What hasn't been made clear, is whether Shirley Sherrod had a political (exempt) appointment, or if hers was a regular Civil Service appointment. If it was a Civil Service job, it would have been almost impossible to fire or even demote Sherrod for the reasons stated. If it was an exempt appointment, Sherrod would have been serving at the pleasure of the Obama Administration, and could have been fired for any reason or no reason.
I gather that Sherrod had a long history of employment with the Department of Agriculture. I'm guessing that she may have had an exempt appointment to a political position, and would have had rights to retreat to her previous job.

-Joe Offer, retired investigator, U.S. Office of Personnel Management-