It is wrong to call others derogatory terms.
Paul is an older white man who has just hired a Jill, a young black woman to be part of his team at work.
Paul wants to give Jill a nickname like he does for all his team members.
Paul asks Jill what nickname she would be comfortable with him using.
Paul gives Jill a nickname that sounds like a term most people would consider a racial slur.
Paul has an approved nickname to call Jill by and Jill appreciates that Paul respected her enough to ask.
Jill reports Paul to HR, and he is given a formal reprimand for using racist language at work.