The correct answer is D: Explanation
You should take every complaint of sexual harassment seriously, and investigate. Do your best to interview every witness, including the former employees. You should not reject the complaint, out of hand, because you predetermine the complainant is not credible. Once the investigation is completed, take any necessary and appropriate remedial action.
You should also meet with the managers and discuss their unprofessional behavior. If they do not admit screaming at each other in front of other employees and customers, further investigate the incident.
If the verbal altercation is confirmed, you should discipline both individuals involved. However, be aware that Jennifer may contend that she was retaliated against because she participated in a sexual harassment investigation.
The U.S. Supreme Court held in Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee (2009), that an employee who speaks out or answers questions about a co-worker's improper conduct during an internal discrimination or harassment investigation has engaged in a "protected activity" under Title VII. According to the Court, any adverse action taken against the employee/witness after an investigation can subject an employer to a retaliation claim under Title VII.
While retaliation may be a viable claim, the circumstances would not seem to support her possible retaliation claim provided that the unprofessional behavior relates to something other than sexual harassment, and is clearly documented by several witnesses including unbiased customers. Prior to taking any adverse action against Jennifer, you should consult with an HR Professional or qualified employment attorney for guidance.