YORKSHIRE county said it failed to resolve their dispute with former player Azeem Rafiq via judicial mediation and it will now go to a private Case Management Conference.
A hearing was due to begin in private this week after Rafiq had filed a claim against his old club under the Equality Act - alleging discrimination and harassment on the grounds of race.
Rafiq, 30, who played for the White Rose county in two spells between 2008 and 2018, also claiming victimisation and detriment in an effort to address racism at his former club.
"Having tried to find a way to resolve the issues between the club and Azeem Rafiq through the process of judicial mediation, the club is sorry to say that resolution did not prove possible.
"As the matter is still within the Employment Tribunal process, it would be inappropriate to comment further. We now expect the case to be listed for a private Case Management Conference," Yorkshire has said in a statement.
After Rafiq spoke out last August, Yorkshire had set up a separate investigation which is still ongoing into his allegations.
Chadwick Lawrence, the law firm representing Rafiq had published details last December, in which what Rafiq alleges was "expressly racist dressing room banter" aimed at non-white players.
It claimed how the club failed to provide halal food facilities to players of Pakistan ethnicity and tried to enforce a drinking culture on those players. Then the claims of him being denied a chance to play Twenty20 cricket in the winter and lack of pastoral care offered by the club after his son was stillborn.
Moreover, the county also ignored Rafiq's complaints of racism and victimisation throughout 2018 and the severe mental health issues he suffered as a result of his treatment by the club, including depression and contemplating suicide.
An independent law firm, Squire Patton Boggs was commissioned by Yorkshire to investigate the player's allegations of institutional racism last year. However, Rafiq and his team have questioned the inquiry's impartiality.
When Rafiq had filed his claim, Yorkshire had said in a statement: "Racism has no place in our society or in our sport.
"We have taken the allegations made extremely seriously, launching a thorough, independent investigation and now await the results and recommendations from this early next year.
"This is an important investigation for the club and a distressing time for all involved but with this process under way and the investigation team currently conducting interviews, it would be inappropriate for us to go into further detail on any ongoing legal matters at this stage."
