No, signing the draconian contract was a condition of receiving the severance, so (as explained by our attorney) by not signing she was not bound by that contract. It didn't amount to much money wise, not even a whole paycheck, and we were fortunate enough to be able to pass it up.

the natural state of things is anyone can sue anyone. So unless she got them to sign a contract to not sue, they can sue her.

Sure. They could sue but they cannot sue for a slam dunk "breach of contract" suit. They would actually have to prove damages which makes any case much more expensive for the company.

Yes of course, but not with a previously agreed cause of action.