The Utah Department of Commerce has not been officially served with the lawsuit, and the agency can't comment on specific allegations because there's an ongoing administrative procedure concerning Hines, said spokeswoman Jennifer Bolton.
But "the Department of Commerce denies Michael Hines' allegations raised in this complaint," Bolton said Tuesday in a statement.
Hines was fired in January, with his bosses claiming he had provided an investigative report to an attorney who was defending two people who were under investigation, according to the lawsuit.
The lawsuit claims that the firing came after Hines complained to the Office of the Utah State Auditor and the U.S. Department of Labor about a double time card system.
Hines received a "notice of intent" to fire him on Jan. 6, according the lawsuit. On Jan. 10, the auditor's office received a complaint about a dual time card system at a state department, said Debbie Empey, director of special projects, who said under state law she could not identity the person who complained.
The office investigated and its report is in draft form, she said. The report looks into a practice where some state employees work 44 hours one week and 36 the next, then take off a Friday. They do that by adjusting when their work week starts and ends so they do not put in more than 40 hours in one week and don't incur overtime, Empey said.
The audit of a sample of several state departments found no federal or state violations, she said.
"There's no noncompliance with federal Department of Labor regulations in the way it's set up and there's currently no noncompliance with state [personnel regulations]," Empey said.
Phone calls to Hines seeking comment Tuesday went unanswered. The attorney who filed the lawsuit on his behalf did not return an email or a phone mail message seeking more information.
The lawsuit claims the file Hines gave to the defense attorney mentioned in his termination notice probably would have been turned over anyway as part of settlement talks. It added that the division does not require a formal order before providing materials to attorneys.
In their notice of intent to fire him, officials said Hines' judgment was compromised by having "close personal and social relationships with some of the attorneys who represent targets of our investigations," the suit says.
"The reasons given in the notice of intent were without merit and a ruse to terminate Hines," it claims.
The suit also claims the dismissal came after Hines turned down an offer to become the new director of the Department of Alcoholic Beverage Control, a position from which he could be dismissed without cause at any time.
Hines was director of enforcement at the Division of Securities, which enforces laws related to financial investments, from 1995 until he was fired in January, the suit says.