He seems to have had a reputation for hard living and fighting, and his appointment in 1919 to the post of Police Chief of Matewan, by the mayor, Cabell Cornelis Testerman (1882–1920), surprised some of the more "respectable" townsfolk.

On June 2, 1920, in Huntington, he married Jessie Lee Maynard (1894–1976), the widowed second wife of Testerman, who had been mortally wounded in the battle.

The speed of the marriage (they were married 11 days after Testerman's death, the morning after being arrested in a hotel room together and charged with having "improper relations") led to an attempt at arrest and accusations by Thomas Felts and the Baldwin–Felts spy, Charles Lively, that he, not Albert Felts, had shot the Mayor because of his desire for Jessie.

However, according to Jessie, her first husband, aware of the danger of their situation, had asked that his friend take care of her and their young son, Jackson (1915–2001), should he be killed.

He was sent to stand trial with his friend and deputy, Edward Chambers, on conspiracy charges for another incident, in Welch, West Virginia.

At this location, the mine guards had a reception committee waiting for them, with bloodhounds and machine guns, while Lively made himself busy on the telephone.

There was an outpouring of grief for the fallen local heroes at the funeral, which was attended by at least 3,000 people, and conducted with full honors from the Odd Fellows, Knights of Pythias and Redmen (he was a member of all of these organizations).

Director John Sayles' Academy Award-nominated 1987 film Matewan starred David Strathairn in the role of Hatfield.