Since I'm dating a labor lawyer, let me pass along a bit of germane info: Political affiliation is NOT a protected class against discrimination under the law. (Protected classes would include things like being discriminated against because of your race or a disability.) We had a thread some time ago about some guy in the Midwest who was firing smokers, and the answer was exactly the same in that case as well -- it's legal for him to do that since smokers are not a protected class. If you're an at-will employee, your employer is free to fire you at any time.
Obviously, there are other factors operating against that kind of arbitrary policy. For one, if you limit your talent pool to people who only meet criteria X or Y, then you are potentially putting yourself at a competitive disadvantage against other companies who would hire talented people who don't fit your mold. Second, although this might be acceptable in a court, it may utterly fail in the court of public opinion, which can have economic impacts.
If you want to argue that employers should have no right to fire someone based on their personal life and beliefs (as long as it doesn't affect the performance of their job), I'd be inclined to agree with you. Wal-Mart in particular has some AWFUL personnel policies, and I'd love to see them get taken to court. With that being said, I think it would be a VERY hard thing to codify into law...at least, to codify in a way that makes sense.
EDIT: Too late, this thread spiraled into hell while I was typing. Dammit.
