This is more than an affair though. This is an affair with someone he has a business relationship with and thus it becomes the interest to the business. There are many many cases where someone give business favors to the person they are having an affair with.

My company is willing to hire my wife, but she wouldn't be allowed to work for me, nor I her.

If he’d had an affair with his physical therapist absolutely no one would care and he wouldn’t be out- it’s the totality of his actions and his extreme lack of judgement at issue.

You should be fired if you're having an affair with a spy, or with someone who reports to you.