Terminating an employee while the employee is on short term disability is not presumptively improper. STD only affords benefits; it does NOT afford job protection.
There are a number of laws that may be applicable that could afford protection, however. The FMLA is the principal one. Typically, it affords protection for a period of twelve weeks. If you return to work before having exhausted twelve weeks leave, you are entitled to be returned to the same or an equivalent position as the position you held previously. Generally, if you attempt to return to work after that twelve-week period has been exhausted, you may find that your statutory reinstatement right under the FMLA has been forfeited.
There are a couple of exceptions to the general rule;
"The Interference Exception": If an employer fails to give you the notices it is required to give you under the FMLA, you might - just MIGHT - have a claim that the employer "interfered" with your ability to exercise your reinstatement right. In that event, you might still be able to seek reinstatement. Your husband should consult an employment attorney to see whether the has legitimate grounds for invoking this exception.
"Contractual Leave": An employee may also have the right to a certain amount of leave as a matter of contract (e.g., under a collective bargaining agreement, under an individual written contract with his employer or, in certain states, under an employer policy or employment manual). if the employer failed to elect to have that leave run concurrently with FMLA leave, you might be able to claim the right to have the two periods of leave (paid, contractual leave) and unpaid FMLA leave (12 weeks) run consecutively or sequentially. In that event, you might still be able to claim the right to reinstatement.
"Americans With Disabilities Act" and "State anti-discrimination law": If your husband is able to return to work WITH a reasonable accommodation, the employer might - again, MIGHT - be required to accommodate him. He should really meet with an employment attorney in your state to ascertain whether he still has any reinstatement rights, and he should do so without delay.
In addition to considering all of the above, an attorney in your state will be able to tell you whether there is a state-law version of the FMLA in effect in your state that might afford your husband greater rights than are available under the federal Act. Good luck.
Disclaimer: This answer does not establish an attorney-client relationship or constitute legal advice. It is for general informational purposes only.