It's not legal. I looked this up when I joined my company (in Berlin) last year. Even if you don't sign anything but the recruiter says/writes that you will be hired, this is already regarded as an "Absicht" (Intention) and they have to compensate you for some time.
Get a lawyer to sort this out. Will be worth it.
The contract almost certainly specifies that the choice of law will be German law. Either way, it seems the author is based in Prague currently, so I'm not sure how US law would figure into it.
Soundcloud is a German company. Also, if a American company is operating in Germany they follow German laws. That is why he would need a German lawyer.
