They aren't policing employees' eating habits or anyone else's. They've just decided not to spend company funds on meat.
There are valid social, political, and environmental reasons to avoid most or all meat. A company should be able to decide not to spend their money on something both ethical and socially beneficial that won't harm anyone else in the process.
> How will they even know what you ate?
Some restaurants have line items, but most likely this is a marketing tactic more than a rigid policy that will be easily or thoroughly enforced.
> Some cities simply don't cater to the vegan market on a large scale. Sometimes you don't have as much of a choice what restaurant you're going to.
Where did you get vegan? They seem to be allowing expensing of vegetarian food.
And when do people not get to choose where they eat? And when they do, why would it be a place that serves zero vegetarian options?
Also, they seem to be pursuing a pescetarian policy (no mammals or birds, but fish are OK).