I've actually witnessed this happen several times:
My eighth grade teacher was horribly biased in how she conducted discipline, and made fun of students with accents or disabilities. She also taught a few ninth grade classes, where she would discuss her newly-wed sex life openly with the students (at a Christian school, mind you. Not to mention the fact that these were fourteen-year-olds). The entire class (plus several parents, mine included) complained. She saw through until the end of the year because (presumably) they didn't have anyone to take her place, but she was asked not to return.
My first geography teacher in high school was fired after the first quarter. He would constantly insult his wife to the students, would test on advanced material that we did not cover, and would describe his suicide attempts in detail.
My chemistry teacher in high school was always overweight by a good bit. She came back from one summer break much slimmer and a bit more...high strung. Not too long after, she was arrested for cooking meth, and subsequently fired.
Once I got to college and was taking a statistics class, I had an awesome professor. He used a lot of profanity, but that's normal and I was used to it. Halfway through the semester he read a statement to the class (and visiting representatives from his department) that detailed his apology for using profanity and offensive language. I assumed that a very sheltered student had gotten offended and complained, but one of my friends was in another class that the same professor taught. She told me that he humiliated a girl in front of the entire class, calling her a slut because she showed up to class in a wrinkly frat t-shirt and looked like a hot mess. He asked if she like frat boys, shacking up at the frat house, etc. Excellent teacher, but it's a shame he was such a shit person.