The employee may have created a separate TimeStation account using their eMail address. The employee should login to their existing account, click on "My Profile" in the top right corner of the page; then change their eMail address to something different like "inactive_user@domain.com".
This will release their eMail so that it can be used with your company account.
Alternatively, you may leave the eMail address field blank for the employee as this field is only required if you want the employee to login to the TimeStation web site or mobile App with their own eMail and password.