Fairly common in my experience....................................

You can, but I don't think you have any damages to sue for..........

You will have to reapply for a PD......................................

This is not grounds for a lawsuit.......................................

They can use monopoly money if it works............

A lawsuit will cost thousands and take years. Perhaps go in person.

It will cost more than$128 to sue them..........................

The "how" to sue someone is to retain a lawyer willing to take your case.

While your employer can fire you for any or no reason, you may have grounds to sue your co-worker. Retain counsel before you sign anything.

Obviously her version of events is different from yours. Hire a lawyer and the court will sort it out.