Some talk doesn’t belong at work. Period. If you don’t ban racist comments, you’ll probably face an EEOC lawsuit.
Recent case: Taneesha Thomas, who is black, worked for a Japanese restaurant and sushi bar. She complained tothat a customer addressed her with a racist slur. Shortly after, an assistant manager used the same slur when addressing her. This happened several times, even after she complained. Then someone drew a Ku Klux Klan hood on her end-of-shift sales report.
She complained to the EEOC, which filed a federal harassment lawsuit. The court said some words are so obviously offensive that their repetition, especially by supervisors, warrants a trial. Thomas will get a chance to prove the comments harmed her. (EEOC v. Mask Enterprises, No. 07-359, WD PA, 2008)