Teresa Smith filed her U.S. District Court lawsuit against the city last week. The city will have 30 days to respond.
City commissioners voted to terminate Ms. Smith in December 2005. The majority cited numerous complaints from businesses that dealt with the engineering department under Ms. Smith's leadership.
Ms. Smith, who is black, contends in the lawsuit her ouster was due to the anger of a number of powerful, white developers who pressed white city commissioners to get rid of her.
According to the lawsuit, Ms. Smith alleges Commissioners Jimmy Smith and Don Grantham led a harassment campaign that included a grand jury investigation.
In March 2005, city commissioners voted to break up the public works and engineering department. Ms. Smith alleges the positions of public services and solid waste directors were given to two white men who were paid as much as she was, or more.
Ms. Smith contends she was a sacrificial lamb unfairly fired for alleged conduct that did not result in the termination of white employees.
She seeks reinstatement, back pay, and unspecified compensatory and punitive damages.