I won't give them that much credit. My guess is they didn't lay her off so as to avoid having their EDD policy premium increased. They figured they could just reduce her hours until she voluntarily left.
That happened to a neighbor of ours (salesman). He was even bringing in new clients, but they were “shifted” over to another guy that had been with the company for years and years. It’s pretty tough when management has you in the cross hairs for whatever reason.
One of my old man’s words of advice was to never sue someone. I don’t think that is ALWAYS the case, but his point was if you sue your employer, who will want to hire you next? If you sue your supplier, who will want to be your next supplier, etc.