I also mentioned that possibility to my husband. We all share the same office space, so I wonder if a lawsuit like that could extend to the company…
I don’t think she’s the kind of person who would do that, but when she tells her husband what happened, he might be.
No, this is not a hostile work environment situation. Legally speaking, hostile work environment means hostile toward a legally protected class (women, minorities, people with disabilities). Being just plain hostile, as in mean, is not illegal unless it crosses the line to assault, slander, libel or some other illegal act.
That said, what an ass. What the former employee may be able to allege is that this was not a voluntary separation, that she was effectively terminated, and thus entitled to unemployment benefits. That benefits her, hurts the company a little, since their unemployment premiums may go up a little (probably very little, since she was a short-term employee).
Here is info about unemployment eligibility based on Massachusetts policy, which is considered a state generous to the employee http://www.masslegalservices.org/docs/UnemploymentGuide-3.pdf
How these things are handled varies by state. The employer generally has the right not to contest unemployment claims, letting the former employee receive the benefit without proving eligibility as required for a contested claim.
Family businesses, yukk, especially for non family members. Which your former employee learned very much the hard way. I appreciate that you stood up for her.