A manager at your company overhears another employee who is Caucasian directing the N-word at an African-American employee. When she confronts him, he claims that he was using it as a term of endearment –a claim that is not explicitly contested by the friend to whom he’s directing it. The manager, concerned that her being Caucasian and in a position of authority, fears her intervention may escalate things, so she chose to accept the explanation and move on. The manager has come to you, the Human Resources Manager, for advice.