The under-fire retailer said Herbert Smith Freehills will carry out a probe after a staff petition demanded an end to alleged “forced hugging” by Ray Kelvin.
Mr Kelvin is also accused of asking young female staff to "sit on his knee, cuddle him or let him massage their ears".
Herbert Smith will report to a committee of the company's non-executive directors which will be chaired by Sharon Baylay.
Shares fell to a five-year low this week as investors digested the news and fretted over the fallout.
Ted Baker has denied that hugging was "insisted upon".
More allegations have since emerged including claims Mr Kelvin pushed an employee against a wall because he wasn't invited to his wedding.
The 63-year-old is said to have become angry after learning the engaged couple, both senior staff, had only invited him to their reception and not the ceremony.
He is alleged to have berated the bride-to-be before pinning her fiance against a wall in February 2016.
Mr Kelvin is said to have then paid them off with a gagging clause, the Telegraph has reported.
One witness said: “He [Kelvin] was shouting at this woman. He was talking to her quite aggressively. Then they went into this meeting room.
“She came out after about five minutes, crying. When Ray came out, he was still fuming.
“Then the director came over and wanted to have a word with Ray and then they had a bit of a shouting match.
“It was quite loud and then Ray held him up against the wall.”
Following the incident, the couple left the company but were both given pay-offs after agreeing to sign non-disclosure agreements.
Kelvin already faces bullying and harassment allegations.
He is accused of making sexual innuendos towards staff, stroking people’s necks, talking about his sex life.
Kelvin is said to have hugged new recruits for more than a minute.
The firm says a “thorough independent investigation” will be conducted into those allegations, which it disputes.
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