My question: it is worth my time to contact HR department, explain that this happened and ask that they cease and desist, or whatever the legal term is? Should I get a lawyer to do this? I specifically want the supervisor in question to understand that my 30 year reputation is on the line here.
A: If your goal is to put the employer on notice that you are outraged by the defamatory remark of their employee at the job fair, then you can certainly do that. I would be careful not to claim outright that the former supervisor said anything in particular, because it could be turned around into a defamation lawsuit against you. And, while you may be able to prove what actually occurred, defending a defamation lawsuit can be quit expensive. So, think carefully about whether or not you want to open this pandora's box.
I do understand your annoyance -- but, I don't want to see you get into trouble. If you really believe that this is worth suing over, then I suggest you contact a civil litigation attorney, and let him/her write the letter on your behalf.
For a referral, see this link.
Hope this helps.
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