I would like to see this case from three different standpoints.
Professionalism:
Each of us have at least two different personalities (or profiles) ??? one personal profile used for contact with family, friends, and people related to us with whom we share ideas not related to work, and one professional, used in our work relations: clients, suppliers, work partners. Colleagues at work in many cases may fall in first category. But we must be able to clearly separate the two categories and do not mix up messages between them, e.g. by creating different accounts in Twitter or any other social networking tool and properly identifying them in order that a client and friend can distinguish who, the professional you or the personal you sent him a message. We can, for example, have a profile related to contacts with our church relations. Did Noah separate his profiles?
From the same standpoint a company should have in place a policy or a code of conduct ruling among other subjects, on internet use by its workers, and enforce the application of this policy. A good company, where we would like to work, will be taking care of teaching, in some way, its employees, in particular the novice ones on how to be a good professional and be able to take care of his multiple profiles. Was it the case with Phonedog? Why not learn from this case to be a better company?
Ethics
We are in the era of the videogame. Many kids think that the limits of what they may do is what they can do. The magic word ETHICS make little or no sense for them and the parents do not try to teach them the meaning of this magic word. Why did Noah have to use his old company name as part of his identification tag? What good makes to Noah the use of the ancient company name? Surely is bad (or at least not good) for Phonedog have their name related to an old employee.
Social
Is it worth to the entire society spend the hardly earned tax money in such a silly court case?
My opinion is that Phonedog has already lost some of its credibility in the market (more than money) and chances are that it can lose some more by pursuit in this case ??? customers,and share holders can see it is a company that is not able to enforce a reasonable internet use policy.
Noah has already lost a lot as chances of a good next employment are shrinking. Withdraw with elegance from this case , and perhaps he has a chance to make his image a little better.