IANAL, but, my take on this is: Asking the password itself should be none of facebook's business. However, as soon as the employer logs in with the password, th

IANAL, but, my take on this is: Asking the password itself should be none of facebook's business. However, as soon as the employer logs in with the password, they become subject to the TOS as well. The TOS for example contain this clause: You will not use Facebook to do anything unlawful. I don't know if that is enough, but Facebook can also change their TOS. And the lawsuit would pretty good PR for Facebook and pretty bad PR for the employer regardless of the outcome.