How Would You Lead?

I can remember this situation that occurred between two teachers that I worked with. One day I came to work to find two teachers fighting, they were actually hitting each other with closed fists. It all started about two weeks earlier, on a Friday at an outdoor gathering that the school had sponsored. We were allowed to bring our family members but we understood that we were still at work. There was no dress code change verbally or written. One teacher was married and the other was not. They both were young, the married one was about 28 years old and the single one was 22 years old. We were outside at a park and it was hot. The teacher that was single decided to wear her school t-shirt with some little bitty shorts. These shorts were so short that when she bent down you could see more than what was appropriate for a workplace event. The Director just shook her head and started setting up the games. The single teacher kept asking men to help her with various tasks such as: carrying the grill and coals, setting out blankets and getting her supplies for the children. She seemed to always be engaged in conversation with the married teacher's husband. They spent a lot of time together laughing and talking. The married teacher did her work with her group as she was a Lead Teacher and the single teacher had more time to converse with people because she was not responsible for anyone except her morning class and by lunch time she had a lot of free time. She seemed to be paying a lot of attention to the other teacher's husband. On Monday when we came to work they were arguing about what had happen on Friday, a lot of harsh words were said and the Director came and said it was time for work and that was it. For the next two weeks their was a lot of tension and gossiping during break. The situation had the employees divided and giving their opinion. Then on that Friday morning the situation erupted into a brawl while children were being dropped off. Some parents that witnessed the incident decided not to leave their children for the day and called the parents of some of the other children to inform them of what had happen. Those parents that could make alternative childcare arrangements did so and came to pick up their children. The Director broke up the fight and separated the two teachers. Do you think that the Director handled the situation appropriately? Explain.