At first we said that he simply loses his item, and sticks around until you're respawned...but then my friend changed his mind and thought that, given we were in a real dungeon/monster/treasure situation, he'd simply whistle over the hireling, who would be lost and afraid without a hero escorting him around. Listening to him, it almost seemed as if he had the hirelings best interest in mind while crafting his argument....hmmmmm.
I gave him points for originality, but told him I'd have to consult with the community here first.