He may not be doing something "wrong" but something that is in contravention of board policy.
I'm on a job now that requires "cracking" - well it's now cracked .....it was explicitly stated in the contract that n software protection was to be applied but also that the software remained the intellectual property of the programmer.
Notwithstanding that my dog could have coded better - the processor was protected.
The flaw in the plan was that was a 300 series processor on site which took 5 minutes to open. Programmers are creatures of habit (whilst this guy was never a programmer even on one of his best days - he was however a creature). Yap the password was the same.
Did a break any moral or property laws? No.
But the process may not be discussed here - any of story