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Do you plan to use them as a reference or put them on your resume for future job applications? Going the lawyer route and maybe milk them for more money might not be the wisest career decision. They might give you a crappy reference and try to get back at you. As you said, you worked by the book and didn't do anything wrong, you'll get good reference for your future job applications elsewhere. Leaving things on a good note is all that can be done. That's my thoughts.
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