Hi QuantumHP,
To narrow down the root cause of the issue, I suggest you try to do the following actions.
1. Check Employee2's default contact permissions, remove Employee3's permission.
2. New a folder in Employee2's contact, and then add a testing user to the new folder.
3. Share the new folder to Employee3, and then add the shared contact group on Employee3's outlook 2010.
Thanks,
Keats Ge