I've never really understood the legalities surrounding a company or organisation of some kind being able to suspend or dismiss someone for something that isn't illegal. As an example, there are now states in America where you can legally purchase and smoke marijuana. Yet most, if not all, sports leagues drug test for marijuana and if caught you can be suspended from playing, thereby preventing you from earning a living even though you did nothing illegal.
Would the athlete win if he sued the league? Similarly, could Louis Smith sue UK Gymnastics given that he did nothing that was illegal?