Thanks for everyone's comments and advice.
I spoke with the newly Df'ed worker and he literally brokedown in sobs about how terrible his life ha become and the effect he realizes it is having on his work product. Interetingly enough, the only instances were from my viewpoint where he ha not preformed well is when his dutie involved the dub. Otherwise I have no complaints. I explained this to him and tried to boost his ego by relating various iexamples in the recent months where he exceed expectations in hi job performance and I have always considered him as a member of my "A" team, with a potential to go on to bigger and better jobs within the company.
When he brought up his grievances with the Dub he was adamant that I do not approach the dub and that he would handle the situtation better in the future. Unfortunately, I had to tell him that I had a obligation to not only him but my superior to address the problem because of dicusion that were made in the open to other employees and that I need to defuse this problem immediately.
After talking with him, I spoke with the dub. She walked into my office with such attitude and defiance, I actually think that she thinks that she is being perscuted. Related the issues to her and he did not deny anything that I was told. She also stated that she wanted a transfer from her unit to another unit where she would not have any interaction with the Df guy. Since there are not any other openings with my division, I could not accommodate her request. By the way I had poke to the head of HR and was advied to immediately place her on corrective action and her work will be monitored for the next 3 months. Any reaction similar to the last one, could reult in her dismissal. I related all of this to her and explained to her that if for any reason she felt that she could not carry out her job duties as expected by management, she should either post for a job outside of my area, or find employment with another company.
Of course he walked out of my office in a huff and no doubt went straight the HR.
I'll keep you guys updated.
Note: The newly DF'ed guy really felt bad for him. I remember vividly feeling exactly the way that he does right now. Don't quite what to do