My question involves labor and employment law for the state of: Wisconsin
I have a coworker who routinely (I've recorded 20+ documented instances) has verbal outbursts including profanity, racial/ethnic slurs, misogyny, homophobia, etc. When I've confronted him directly and informed him that's not proper decorum for a business, he's told me to 'F- off.', 'Go F yourself.' etc. His responses are always extremely hostile. He's in his 70s and showing no signs of retiring so management has more or less taken a "He's not going to change his ways." stance about it. The most they've done so far is had one closed door discussion with him back in March after he blew up again and I confronted management informing them that I had, at that point, 13 documented instances and we were only 3 months into the year. There was absolutely no discipline or consequences for his actions.
Yesterday, during lunch, the topic of gay marriage came up on the television at which point he started in a tirade heavy with slurs directed at homosexuals. I informed him that I have family who is gay and asked that he refrain from using such language at work. He refused and then directed a slur at my family members. At this point I behaved inappropriately by engaging in the argument with him and it escalated. I should have gone to management at that point, but frankly after reporting him to management well over a dozen times and him only getting a verbal discussion once I've given up on me reporting having any effect on the situation.
The situation is even more compounded because it's a family business. I'm the next in line to run the business but at this moment, despite being called a 'manager' I have no authority to discipline him at all, and the person I'm reporting him to is my uncle. Further, the coworker in question was my grandfather's best friend, and my grandfather (who recently passed) was the former owner/president who let this behavior carry on for over 2 decades, although it was a different time then and a lot more things slid that shouldn't have. This coworker also helped my grandpa greatly when he got sick which, I feel, makes the president/my uncle hesitant to discipline him because he feels a twisted sense of obligation to him for helping out his dad/my grandpa. If I were to take any action against the company for it's failure to respond, it would effectively hurt myself in the process as this is my future financially, sort of a twist on cutting off my nose to spite my face.
Lastly, we also just purchased another company which means 14 new employees of various racial/sexual/social/economic/etc. backgrounds that will be forced to interact with this coworker at some point.
So my questions are:
1. Is there any hostile workplace protection given that he's using slurs/terms against a protected class, even though the one being harassed (me) is not a member of those protected classes? I.e if he goes off using racial slurs about African Americans even after I inform him that it's inappropriate and I don't want to hear it, is that still a hostile workplace even though I myself am not African American?
2. What about legal responsibility of the company given that they've been made aware of it on numerous occasions and have failed to do anything to rectify the situation?
3. What sort of damages could result if he were to have an outburst around a new employee and they were less tolerant of it than others in the past and decided to report it?
4. What are all my practical options on how to handle the situation?
5. This is sort of for piece of mind more than anything, but after it happened two coworkers who were in attendance during the argument yesterday made the statement that I over-reacted because when people are at lunch, even on site in the workplace lunchroom, anything they say is 'between friends'. I don't agree with this. Am I completely alone on that thought?

