[MalcolmDiggs]

I would feel comfortable giving one warning (in person). I'd explain what I saw/heard, I'd explain how I felt about it, and I'd leave it in their court to change their behavior.

If they took it as a learning experience and showed a genuine interest in changing, I'd still be comfortable working with them. If they continued being disrespectful, I'd have to part ways with them.

I always like to give people a chance to redeem themselves; I'm sure I've said stupid things that offended others in the past, and I'm grateful for the opportunities I've had to learn and grow. Nobody's perfect, we're all human.