It may not have been overbooked, if the part about United giving their employees preference over paying customers is true. That's even worse than overbooking, IMO.
It'd be interesting to know if any of this is covered in the airlines' "customer agreement" boilerplate. Even if it is, it's still damaging and United knows it. This smear attempt may end up hurting United as much as the initial offense.
Airlines always overbook, because on any given flight there are a certain percentage of people who don't show up for whatever reason. But, it's a gamble each time to correctly predict what percentage won't show. If the airline chooses to gamble and make extra profits by overbooking, they should also gracefully accept their losses on the times when they lose the bet.
I've seen countless times when waiting to board and airlines start asking for volunteers. First they offer one ting, then if they don't get takers they just sweeten the pot... perhaps upping the offer to 2 or 3 free tickets in addition to passage on a later flight. A few times they've sweetened the deal so much that I've opted to take them up... but every time I did I was too slow and others beat me to the counter.
United really screwed the pooch on this one... surely they could have upped the offers to a point where they would have gotten 4 takers. The CEO then re-screwed the pooch by publicly defending what they did instead of issuing a profuse apology.
United's shareholders should hold that CEO accountable for causing so much damage to the brand with his idiotic handling of the situation.