UK: Yup, this sounds absolutely planet zog. People do get themselves into trouble through facebook, twitter and blogging (see below), but employers don't ask for passwords, that is for sure.
Actually, he was offered his job back, but didn't take it up. It's unclear if the offer was before or after he won an appeal against Waterstone's dismissal (it is not unusual to get an offer for reinstatement but still run the employment tribunal process to win compensation for the dismissal). But in the meantime he'd gotten an offer from Forbidden Planet to run their blog, and apparently reached a settlement with Waterstone's instead.
As far as I can tell, he still runs the Forbidden Planets blog (as well as his own at http://www.woolamaloo.org.uk/ ).
http://www.bbc.co.uk/news/uk-15347868
http://www.guardian.co.uk/technology/2005/jan/12/books.newme...
(the chap was later re-employed)
http://www.bbc.co.uk/news/uk-19010842
I just tell students that social media are 'public speech' and that they have to think...
The US patents system seems pretty odd as well mind you.