Lawyer lawyer lawyer LAWYER lawyer <i>LAWYER</i>.<p>I think the consensus in the grown-up business world is &quot;fire immediately for cause.&quot;  I would bet substantial money that when you lawyer lawyer lawyer they will advise you to do that and document the heck out of it.  The calculus is really, really simple: if you don&#x27;t, then you will with probability approaching one get this incident or a similar incident cited during a threatened employment practices lawsuit, and your lawyers will sigh and say &quot;OK, settle for $250,000.  You can choose to fight it but the odds are not in your favor.&quot;<p>I get that you feel this may cause problems for your innocent employee.  If it helps you contextualize this, maybe think of it less in terms of &quot;Our departing employee has transgressed against our innocent employee, who let me into her confidence about that&quot; and more in terms of &quot;Our departing employee demonstrated judgement flagrantly incompatible with professional employment.&quot;<p>Would you be worried about this if he had been embezzling?  &quot;I&#x27;m just telling you on an FYI basis boss but I don&#x27;t want to cause social issues.&quot;  That&#x27;s not really how we deal with embezzlement, right.  You embezzle, you get fired.  Immediately.  The embezzlement is not a crime against the person who discovers the embezzlement.  They&#x27;re welcome to an opinion on what the best course of action is, but regardless of what that opinion is, the course of action will be a swift firing.<p>As to messaging to the rest of the company, again lawyer lawyer lawyer, but &quot;X made comments of a sexual nature to another employee.  As a consequence, we fired him.  If you have questions or concerns, speak to me later.  Moving on.&quot;