Okay, it is perhaps a bit dumb to publicly insult your place of work, but really, unless Waterstone’s have a case for defamation, surely they don’t have a leg to stand on apart from the fact that the Joe probably doesn’t have a lot of money to spend on legal help. He was blogging in his own time, on his own machine and it was hosted on his own site. It was also clearly satirical, which in my limited understanding of libel is one of the key factors in not getting sued. Saying Bill Gates is demented warthog clearly isn’t true (thus satire), saying he’s a child molester could be taken as such as would constitute the marring of his good (ahem) name, etc. For the record, that’s not what I’m saying about Bill of course.
Of course thousands of bloggers are indignant about the whole thing and many of them will probably spam Waterstone’s. It’s only part of the point though - Joe’s unlikely to take his job back even if they were forced to offer it to him. But it does show an incredible ignorance of blog and online culture as well as real heavy-handedness in terms of corporate behaviour. It’ll damage their reputation a bit too, especially if the mainstream media get hold of it and it goes round the blogs all over again.
What they should have done is made him the Waterstone’s blogger - they would have officially ‘owned’ him and would have looked smart in the process. Not only that, he probably wouldn’t have time to write his own.