> We're talking hundreds of static sites where he took the all the design docs and static HTML/CSS/JS files one would need to recreate them somewhere else.

You make it sound like he poached your clients or extorted your company. As they didn't go after him legally, I assume that didn't happen.

I assume all the files are on a thumb drive in his drawer, unopened, just in case he wants to remember how "that cool animation" was implemented. And when that moment comes, he will not find the thumb drive, anyway.

And all that security charade will accomplish is that people who care enough about their work, will make a copy the day before they quit. Congratulations, your policy achieved nothing, except get rid of their two weeks notice and everyone feel a bit worse working for you.