You're correct....but it happened in Canada.
I'm looking for the U.S. case that you mentioned, but here is some (very) distant precedent.
I think these Weyco employees just might have a case.
From http://www.emond-harnden.com/jul00/comincosn.html
Nicotine addiction is a disability, British Columbia arbitrator rules
Employers wishing to ban employee smoking may now have to consider whether tough anti-smoking rules discriminate against heavy smokers, and if so, what forms of accommodation will be required. This may be the fallout from a ruling by a British Columbia arbitrator in Cominco Ltd. V. U.S.W.A. Local 9705 (February 29, 2000).
At issue in the case was the union's grievance against the company's policy prohibiting the use or possession of tobacco in any form on the company's property, indoors and outdoors, including parking lots and private vehicles, and in company vehicles on or off company property. The property at issue was a lead and zinc smelting complex occupying some 450 acres.
The union conceded that smoking was a hazardous activity, but objected to the policy on two grounds. First, it argued that smoking was a personal right of employees, and by seeking to regulate it to such an extent, the company was in effect attempting to dictate the personal habits of its employees.
Second, the union contended that nicotine addiction and the effects of nicotine withdrawal were disabilities under human rights legislation and that the policy discriminated against addicted workers, who faced the ultimate sanction of discharge for non-compliance. Accordingly, the union argued, the company was obliged to accommodate addicted smokers by permitting them to smoke outdoors in areas where exhaled smoke would not have an impact on other employees.
The company asserted that there were good business reasons to justify the policy and, in any event, employees had no personal right to smoke. There was, therefore, no legal basis to compel the company to permit smoking on its property.
NICOTINE ADDICTION A DISABILITY IN LAW
A key issue to resolve was the ability of addicted smokers to, in the arbitrator's words, "leave [their] addiction at the plant gate". Many of the workers involved worked 12-hour shifts, which heightened concern over the ability of the heaviest smokers to complete a shift without cigarettes. Despite the fact that each side produced expert witnesses to back its view, the arbitrator found there was a consensus that heavily addicted smokers would likely be unable to cope, and that even less heavily addicted smokers could be expected to experience severe withdrawal symptoms sufficient to impair their productivity.
The arbitrator rejected the union's first ground of objection to the policy, and held both that the company had a legitimate business interest in banning smoking on its premises and that employees had no right to require the company to permit them to smoke while at work. However, this left open the question of those heavily addicted smokers who would be adversely affected by the ban. The arbitrator therefore turned to the question of whether the ban was discriminatory under human rights law.
This question in turn hinged on whether or not nicotine addiction constituted a "disability" under that same law. The employer argued it was not, as it is a temporary condition that can be voluntarily overcome and does not interfere with a person's effective physical or psychological functioning.
The arbitrator disagreed. He rejected the notion that disability should be determined by reference to whether the condition is temporary or permanent, holding that the relevant issue was the degree to which normal function is impaired. He pointed out that drug addiction and alcoholism, both of which are viewed as disabilities in human rights law, are "no less ephemeral than an addiction to tobacco".
As for the addicted person's ability to function, the arbitrator conceded that, compared to those suffering drug and alcohol addiction, addicted smokers were able to function reasonably well. However, smokers suffered long-term health effects resulting in illness and absenteeism. Further, when one considers the effects of withdrawal on an addicted person, the "distinction between nicotine addiction and other forms of addiction becomes almost non-existent". Therefore, the arbitrator held,
"[I]n its chronic stages where persons experience severe symptoms of withdrawal or they actually contract disease or illness or otherwise suffer significant impairment of function, [nicotine-addicted persons] fall precisely within the class of persons entitled to protection, which is to say, persons who suffer from a physical or mental disability."
ACCOMODATION
While the smoking ban was enforced through a range of disciplinary measures that were of concern to the arbitrator, it was also true that the company had provided an addiction management program, nicotine replacement therapy and, where necessary, ongoing counselling. The union disputed that these measures discharged the company's duty to accommodate and suggested that the only suitable accommodation was to permit smoking in an outside area.
The arbitrator did not decide this issue, but instead referred the matter to the parties for further discussion as to how addicted smokers were to be accommodated, and reserved jurisdiction to decide the issue in the event the parties could not agree.