The guy who saw this did not make a report because he was afraid of losing his temporary job. He did not make the report because he didn't want to get involved.
Yes, that's an assumption.
And it's a whole lot smarter of an assumption than claiming Paterno would have fired the entire janitorial staff because they contacted police regarding the behavior of someone who it appears Paterno had lost his fondness for.
Obviously he did since he neither encouraged the report to be made nor made a report himself.
Who made that assumption/claim?