Malky Mackay's appointment as Wigan's new manager "makes a mockery" of a Football Association inquiry, according to Leroy Rosenior.
The FA is looking into allegations Mackay sent homophobic, sexist and racist text messages while at Cardiff.
Former Brentford manager and Football League Show pundit Rosenior feels Wigan are "gambling on their reputation".
"People have made a decision without finding out what's actually happened," he told BBC Radio 5 live.
Rosenior, one of a small number of black managers to have taken charge of a Football League club, said he "had a lot of respect" for Wigan chairman Dave Whelan but felt the club had acted too soon.
"When someone's going through an inquiry in which he's been accused of racial slurs and racial texts, I think that inquiry needs to be brought to a head and it hasn't been," he added.
It is understood the FA has no timeframe for when the inquiry will be completed due to its complex nature.
Mackay replaces Uwe Rosler, who was sacked on 13 November, and takes charge of a side third from bottom of the Championship.
|Malky Mackay factfile|
|Born in Bellshill in Scotland on 19 February 1972.|
|Played for Queen's Park, Celtic, Norwich, West Ham and Watford during a professional career spanning 16 years.|
|Earned five caps for Scotland, the first coming at the age of 32.|
|Took over at Watford in 2009 following the departure of Brendan Rodgers.|
|Left for Cardiff in June 2011 and led club to the League Cup final in 2012 and promotion to the Premier League a year later.|
|Sacked by the Bluebirds in December 2013 with the side only one point above the relegation zone.|
|In August of this year, it was reported Mackay sent texts of a racist, sexist and homophobic nature during his time at Cardiff.|
"I'm really disappointed this has happened," said Rosenior.
"It sets a precedent that football clubs can go and do what they want depending on where they are in the league, but not depending on who the person is they are employing and what they've done in the past.
"I don't think that's right."
Anti-racism group Kick It Out accused Wigan of "disregarding the ongoing investigation" in appointing Mackay.
Former Wigan striker and now anti-racism campaigner Jason Roberts tweeted his disappointment when he learned Mackay had got the job at the DW Stadium. He expressed hope the FA would enforce a "zero tolerance policy towards any form of discrimination".
Wigan MP Lisa Nandy also urged Dave Whelan not to hire Mackay, but following his appointment issued a statement saying the club had assured her the decision was "consistent with the club's values".
QPR manager Harry Redknapp said Mackay now has "a second chance" to rebuild his reputation.
"He's made a big mistake," said Redknapp. "But he's working under a good man in Dave Whelan and I think he's a decent person."