I can understand this is a frustrating situation for you and your co-workers. It is not illegal for an employer to change its policies regarding eligibility for particular type of employment based on job related qualifications (or disqualifications) such as may be required by an insurance company, etc. For transportation companies, for example, qualifications/disqualifications based on driving record are common.
As far as your post mentioning that the co-worker was "persuaded" to find work elsewhere, I'm not sure of your question. Are you wondering if the "persuasion" part is legal? Most employees are considered at-will employees, which means they can be terminated at any time, for any reason not prohibited by law (for example, it is illegal to fire someone on the basis of race, gender, religious discrimination, whistleblowing, etc.). The usualy exception to the at-will rule is when an employee has a contract for employment requiring termination only for "just cause" or something along those lines. Usually, "just cause" would be something like misconduct, conviction of a crime, or failure to meet eligibility requirements for the position.
Of course, if you or your co-worker believe that you may have been treated illegally or unfairly by the employer, you can certainly try to speak to an attorney regarding what legal options may be available. You can find more information about an attorney through the locator service on LawInfo's home page at:
http://www.lawinfo.com/.