personally, either muzzle the dog or someone needs to move out if they cant play nice. ESPECIALLY since YOUR dog was there first. I have a no tolerance policy when a dog comes into my home and starts behaving badly toward my dogs. I dont care if they are family. My house, my rules. Work on training first. If that doesnt work, i would make it clear that the troublemaker wasnt welcome and needs to go or be confined. The house belonged to your lab first. I love GSDs but that would NOT fly.