SAN FRANCISCO — A federal jury decided Thursday that the city of San Francisco owes a local contractor $3.6 million for improper termination, but stopped short of agreeing that the city cut the company off for criticizing the way it handled some projects.

Mitchell Engineering, which had worked on San Francisco’s fresh water system, among other things, argued that city officials tried to run the family-owned construction company out of business in retaliation for speaking out about the way the city handled the Public Utility Commission’s $4 billion seismic waterway upgrade, among other projects. Mitchell asked for more than $20 million in damages.

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