We will be paying a large legal settlement to an ex-employee via ACH. Do we need to get a W-9 and report it on a 1099?

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As with all payment reporting, it depends on the particulars—in this case, what the settlement is for and the relationship of payee to the company.  It is possible, since this is an ex-employee, that this is reportable on a W-2; but it might instead be reportable on a 1099-MISC. Or it might not be reportable at all.
 
See IRS Instructions for Form 1099-MISC, Other Income, pages 5-6 (the section on damages is item #5 on page 6) regarding settlement payments.  Then call the IRS information reporting customer service line in Martinsburg, WV at (866) 455-7438 (press “1” after the recording). Be prepared to provide all the details of the settlement. With a complete understanding of the situation, they will be able to tell you whether the settlement is reportable, and if so, on which form.

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