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Even disregarding how much goodwill the company had burned at that point. Your solution implies that they would've set up a backup method once the employee left.

For most company the exit interview is done to tick a box. The feedback given will not be listened to at all. I can absolutely understand why he didn't feel like it was his job to setup and entire source control system on his way out the door.

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Points taken. However, at a minimum, it is a reasonable professional courtesy to disclose the significance of the backup issue upon exit.

The company did not mistreat the employee, just that it undervalued the employee.

I think the question boils down to do you believe the employee is obligated to disclose the backup issue within the responsibility of the employment contract? I would say no, since the entire creation of the software was not within the responsibility of the contract, why would the documentation of the backup issue be within it?

I think the situation is analogous to the company giving the employee a big unwarranted pay raise, and then the employee lazily not doing more work, then the company firing the employee, but then arguing that at a minimum, the company has a reasonable professional courtesy to give the employee hours for their vacation days, even though it isn't specified within the contract.

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