Of course they should have the right to hire and fire whomever they choose. That still doesn't mean this isn't ridiculous.
There is a better case to be made to forbid employees from engaging in a whole range of dangerous activities that might result in injury. Skiing & snowboarding, in-line skating, white water kayaking, rock climbing... riding a motorcycle.
Thinking back on the various medical issues among my coworkers, it seems obvious that the most serious injuries and the most lost time from work all relate to either risky hobbies that people have or, the number one cause of lost work: children. I used to track sick days and payroll in a former life, and I can say authoritatively that the number one most expensive employee from a lost-time standpoint and a medical expense standpoint are those with young children.
I can't recall a single instance of somebody becoming expensive to employ because of anything even remotely associated with smoking. Smokers don't actually seem to get sick any more frequently than nonsmokers, but people, especially single moms with young kids... they're out all the time.
If this were really about costs, then they're reaching way way down the list of risks and completely ignoring other low hanging fruit that would in fact save more money. Its so obvious its like the proverbial gorilla in the room. This has nothing whatsoever to do with health costs or any "genuine" concern for the health of employees.
This is a small-minded little control freak that gets off on flexing his power. He's become bored with his power over people while they are being paid by him, and is reaching for some new thrills.
you cannot fire someone without cause. refusing to self-incriminate doesn't sound to me like cause.
this guy was on a fishing expidition to get rid of these guys. were any other people subject to this scrutiny or is he discriminating against a select few?
can he decide that riding a motorcycle or skydiving are dangerous hobbies and fire people who do this on their weekends off?