Earlier quoted context omitted.
I don't think the developer paid with his reputation. He actually gains reputation as someone who would stand up to injustice and unethical behavior. Of course unethical employers would hesitate to trust him but do you want to work for unethical employers?
He actually gains reputation as someone who would stand up to injustice and unethical behavior. I wish you were right, but you're not. For all the press about the "war for talent", there's never a good time to be a whistle-blower. Sometimes it is worth doing, because these kinds of stories are extremely common (read: there are a lot of bubble startups with shitty, unethical management) right now, but it's generally a…
In a competitive market (which sort of exists in tech), those companies that exhibit bad judgement fail. You're really doing yourself a favor by not getting hired by them.
Frankly, I think any company that would behave as you describe would probably do this same shit all over again.
I'm not sure if this guy is a decent hire or not (possibly not), but my decision to hire him wouldn't be based upon this episode, it would be based upon whatever I could figure out about his abilities.