green California! Project offshoot in February 2023, filed a lawsuit in Santa Cruz County Superior Court later that year alleging her termination was retaliation for reporting discriminatory comments made by two members of the Romero Institute leadership.

She also alleged the nonprofit law and public policy center failed to prevent discrimination and harassment; was negligent in its hiring, supervision and retention practices; and that she had been defamed during an investigation into the comments.

A Santa Cruz County judge, however, found there was not enough evidence to support Harmon’s suit.

On March 10, Judge Timothy Schmal issued a ruling in favor of the Romero Institute.

“Plaintiff’s attempts to dispute material facts fail, largely because her evidence in support is made up of inadmissible hearsay,” Schmal wrote in the the judgment.

Harmon did not respond to Tribune requests for comment on the ruling as of Thursday morning.

Former SLO mayor claimed she was wrongfully fired from environmental group

Harmon left San Luis Obispo in 2021 after five years as mayor to go work as the public affairs director for the Let’s Green California! Project.

Prior to her departure, Harmon was an outspoken climate activist who helped spearhead the city’s aggressive climate goals.

In her complaint, Harmon alleged that soon after starting work at Let’s Green California!, she learned the group wasn’t “the bold, social-justice-oriented project that she had been promised.”

She claimed that executive director Sara Nelson made “consistent and repeated offensive, racially charged comments” such as “she is a Chinese professor, so you know she is smart.”

These comments prompted Harmon to request diversity, equity and inclusion training for the group, and she was told she could organize it, the lawsuit said.

During one of the sessions, Harmon said president and general counsel Daniel Sheehan — who is also Nelson’s husband — “aggressively and enthusiastically shouted the n-word (with a hard ‘r’).”

The incident upset other employees and led to human resources launching an “accountability process” in which Sheehan was disciplined, court documents said. He also apologized during a later DEI “healing” session.

The following day, Harmon filed a formal complaint, and the Romero Institute retained formal counsel to investigate the claims.

The internal investigation confirmed some details of Harmon’s initial complaint but also concluded that in general the language used by Nelson and Sheehan was “unlikely to be found to be sufficiently severe or pervasive to rise to the level of harassment,” court documents said.

Six months after filing her complaint, Harmon was notified she was being laid off alongside two other employees.

In her lawsuit, Harmon said she was “an exemplary employee who was in good standing and without any performance issues at the time of her termination.”

This led to her lawsuit claiming the firing was retaliatory in nature, among the other claims.

She also alleged that during the investigation into the incident she was defamed by Nelson, but the judge ruled that was not the case.

Environmental group says layoffs were due to finances

In its initial answer to Harmon’s lawsuit, the Romero Institute asserted that Harmon was not laid off “for unlawful purposes” but instead due to financial straits at the Let’s Green California! Project.

According to court documents, the project brought in $61,424 in revenue in 2022 — and spent $986,206. The Romero Institute as a whole meanwhile lost $1.6 million in 2022 compared with a profit of $1.3 million the year prior.

Because of that, the center decided to lay off two employees in 2022 and four people in 2023. Those positions have not been filled, according to court documents.

Given its financial situation — and no evidence that the individuals making layoff decisions were aware of Harmon’s complaint — the judge ruled there was not enough evidence to support Harmon’s suit.

“The court finds as a matter of law that there are no disputed material facts establishing a triable issue of fact that plaintiff’s separation from (Romero Institute) was retaliatory, and the single allegedly defamatory statement was privileged and no triable issue of malice is shown,” Schmal wrote in his ruling.