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Seems a bit harsh to fire someone for that. People make mistakes. If anything, you know that this person isn't going to make the same mistake ever again.

Of course, if they do, then firing might be the way to go. First time mistake, second time incompetence.

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Perhaps something like this should be in a policy handbook?

"Employees may not use passwords that are used with any service outside of the company."

Zero enforceability (but some companies would probably ask for a list of outside passwords I'm sure), but in the face of a direct policy violation, 100% fireable, and can help a company in terms of liability.

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