It's a private company. There is nothing wrong with this.
There is lots wrong with this.
It's none of that company's business what an employee does in their off hours.
This is America not the Union of Soviet Socialist Republics.
I pray they get their asses sued off and stop this crap.
Exactly. That's why private employers and their employees can freely set the conditions of their relationship. One of these conditions can be rules against smoking, even in an employee's private time.