ugly arms

I wasn't sure exactly which topic to post this question so here it goes. As you may or may not know, I am an HR of one and constantly struggling with implementing HR issues that have never been addressed and figuring this all out as I go. So here is my current problem. I have an employee who obviously has a nervous problem and is constantly "picking" and "scratching" at her arms. Due to this, she has sores and scabs all over her arms. Not a pretty sight!! And, not only have her co-workers suggested she stop scratching so the sores will heal, but our customers are starting to make comments. The problem is most people don't know why her arms look like this, so it is creating much concern and curiousity amongst some of her co-workers and most especially the CEO-Oh, crap!! Now for my question- can I legally talk to her about this? And, what should I say without crossing any legal issues?

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