First of all, the most important thing: talk to a lawyer. The real ones that demand money, not random people from the internet. Sexual harassment is a particula

First of all, the most important thing: talk to a lawyer. The real ones that demand money, not random people from the internet. Sexual harassment is a particularly nasty thing, because no matter what you do, judges will always be biased against you: You did nothing? How dare you accept sexual harassment at your company! You fired him? How dare you fire that innocent guy groundlessly! Second of all, you need to listen to his side of the story as well. People are probably going to down-vote me for this one but taken out of context text messages don't mean very much. His friends could've played a very bad joke on him, the messages could be forged or he could've made an honest mistake. Hell, if I were in your place I even would give the guy a second chance if he honestly apologized. But do make sure you watch him closely if you decide to take this route. These people do not tend to improve.