I worked for this guy small business (>3 employees including the owner/boss) for 3 years. Really liked the job and the boss up until about the last 6-9 months. He began weekly accusing me of doing side work and even called our supply houses (I do HVAC) and asking them if I have made any purchases. They told him no, which is exactly the truth.
Long story short the week after Christmas he lays off myself and the only other employee in his company stating not enough work due to a poor season. He takes my work van, the keys, the gas card, and my work cell phone even though he claims it is only a temporary layoff. He promises to keep up my insurance as I have a family and he also promises to pay me my vacation time so I wouldn't be completely broke trying to support my family. Well, I am not one to sit around and collect off the government, so I went that day trying to find a new job. He caught wind of this (supposedly) and decided not to pay me the 13 day of vacation he owes me ($2000 plus loss) and we find out a few weeks later that he has retroactively gotten rid of our health insurance (back to December 31st) , even though he took out my premium out of the last check I received (the first week of January).
We contacted the bureau of labor who told us there is nothing we can do since insurance is a benefit and we don't have a written agreement for us to get his vacation after termination of any kind.
As if that isn't bad enough the other guy that got laid off talked to one of our ex boss's new employees. Acted like he worked for him a while back to get the scoop. Come to find out the "boss" has told him that the last two guys were fired from stealing from the company. Also find out they have plenty of work to keep them busy. (layoff for season?)
What do I do? Can I take him to small claims court. Should I invest the money in an attorney? Do I have a case?

Thanks to all in advance, this has been the most frustrating thing to happen to me and my family and every time I decide to chalk it up to experience and let it go, I find out another infuriating element of the story.

As awful as this is, I would count my blessings that I have a new job and close the door on the previous employer. You know that you did not steal, did not moonlight (and so what if you did - was there a contract with the employer stating you could not do HVAC work on your own time, as long as you were working with one of his clients?), and did the best job you could do.

This is infuriating. I see every one of your points! But what are you to gain here? What can you lose? Sooner or later your previous employer is going to pull the same stunt he did with you and your co-worker. Once a cad, generally always a cad.

HVAC is a wide open field of opportunity. My oldest son just graduated with his certification and had his job before graduation. I truly wish you the very best. Learn to get past the anger - chalk it up to a work experience of a lifetime. Some employers are just like that. Word gets around. Take care.

First, if you aren't working, file for unemployment. Also, if your company was providing your insurance they have a limited period to advise you of how to continue that insurance at your own expense under COBRA, but being a small business they may be exempt.