Let's be honest here, personal and professional life will always impact each other. They can't be separated no matter how much you want to reason it out. I can'

Let's be honest here, personal and professional life will always impact each other. They can't be separated no matter how much you want to reason it out. I can't image how you two will be able to get into a meeting room and only discuss about business. And if you are unable to do that his technical competence will not add any value to you. His words may sound convincing, but your employee sounds arrogant and self-righteous if he says this shouldn't be a work matter. I would suggest that you first take a break from your employee, make up your mind to terminate him, and finally talk to a lawyer to understand your options from him.