If there are existing pages related to the company you could try promoting them so they raise up above the offending sites. This will save you having to create new content and maintain and
SEO multiple new sites. I owuld of thought that given time the ex employee will lose interest and move onto other things. Certainly make it clear to your client that there are no guarentees that it will work.
Have they tried contacting the ex employee to see if they can come to an agreement? This could be a low cost solution to the problem, maybe cheaper than spending a fortune on
SEO.