We all have a right to our good name, and one is permitted to take whatever legal recourses are available to preserve or restore one's good name, especially in this case where it impacts the man's livelihood.
I would probably ease up on the amount of punitive damages sought, i.e., not go for a million dollar lawsuit. To me, the vindication of the legal judgment should suffice to offset the damage at work. But, if someone lost his job as a result of slander / detraction, then the financial damages might be in order.