This is why I'm so grateful to work in SWE where skills and progress are somewhat objective. If such a situation occured with my boss I could just resign and have a new job in a couple weeks. Their loss. But in management you've spent years at the company building up to your current role, and you're just kinda stuck with people. Can't imagine how stressful it would be to be in that person's position.
Lawsuits follow you. Once employers do a background checks they will know about any lawsuit you are involved in any way. They are publicly available for anyone to find.