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In my experience, the best thing to do is to send you a letter, by certified mail, terminating the contract and returning her deposit. In that letter you want to set out that her treatment of your employees is not acceptable to you and that the best solution is to terminate the contract, return her money, and let her work with someone with whom she's going to be more compatible. It's best to quickly and firmly cut the cord rather than let this linger any further. She may try to intimidate you given your description of her, but she really has no cause of action because she has no damages. And, her actions with your employees give you the right to terminate.
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