Conflicting rights.
There are no "conflicting rights" here. The employer has the right to hire and fire anyone he/she wants.
Which ones?
I first heard about this dichotomy a 6 months ago or so and my initial reaction was the same. That it hinted at facism.
But then, I stepped back and re-assessed. It seems to me that certainly people should be allowed to smoke where the want when they want as an 'individual liberty'. At the same time though, the rights of the property owner trump this individual liberty and I would say that the business owner is indeed the 'property owner'. He can make policy about what happens in his dwelling...individual liberty be damned. I sincerly feel that way.
I side with the employer on this one..