Another thing an employee should do if they think there's a possibility they could get sued-even if they haven't done anything wrong-is to have their new employer indemnify them. Have an understanding with your new employer in writing that if for any reason you're sued and you've done nothing wrong, that your new employer will cover your legal expenses.
Will a new employer really go that far? I would think that if there's any risk that a potential hire would get sued by a former employer, that the new employer wouldn't want to touch the candidate with a 10-foot pole?
It depends on the industry. It is a fact of life that some industries are incredibly competitive and that some employees are very valuable because of their contacts with customers and suppliers. In these industries, there's an understanding that if you hire someone from a competitor who is a really valuable commodity, there might be litigation. But if you don't hire those good people, you're not going to grow your business. It may just be a cost of doing business.
In some ways, the more valuable the employee is, the more valuable they are to both the former and the current employer, which increases the likelihood of litigation.
What can the new employer do to protect itself?