When the company tells you when you can eat, sleep, have sex, etc., then maybe you too might think there is something wrong in trying to control people on their off time.
A company may do that with employees and to a lesser extent customers. The employee isn't forced into how to act on or off the job. They chose to work for the company according to the agreement between them and the company.
Sure the company has a right to set rules and procedures to follow, but when they start peaking in your house and watching everything you do or don't do -- you'll be the first to complain. When certain rights are eroded every day, eventually you too won't be free.
The company isn't invading the privacy of the employee while the employee is on their free time. If they do the employee can take it to court.
An agreement between a company and employee may include a provision where the employer is allowed access to the employee's home. I don't know of any existing company-employee agreement like that but it's possible for both parties to structure such an agreement.
Today it's smoking, tomorrow it will be something else.
Perhaps a company decides to employee according to age, gender, religion or qualification. It's their business. They can hire and fire people as they chose.
You too have the same right. Perhaps you decide who to let into your home according to age, gender, religion or qualification. Perhaps you chose to not associate with people outside your home according to their age, gender, religion or qualification -- your choice whom you chose not to associate with.
You want that obvious liberty to act according to what you decide is best for you, right? You may not like it but other people and businesses have that same right you have..
Why wouldn't you like other people or business to have that same free-association right that you have?
My guess is: sacrifice free-association rights for the greater good of the group. A collectivist fallacy foisted on people Status quo, political agenda imposed by government-controlled public-school indoctrination and facilitated by mainstream media.