There is no law that would stop a former employer from saying things about the conduct of a former employee... other than the threat of a defamation lawsuit. That means that a former employer can say anything that is true to a prospective employer.
As a practical matter, former employers don't usually say much simply because it risks a lawsuit. If an employer is in the midst of a lawsuit with the employee, that would make commenting on such things pretty reckless by the employer. But it would not be strictly illegal. It would just mean that if they end up losing the lawsuit, they are almost guaranteed to lose the forthcoming defamation lawsuit as well.
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