ESSEX County Council is fighting a tribunal hearing which ruled its top lawyer had praised Hitler in front of staff.
The council solicitor, Phillip Thompson, implicated in the case, will step down as president of Lawyers in Local Government (LLG) in the interim.
At a governance conference at Stansted Airport on Wednesday last week, the authority's head of legal services, said: "A few weeks ago I mentioned an employment case decided against my authority in which I had been named.
"My authority has lodged a notice of appeal and I have decided to stand aside from my role as president of LLG while the case progresses, lest it distract from the work of LLG."
Mr Thompson was heavily criticised following the tribunal brought by black ex-employee Evelyne Jarrett in September.
It found she was unfairly dismissed by Essex Legal Services (ELS) – which is overseen by the county council – and discriminated against on the grounds of race.
It was alleged that her boss, Mr Thomson, "did make inappropriate references to Hitler, that good practices could be learnt from his management techniques," as well as earning himself the nickname Piggy Eyes for the way he ogled women.
Ms Jarrett, an experienced solicitor herself, worked as team manager at the Chelmsford offices for two-and-a-half years but was made redundant in April 2012. She claimed her dismissal followed racial discrimination, harassment and victimisation from her managers.
Upholding these claims in a written decision, tribunal judge Martin Warren said: "Any positive reference in the workplace to Hitler has the potential to be highly offensive to any person of ethnic minority origins because of his responsibility for the murder of millions of such people and for pronouncements of belief in the superiority of people from one race over people from another, or any other.
"There was a culture of attributing inappropriate nicknames: starting with Mr Thomson as 'piggy eyes' (an apparent reference to the way he looks at women). The claimant referred to as "Evil Lyn" which she understandably found very offensive."
Ms Jarrett, who now lives in Bedford, has since called for an independent investigation into ELS and the actions of the senior management team. Bev Cullen, LLG vice-president and assistant county solicitor at Lancashire County Council, will now take over as president, with Mr Thomson remaining on the board.