No, it doesn't sound fair, but unfortunately they can do it. Are they upfront about this policy when they hire people? If they aren't that is definitely shady. A lot of things about corporate America aren't really fair, but companies can make their policies as strict as they like. I saw my company let a good loyal employee go so the publisher could give his daughter her job. That too was unfair.

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Those who dream by day are cognizant of many things which escape those who dream only by night. - Edgar Allan Poe

It was precisely employee abuses like this, during the Industrial Revolution and later, that spawned and supported the union movement. Evidently we have to learn the lesson again. Perhaps this time in a way that doesn't pit the corruption of employers versus the corruption of union leaders, with the employees (as usual) the losers.

However, employers do need to have some rights. Not all empoyees do the right thing, as not all employers do the right thing. Sound like a need for reform somehow.