A few questions do come up as flags.

Is it within the same marketing arena? Are the sites competing? Do you have a contract? Did they have the program before they were working with you? Did you know about the program before they were working for you?

There is a major Red flag with a few of the answers but when it boils down to things, the Contracts are where you have a set amount of rules and guidelines for their employment and duties as "your" affiliate rep. And what constitutes as a breach in contract.

An odd scenario indeed but there are exceptions to the rule.

Is their own program a paysite? a Traffic site? a TGP?

And If your program has everything but pissing and they only have pissing, is the marketing they do for their program going to encroach the marketing they do for you?