Not trying to split hairs...but are the prohibitions specifically on your wife for trading a derivative? Or does it include their spouse? What about her parent, or your parent? A child? Also, could the prohibition perhaps not apply to an IRA? (probably does include IRAs, but perhaps there's a clause that only applies to taxable accounts? Worth a look given the $ we're talking about).
As someone else suggested, if DW's stock is a major component of a sector ETF, you could also short (or buy puts on) the ETF, and buy calls of the other major components of the ETF....so you would be short the ETF, but long all of the major stocks in the index except for DW's company...effectively, making you short DW's company "indirectly". Might not be the cheapest way, but if you're talking about several hundred thousand $, and you think there's a chance it might crater, it could be worth a few hundreds in commissions and a thousand in volatility of the options....and these days, the options are basically just priced on volatility, given the imputed, non-existent 'risk-free rate' (hell, it's probably negative!).
But then this brings up an interesting point - if you trade the ETF, isn't that a "derivative", since part of that index includes DW's company? What about an S&P 500 fund? DW's company might only be 0.09% of the S&P, but technically, it's a derivative. What is the exact language used in the HR handbook on what constitutes a "derivative"? Same goes for a mutual fund that holds DW's stock.
If you can get away with trading a derivative that doesn't constitute more than, say, 50% of DW's stock, could you talk a broker into creating a synthetic or in-house derivative that is, say, 33% based on DW's stock? (the other 67% could be simply T-bills or some other fairly netural investment, or even an index or something else) Don't know the costs associated with this...but, again, if you think there's a good chance DW's $300,000 (or whatever) gain could go to zero based on the company's near-term success, I'd pay 5%-10% to 'guarantee' a $300k gain.