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Catherine was a former Dunder Mifflin Scranton branch worker. Michael said that he could have hooked up with her if he tried. She likely quit because Michael made her uncomfortable. The first and only time she is mentioned is in Season 2, Episode 2 "Sexual Harassment".

Michael: "For example: I have never slept with an employee, and believe me, I could have."
Dwight: "(ironically) Yeah, Meredith."
Michael: "No, no, Catherine! Remember her? Remember how hot she was? She would have definitely slept with me."
Kevin: "She wasn't that hot."
Michael: "Yes, she was."