Since the current org does not know the details of the case, it is best for them to not meddle in the threat of legal action or take any disciplinary action against the employee.
However, they should have a chat with the employee and talk about what XYZ is saying. If there is a genuine reason and the employee needs support, they can actually pitch in and help.
But if the employee seems to be doing shady stuff, perhaps it may be time for a harsher conversation.