My first reaction is the same as many other respondents: do nothing. Think evil thoughts, but do nothing. Anything you do, legal or not, will cause you at least some trouble down the road. Why give the witch the satisfaction?
In 30 years of work I have never once seen a company succeed when people like her were allowed to stay. Not once. The person was either fired or the company went under. So smile, say goodbye, and be thankful that you got onto a lifeboat before the Titanic went under.
Anyone out in TSD-land who’s interested in workplace craziness should read (besides Scott Adams, of course) “Toxic Co-workers”. Can’t remember the authors but search Amazon. As a real guide for dealing with workplace craziness, the book is useless; the authors are psychologists who love to describe Personality Disorders but don’t give you any useful strategies for dealing with them. Why then do I recommend it? Cuz the anecdotes are hilarious! I mean, some people are really wigged out. (I include myself.)
Finally, as a thought for revenge: Two pounds of fresh fish. Wrap in freezer paper. Tape down inside front left hubcap of car.

