In the problem concerning $[$ Select $]["$Debra$",$ "Morris"$],$ the best approach is to clear up the misunderstanding. You might preface your reference letter with a clear declaration that your job is to make the best case for the student. Such full disclosure should not cost the student a job they should get, but it should give the employer a fair sense of how to read your letter, and help you maintain the good relations upon which your ability to help other students depends.

In the problem concerning $[$ Select $]["$Debra$",$ "Morris"$],$ you seem to have at least two choices. Get the student a new job or go to the manager's superior with your information. Resolving this problem in a responsible way means putting the student ahead of the employer, society, and justice. Under the circumstances, anything else would be unethical.