If an employee has an HDHP and HSA at thier place of work and their spouse is on a separate plan with an FSA, is that OK?

No. Just as an HSA covers the spouse and tax dependents, so does an FSA. Unfortunately, the IRS considers an FSA to be “Insurance” because it is guaranteed by the employer. Because it is insurance in the eyes of the IRS, it provides coverage that is something other than a HDHP. This disqualifies the employee from contributing to the HSA until the FSA is no longer in effect. The balance in the FSA is immaterial.