> No excuses or rationalizations here, but: Do we fire people for cheating on their spouse? Seems like a private, family matter.

It is not so clear, if this is about his character and can he be trusted. This is evidence that someone is capable for lying and doing something that might not be in line with company ethics either. I don't think we can assume from humans that "he lies only in his private life, but can be totally trusted on business side".