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“… He says I would be a fool not to go for it, as many of my former colleagues are doing. I could sure use the extra money, but I’m uneasy about this.
[reply]Your uneasiness is both understandable and ethical.”

Common mistaking this uneasiness for ethical thinking. Likely his unease is knowing that this is not free money, but that there still is a hidden cost; he is a 50 year old and will need another job. And while it might be discriminatory to not hire him on the basis having had a prior legal spat with his last employer, if he is in any sort of profession where contacts are important, word will get around and he will be a pariah. And what’s worse, the amount contemplated acknowledges that this is nothing more than a shakedown, and has petty hustler written all over it. The fact that he is merely ‘uneasy’ with this speaks volumes about his real set of personal values, namely that he has few scruples, and that the $10,000 merely has not hit his price.
That the lawyer proposed a shyster deal is unsurprising.
That this guy has thought about it long enough to write a letter and still cannot see that he would be just as much the shyster, says that he has no ethics either.