Many users had requested this feature (bug) and it is now available for all to use.
Now Empathy supports blocking/unblocking contacts on per-user basis for connections that support contact blocking (for ex. gmail) and report abuse for connections that support this feature (though currently there are no connection managers implementing this). Danielle completed two branches for "Contact Blocking" and "Report abuse" last month and I recently re-based them to master for her which took some time since the branches had diverged much.
Here a few snapshots of the interfaces introduced-
The Blocked Contacts can be viewed and managed with Edit->Blocked Contacts menu-item
in the main window to open up the following dialog
Blocked Contacts Dialog
...on which you can perform usual live search.
One can right click individual contacts in contacts' roster and on selecting "Remove" he'll
notice this extra "Delete and Block" button, if supported.
The Contacts->Block Contact menu item in chat windows is a check menu-item that can be toggled
The subscription box provides a convenient way to right away block a contact without need to first add him or her.
Confirmation dialog that would pop up on each attempt of blocking a contact
On completion, Empathy was in string freeze while getting ready for release, and the ready-to-merge branch was too cool not to be available in this release, so Guillaume requested a freeze exception from the i10n team which was granted and the branch was finally merged! :)