Last month, the club said there was "no question" that bowler Azeem Rafiq was the victim of racial harassment and bullying during his first spell at the county.
But today (28 October), it issued a statement saying no further action would be taken.
The statement went on to say the club "should be proud of the work that the club has done to improve diversity and inclusion" but that there "remains much to be done going forward".
On social media, Rafiq described the words as "embarrassing", accusing the club of having given racism a "green light".
The England and Wales Cricket Board issued its own statement. It said: "This is a matter with many serious allegations at its heart and the ECB’s regulatory team will now consider the report as part of its investigation.
"We anticipate that it will take time for the regulatory process to reach its conclusion, but it is imperative that this is completed thoroughly and with fairness to all involved."