I too have heard this rumour, though i heard the word Strike involved, instead of walked out.
I wouldnt consider this to have been a strike or a walk out. If the group of pilots were told they had been "stood down - effective immediately" that would indicate that the pilots had no option but to leave the building at the time. It would have been as simple as that.
This would also assume that the employer was a reasonable, rational human being
Most people could assure you, that he is not. And as a result of that impulsive, irrational behaviour, that school has lost many irreplaceable experienced instructors, a brilliant CGI and the most well respected CFI, many of them fired or resigned in the past year.
What a shame