Earlier quoted context omitted.
> I'd say you did the right thing in not saying what the startup was — it isn't wise to look like a bridge-burner when you're looking for work. Today I learned that its considered "bridge burning" to communicate a company's terrible ethics in public.
Of course it is. Are you perfect, 100% without any flaws? How certain then are you that the employee you hire isn't going to start airing your dirty laundry at the earliest convenience?
Not at all. If I hire someone, I'm making a commitment. If I made a mistake, its out of my pocket to make them whole.
Disclaimer: I have made mistakes hiring people, and have paid them for their troubles, even going so far as to be a reference for the other opportunities they had available and telling them it was our mistake.