One answer, as according to Kevin O’Keefe, is counter intuitive. Kevin’s answer to the question in a bit, but first: What are the legal options a company can take to prevent an ex-employee from gossiping about the company on the Internet and possibly hurting the company’s reputation? In California, generally speaking there is not much a company can do. First, the former employee has the freedom of speech, and even if the company has a non-compete agreement (which are typically difficult to enforce under California law) the agreement probably does not address this situation. Only if the former employee discloses trade secrets, or other confidential information protected under the law, can the company bring legal action against the former employee to prevent publication. Generally stated, the company has an up-hill battle, and legal action should be the last resort.
Kevin suggests an alternative to legal action: start blogging. While Kevin is biased to blogs (he is the owner of Lexblog – the developer of this blog), his solution is excellent: “A blog, as a means of handling disgruntled employees on the net, may be a bit frightening for corporate heads and PR/communications professionals. But times are changing. Practicality requires doing things differently than they've been done in the past.” While I suggest approaching Kevin’s recommendation with caution (for example, a company would not want to start airing its dirty laundry – especially if potential legal actions are on the horizon). But if the employee has the freedom to sway public opinion via the Internet – the company should also counter this in the marketplace of ideas.