I can understand your frustration but I don't think it’s a fight worth fighting. A similar situation happened to me in that I was laid off (after 5 years) and the boss' daughter was hired.
I did speak to legal counsel as my severance was very light. We did discuss all the information surrounding how/why I was terminated and while she agreed it wasn't ideal - there was literally no recourse.
If you don’t want your job back or additional compensation I would just walk away. My understanding is as long as they change job title they are following the ‘rules’. Sorry this happened – it’s a pretty sh*tty feeling overall.
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