On whether it's morally permissible for a boss to fire an employee for performing a morally impermissible action when off-hours

I'm the grader for Felica Nimue Ackerman's introductory undergraduate course on Skepticism and Knowledge. I attend the course regularly, and rather enjoy it. Today we began a unit on knowledge of ethical principles, and we spend a good portion of the class on a lively debate about an ethical question. The point was to demonstrate that our debate was not merely about a difference in language -- we demonstrated that ethical claims are substantive ones. So of course, the specifics of the example were not important at all. That's why my discussion of it is here, not in class this afternoon. My moral intuitions seemed very much at odds with those of most of the class. I'd like to know whether my readers are inclined to agree with me about this case. (I've devoted considerable space in this blog to defense of the particular ethical theory I believe to be true. As much as is possible, I'd like to set that aside here; I'm wondering about a pre-theoretic moral intuition.) Here is (more or less, thanks to incomplete memory) the story we were told in class: Devon is Allan's employer. Allan's position in the company is one in which he rarely interacts with other people, and never interacts with customers. Devon witnesses the following, some evening or weekend at which neither is at work: Allan parks his car in a handicapped space, even though he isn't handicapped. An elderly woman in a wheelchair confronts him about this, and Allan yells very rude things to the woman and refuses to move his car. Devon approaches Allan, and tells him, "I don't want mean people at my company. You're fired." The question: was the firing of Allan moral/permissible/admirable/justified/etc. or not? Students took both sides of the argument. Some said things like "Devon was right to fire Allan, because its a legitimate company interest to have moral employees." Others were more inclined to argue things like "what Allan does in his off-hours time is none of Devon's business, so long as it doesn't affect the company." The two factions eventually seemed to identify the crucial tension as being between (1) the plausibility that an employee's off-hours moral life will affect the company, and (2) the employee's right to privacy when off-hours. I don't believe that this is the key question at all. No one (including me) offered anything close to approximating my position in class, so I'll suggest it here and you can all tell me whether it sounds plausible. I believe that Devon could be morally justified in firing Allan for being a mean person, and here's why: I think that all of us have moral reason to discourage immoral behavior in others. If I witness someone doing something wrong, unless I have a stronger reason not to, I should confront him about it. And the way that I ought to confront him depends on my relationship with him. For example, if it is a close friend, it might be best if I engage the issue very directly. "I see that you're Xing. Xing is morally wrong... why are you doing X?" In the case of a friend, I might even attempt to prevent him from continuing to X, even against his will. This would be less appropriate for a stranger, especially if X is only moderately wrong. (Even if eating meat is morally wrong, it's probably not morally permissible for me to grab hamburgers out of the hands of random restaurant patrons.) If I'm observing immoral behavior in my child, it's not only permissible, but probably obligatory to forbid such actions, and to punish the child, maybe by sending him to his room. Being someone's boss provides another possible way to respond to immoral actions. The point I'm trying to make is that the moral status of the firing of Allan does not depend on whether that firing will benefit the company -- "the firing of Allan" uses the passive voice to disguise the fact that it's an action by a moral agent -- Devon. We evaluate Devon's action. We wouldn't say that Devon is doing something wrong by considering something other than the good of the company if Devon merely chastised Allan and did not fire him. What's so special about firing that requires that it only be done for the good of a company? (A very, very important point I should make clear: I'm arguing that Devon might be permitted to fire Allan for acting immorally. I do not mean that Devon ought to go around firing homosexuals if he believes homosexuality to be morally wrong. It would be very arrogant for him to take such a drastic step based on such a controversial moral claim. I do not believe that "it is morally wrong for non-handicapped people to park in handicapped spaces, then yell rude things at elderly women" is a controversial moral claim.) Summary: two points. (1) (The weaker claim that I'm more sure about and find more important) The question does not depend solely, or even principally, on whether the firing would be good for the company. (2) (The stronger claim that I'm less sure about and find less important) It might be moral for a boss to fire an employee for acting (obviously) immorally. Am I crazy?