HR's job is to ensure that conflict gets resolved internally so it stays an HR problem and doesn't escalate to a legal or PR problem. HR has failed miserably in this instance, regardless of whose side you think they should be on.
I've seen HR departments give severance in scenarios like this in exchange for legal gag order. It may not be ethical, but it is legal in many states and does happen. There is Karma, but that is another story.
