Hicks: Nor will he punish his servants; rather he will pity them and make allowance on occasion for those who are of good character.
Yonge: He will punish his servants, but also pity them, and show indulgence to any that are virtuous.
Mensch: Nor will he punish his servants, instead her will pity them and pardon any who are of good character.
Will the σοφός punish their servants or not? The original begins with ουδέ, a mark of negation, so it appears Hicks and Mensch have the upper hand here. So what does the Epicurean do? They will not κολάσειν "chastise or punish" (appears to refer to harsh punishment, akin to severely pruning a tree). Instead, they will ἐλεήσειν "have pity, show mercy" and show συγγνώμην "pardon, forgiveness" for those who are earnest and sincere σπουδαίων (which is there same word DL says that Epicurus uses in salutation in his letters : Σπουδαίως ζῆν "May you live earnestly.")
Trivia: οἰκέτας = "household slaves". None of the translators wants to use the word "slave." Servants aren't the same as slaves. A modern application then is that an Epicurean will be benevolent to "those working for them" and will be sure to encourage them and not treat them harshly.