An arbitrator’s ruling that D.C. Fire Chief Kenneth B. Ellerbe unlawfully retaliated against the president of the city firefighters union is “sobering” and “not good for the department,” D.C. Council Chairman Phil Mendelson said Wednesday.

The decision, which orders the department to reinstate union President Edward Smith to a post from which he was transferred after he publicly criticized Chief Ellerbe’s policies, can be appealed. Mr. Mendelson, a Democrat and chairman of the Committee on Judiciary, with oversight of D.C. Fire and Emergency Medical Services, declined to speculate on what action he may take if the arbitrator’s decision is upheld.

“I have not read the decision, so I can’t speak to the reasoning there,” he said. “But the fact that the arbitrator did conclude that the transfer was improper, I think is sobering and suggests that the fire chief needs to be careful in his personnel actions.”

Others see the ruling as an indication of lingering issues that can bring more harm to the department if government officials from outside the agency do not step in.

“It hurts public confidence when arbitrators make these type of findings,” said Terry Lynch, an activist who heads the Downtown Cluster of Congregations. “I think the mayor and his team, they all need to step back, take a deep breath and just be fully engaged in civic services. It’s possible we need a change at the top of some of these agencies.”

Mayor Vincent C. Gray’s spokesman, Pedro Ribeiro, said Wednesday that the administration had no definitive reaction or plans to take action as a result of the arbitrator’s findings.

“It’s really a personnel matter with the FEMS,” he said. “It’s something the chief needs to address.”

The arbitrator’s ruling concluded Capt. Smith was moved from his post at Rescue Squad 1 to Engine 7 last year after he spoke out on behalf of International Association of Firefighters Local 36 on recent policy decisions made by Chief Ellerbe — including a change to the department’s logo, policies involving leave for pregnant firefighters and inadequate conditions in emergency vehicles. Arbitrator Leonard Wagman also wrote that Chief Ellerbe looked to manufacture a justification for Capt. Smith’s transfer.

Capt. Smith said he was pleased with the decision but also questioned how seriously it would be taken by the Gray administration.

“I’d like to know what the mayor thinks,” he said. “Is he finally going to hold the fire chief accountable for his actions?”

Mr. Ribeiro said the Gray administration has gone out of its way to build good relationships with labor unions, leading the charge to repay city workers for furlough days they took in 2011, only to see the District end the year with a $240 million surplus.

He said the mayor’s office listens to the concern of unions, including those in the public-safety ranks.

“Unfortunately, we can’t always do what folks want,” Mr. Ribeiro said.

Fraternal Order of Police Chairman Kristopher Baumann said the government needs to protect employees and hold department officials responsible when they are found to have retaliated.

“People in this town that work for the government are terrified to blow the whistle,” Mr. Baumann said. “Some people come forward, but they are very pessimistic about anything being done.”

Although the D.C. Council revamped laws protecting government whistleblowers in 2010, Mr. Baumann is still critical of the difficult path those within the police department — including himself — have had to trod.

“To litigate under whistleblower laws will take well over five years and cost well over $500,000,” he said, arguing that the process needs to be streamlined further.

Relations between agency heads and labor unions representing the District’s largest public-safety agencies — the police and fire departments — have been contentious in recent years.

“And I find that tension troubling,” Mr. Mendelson said, adding that he routinely brings together parties representing labor and management for discussions.

“In the end, I can’t make parties behave better,” he said.

Using the same style of sports metaphor that Mr. Gray has a tendency to invoke, Mr. Lynch pressed that the mayor should take action in Capt. Smith’s case.

“He’s the coach, and the penalty has been called,” Mr. Lynch said. “He’s got to do something.”

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