The situation was that Hayes was talking with MVP, joking around because they are close behind the scenes. MVP was discussing how cool Hayes was in his day and jokingly said, "You're more of a n*gger than I am."
Later in the day Hayes was talking with Mark Henry and was trying to get him to open up his character and be more out going. Like African American's used to be portrayed, and stated to Henry, "I am more of a n*gger than you are." There were witnesses to the conversation. Later in the evening, Hayes gave Henry a playful head butt (this was a Freebirds trademark to show that they liked you, dating back nearly 30-years) and Henry told him never to do that again.
It was after all of that when Henry went to Vince McMahon about the situation. Some with in the company feel that Mark Henry made too big a deal about it, and many friends and supporters of Hayes have heat with Henry. Many people thought Hayes was untouchable, but Vince McMahon suspended Hayes himself.
Until Hayes returns, Ed Korskey and Christopher DeJosephs (who plays Big Dick Johnson on WWE TV) will take over as the writers for Smackdown and ECW. DeJosephs had been writing for ECW since Dave Lagana was fired and Dusty Rhodes left for Florida Championship Wrestling.
Credit: The Wrestling Observer Newsletter