West Ham is facing the prospect of a multi-million pound compensation pay-out after Alan Curbishley won his claim against the club for constructive dismissal on Wednesday.
A Premier League manager's arbitration tribunal has upheld Curbishley's claim after he resigned at the start of last season following the sale of Anton Ferdinand and George McCartney to Sunderland against his wishes.
The tribunal will now assess the level of compensation West Ham must pay - a similar case brought by Kevin Keegan against Newcastle for constructive dismissal saw the Magpies ordered to pay two million pound in damages plus 1.5 million pound in legal costs.
Curbishley, 51, said he had had no option but to walk out in September last year after nearly two years in charge of the Hammers.
He said: "I am obviously delighted with this result. I very much enjoyed my time at West Ham and never wanted to leave, but on joining the club I insisted that my contract contained a clause confirming that I would have final say on the selection of players to be transferred to and from the club.
"The club completely ignored my contract when selling Anton Ferdinand, and when George McCartney was then sold, the club having given me assurances that no players would be leaving the club after the sale of Anton Ferdinand, I had no alternative but to resign.
"My authority and integrity were undermined and my position was made untenable. I now wish to put this entire matter behind me."
Curbishley quit the Hammers at the start of the season and launched a claim for wrongful dismissal after which the club launched a counter-claim relating to the cost of employing his successor Gianfranco Zola and his assistant Steve Clarke. The counter-claim has proved unsuccessful.
Richard Bevan, chief executive of the League Managers' Association, said the outcome demonstrated the need for clubs to respect contracts.
Bevan said: "Naturally we are delighted with the outcome for Alan but, at the same time, sorry that he wasn't able to continue at West Ham United, a club that has played such a prominent part in his professional career both as a player and manager.
"The findings of the tribunal demonstrate the critical importance of respecting contracts which need to set out the roles and responsibilities of the parties in clear and unequivocal terms."