Alex McLeish quit as Birmingham boss after a series of disagreements with the club's board, according to the League Managers' Association.
"Alex decided to resign because there were serious issues," LMA chief Richard Bevan told BBC Radio 5 live.
"It dates back to May when Alex's chief scout was sacked and not being consulted over player transfers."
McLeish stood down on Sunday and has since been linked with the managerial vacancy at Aston Villa.
The 52-year-old guided the Blues to Carling Cup success with a 2-1 victory over Arsenal at Wembley in February, but a dip in form followed which eventually culminated in their relegation from the Premier League.
McLeish - currently on holiday in Corsica - is pursuing a case for constructive dismissal against Birmingham.
"The LMA recognises it is often very difficult for clubs and chairmen, especially with the financial pressures and 24/7 media coverage," added Bevan.
"However, it is very disappointing that some clubs don't follow normal principles of employment law - which can undermine the game, the club and even the community the club is based in."
"Mr [Peter] Pannu, a senior member of the board, has put into the public domain confidential information contained in Alex's contract. This is without doubt a breach of confidence."
McLeish was understood to have resigned by e-mail - and Bevan hinted that Birmingham had acted inappropriately by releasing this information, which made McLeish's position "untenable".
"It is disappointing that Alex appears to have been criticised for sending his formal resignation letter by e-mail, particularly given that one of the issues Alex resigned over was Mr Pannu's sacking of Alex's chief scout, who learned that he was to be dismissed when he was copied in on an e-mail from Mr Pannu to one of the club's officials," said the LMA chief.
Chief scout Paul Montgomery worked for the club for more than two years before his dismissal last month.
Following Bevan's comments, Birmingham issued a statement on their website criticising the LMA's claims.
"The LMA's announcement is refuted as the club has a very rigid approval system where only players formally identified, and with approval forms signed and sanctioned by the manager personally are brought in," it read.
"The chief scout was sacked only after Mr McLeish was informed who at that time had chosen not to comment.
"The allegations against the club, president Carson Yeung and the board are frivolous excuses and without foundation and the matter is now with Birmingham City FC's lawyers."
Birmingham have also said they will lodge a formal complaint to the Premier League over what they see as Aston Villa's alleged "tapping up" of McLeish.