Your employee contends that she is trying to provide information you want, but the truth is that she is providing information she wants. By doing so, she is mistakenly thinking that she is protecting and promoting herself. She does not realize that she is undercutting trust in the working relationship, and if trust goes, she will not be far behind.
Her comments about the meaning of lying are particularly disconcerting. Although it is rarely productive to start defining words for employees, this particular employee needs to understand that although stating an untruth is a lie, the definition of lying includes an intent to deceive others or give a false and misleading impression. Her behavior falls right into this category, and that's no lie.
From this point on, she needs to understand that when you ask her about a project, she needs to provide the full story. Let her know that there are no satisfactory definitions, rationalizations, or explanations when it comes to withholding material information. You should also formally advise her of the consequences if this insubordination continues. When it comes to the workplace, it's truth or consequences.
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