What is the right thing that a Christian should do in this situation. I own a small business with several?

She is not working as if she was working for the Lord. She is causing a distraction in the work place and that should not be tolerated. I would show her the door she she has been warned about the behavior and it has not changed. ( she has not repented) and with the gossip she could opening you up to lawsuits for slander, libel, defamation, ect- since she is your employee- you are responsible for what she does at work.