Former Finance executive and three others filed a case in court challenging their dismissal.
Detectives say Mr Muktar's assailants trailed him to his car and shot him in the head at close range.
Garissa Governor Ali Korane was arrested on Tuesday as investigations into the shooting of a former county executive intensify.
Mr Idriss Aden Muktar, the Finance executive during Governor Nathif Jama's term, was shot outside a city hotel on Monday.
Detectives say Mr Muktar's assailants trailed him to his car and shot him in the head at close range. He had just been praying at a mosque and was leaving for his house when the gang struck.
Governor Korane was arrested as he left his house in Kileleshwa around 5am. Police officers camped outside the house the whole night.
Police sources told the Nation that three other people are being interrogated.
Mr Korane was held at an unknown location before being taken to Nairobi Area Police Station at 8.30am. He was still being quizzed by 5pm.
TRAILED BY WOMAN
Journalists and the public were locked out of the station. Only lawyers and top government officials were allowed past the gate.
Nairobi County Criminal Investigations head Nicholas Kamwende was in the interrogation team.
The three others in custody include a man believed to be the shooter and a woman said to have hired the car used to trail Mr Muktar.
There was anxiety in Garissa when news of the governor's arrest reached the area.
Some of his supporters said he is being persecuted for political reasons. According to the County media team, the arrest is a plot to malign the governor’s name.
“Mr Korane does not bear grudges against former county workers. The employees had actually sued the previous administration. The media should know the difference between making a police statement and being arrested,” the statement said.
Mr Mohamud Abdi, who described himself as an elder, said the governor's arrest is shocking.
“He is the last person anyone expected to be named in this incident. Justice should prevail,” he said.
Garissa-based activist Khalif Abdi said police should carry out through investigations to unravel the mystery behind the shooting.
“Mr Muktar’s family is crying for justice. It was a heinous act of attempted murder. We want police to ensure justice is served,” he told the Nation in Garissa town.
Governor Jama dismissed Mr Muktar and three others in July 2016. The four later challenged the action in court.
They were awarded more than Sh50 million in damages. However, Mr Korane's administration launched an appeal against the ruling.
Additional reporting by Stella Cherono