Business English discussion question

This question was posted on a message board I like for football fans so it is authentic in the sense that it was asked by an American to other Americans he felt some kind of bond with:

Let me preface this by saying this is not me. One of the younger folks today got fired due to their response to a Manager at the firm for which we provide their commercial advertising campaign work. Supposedly, one of the managers there made a remark to him that he did not care for and rather than report it back to me or another leader of our team, they directly answered the client back by stating that they will never be spoken to that way again and there was a curse word or two used. The client complained to our project leader about it and the employee was confronted. It is company policy to be professional at all times and if something is said or done that is not appreciated, to report it to management and it will be taken care of, which normally it is. Basically, the employee stated that thery didn't trust that we would do anything and thus, they took action on their own. They were terminated immediately for insubordination.

Keep this in mind, from what I found out, what the client said was not harassing or illegal in nature, but it certainly was not nice, unprofessioanl and uncalled for. That being said, this firm does pay us a lot of money for our services and they are demanding. In the economy today, you definitely don't want to lose clients and thus, I figured our company was simply covering their asses as other bidders have inquired about the client. This person was a hard worker and produced good work and effort. So, I was not pleased that they were fired. I figured a warning or whatever would have been enough. Do you think my company went overboard? I know in the end, it's about protecting the company's pocket, but I'm not sure I like how our firm handled this one. And no, we're doing okay and were lucky to not have layoffs.