I'm not trying to take sides here, but to be fair, there are also other Americans at CX with military obligations and arrangements. I doubt though, that they give 1 single day notice to CX, when they are called for duty. I could be wrong, but I doubt it.
As with everything in life, there is a way and there is (another) way. The way these things are handled matters a great deal. It is not entirely unimaginable that undesired trips on the roster could be opportunistically "adjusted" citing the protections afforded under USERRA. That of course would be wrong. Again - I'm just trying to be objective. The fact, that JO has used the CX ID and uniform in Hawaii, long after leaving CX, does not increase his credibility as a person.
On the other hand, if someone makes it all the way to become an F/A-18 pilot with documented missions in Iraq, they have proven themselves many times over as an aviator and clearly know how to fly a jet. Certainly more than good enough to "fly rubber dog.... out of Hong Kong".
The failed line check does look rather suspicious. Clearly, there might be two sides to the story, but discrediting one's professional achievements as a disciplinary measure - by "failing" a line check, etc. has been a vile habit CX has used in the past. So wrong on many levels.
If it turns out, that this was the case with JO, then it may prove to be very expensive for CX indeed. In this business, it is one thing to have made mistakes as an employee and a whole another to have made mistakes as a pilot.
If someone is a bad employee, the company has every right to let them go, but then let them unmistakably know, that that is the reason for them being let go. This gives them a chance to learn from mistakes and begin afresh elsewhere.
However, discrediting them professionally would be dirty, unfair, unethical and unnecessary.
Not sure much will come out of this law suit in the end.