In some cases the employee can be trying to bait you into getting some kind of confrontation, but you don't have to go there
I don't know about anyone else here but if it were me, the employer, and I had an employee who kept trying to push my buttons, he would be 'let go' in a heartbeat.
Do you have any idea how many people out there looking for work? There are millions of people who would love to take this asshole's place. People that have jobs and don't respect people in the workplace shouldn't be working there.