That wasn't really the case here. The IT shop apparently had a crew of a dozen or so people. They all had admin rights on the Google domain plus some root admin account. When they fired Williams, (according to the court docs), the laptop was sent back with the root account set to auto-login. Apparently the company they had outsourced the IT to either wiped the machine or did something to it where the root account got locked out or the password changed. The only other account that had admin access was William's personal google account (which was supposed to be removed from admin rights).
He didn't want to work with them anymore to help them recover their admin account, which they screwed up. They ended up suing him. He ended up losing because he didn't show up to all the court dates, because he couldn't travel to Indiana because he was not able to take his kid with him to Indiana (because of a ruling from family court).
If he would have shown up to court, he actually would have won. It was the school's responsibility to secure their property before firing him (including logins, etc.) They didn't, and they can't expect him to even answer his phone after they separated. He was actually in the right, by law, to ask for compensation for working with them, as a new contract work for hire. This is pretty standard case law, and the LRB has postings about it all the time. Now, he could have been in the wrong if there was a policy about not associating the domain admin account with your personal account, but that clearly wasn't the case since it was well known that it was done and they didn't bat an eyelash about it.