Privacy in the Workplace?

A co-worker and I were having a conversation during a slow day at work. The talk came to the subject of our supervisor and the co-worker stated that the supervisor could be a snake or snake in the grass. While we were talking the phone rings and it's our supervisor, who is home on a day off. The supervisor informed my co-worker that he knows she is talking about him and what she is saying is told to her word for word. Well, the person in the next office was texting him and telling him what she was saying.

Do you think it was right?

First, for the co-worker to be texting our conversation.

Second, for the supervisor to call and confront the co-worker, his employee.