The Scream star opened up about his fling with waitress Jasmine Waltz during a candid radio chat with Howard Stern on Tuesday (12Oct10) - a day after he and actress wife Courteney Cox announced they had separated.
Arquette has since apologised for being too open on air, revealing that he had bedded Waltz "maybe twice" following the break-up of his marriage.
And tabloid reports on Friday (15Oct10) suggested the actor had fired the pretty brunette as the face of his new Beacher's Madhouse club at the Hollywood Roosevelt Hotel.
A source told In Touch magazine, "David insisted that they hire her to be the face of the club. She was going to model for all the promotions and manage the cocktail servers."
The publication reported that Waltz has been told her services are no longer needed, but Arquette's club partner Jeff Beacher "respectfully disagrees" with the story.
He tells WENN, "We haven’t as yet hired any staff for our theatre, or any performers, as we just had our first auditions yesterday. Jasmine and David were friends, and we would be only too happy to consider Jasmine for any position she may wish to apply for once we complete construction and are actually open for business in early 2011.
"If she can build a stage, or construct a rig to fly little people from one end of the theatre to the other, we'd hire her today."