The simple answer is you need to fire them — assuming you can legally. Ask your lawyers.
The longer answer is you may need help to do it without excessive drama, and ideally, they resign and step away and you don’t try have to fire them.
Usually, it helps to bring in a trusted third party in this situations. Or at least try to. If you both have a mentor in common, that can help a lot. He/she needs to go. But if you can maintain mutual respect, and do it on terms than protect everyone’s self of sense, that’s better in the long run. At least try.