First, a former employee who makes demands based upon violations of employment law is almost always wrong -- the analysis is difficult, and the average employee doesn't understand how employment contracts work, and that employment is "at will" under California Labor Code 2922, which means that either employer or employee can terminate the employment relationship at any time, for any reason -- or for no reason whatsoever (exception for unlawful discrimination based on race, color, etc., or violation of a well-established public policy [e.g., jury duty, etc.]. What this all usually boils down to is that the employee can't find a lawyer to take the case, because the employee has no case.
Re your specific facts, salary-exempt employees are not entitled to overtime, unless their labor is in a role that is not exempt. Example: A claims adjuster who is required to clean the rest rooms in the office, may be exempt from overtime as a claims adjuster under the administrative exemption -- but the employee is entitled to hourly pay and overtime for cleaning toilets, because that is not an administrative exempt job function.
Re the claim that you are engaged in insurance fraud, reporting that to you does not create grounds for a wrongful termination action. In order to protect his/her job, the employee must report the alleged illegal/unlawful activity to the relevant law enforcement agency (i.e., Insurance Commissioner).
So, no claim here, from what I can see.
The term "wrongful termination," by itself, has no legal meaning. At common law, prior to circa 1871, wrongful termination could have meant creating conditions of employment so onerous that no reasonable person would remain in service to his master. Modernly, the term is meaningless, unless the employee can show some wrongful act by the employer that is recognized by California law.
Based upon your alleged facts, I see nothing wrongful in this employee's termination.
I can't tell you what to do, but if I were an employer, my response to this sort of situation would be to save the emails but not respond.
In case you wish to consult with local counsel, for a employment-rights lawyer referral, see this link.
Hope this helps.
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