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Spreading false rumor that employee slept with boss for promotion may violate Title VII

By Lorene D. Park, J.D.

By allegedly circulating a false rumor that an employee slept with the boss to get promoted, an employer invoked a “deeply rooted perception” that women, not men, use sex to achieve success, and it could be liable for the resulting hostility, which was “because of” her gender.

A rumor claiming a female employee was promoted to a management position because she slept with the boss potentially could have created a hostile work environment because of her gender. Reversing dismissal of the employee’s sex-based harassment claim, the Fourth Circuit found that her allegations invoked by inference a sex stereotype that women use sex for promotions, and she explicitly alleged that males started and circulated the rumor (including the highest-ranking manager), that despite shared tardiness by her and a male employee, only she was excluded from an all-staff meeting, and that she was told to stay away from the male who instigated the rumor but he was allowed to go to her area and mock her. The employee’s retaliation claim was also revived, though dismissal of her discriminatory discharge claim was affirmed for failure to exhaust. Judge Diaz dissented only as to the wrongful termination claim (Parker v. Reema Consulting Services, Inc., February 8, 2019, Niemeyer, P.).

Jealous coworker starts rumor. Though the employee started working for Reema as a low-level clerk, she was promoted six times, becoming assistant operations manager of a warehouse facility in March 2016. About two weeks after assuming that position, she learned that certain male employees were circulating “an unfounded, sexually-explicit rumor about her” that “falsely and maliciously portrayed her as having [had] a sexual relationship” with a higher-ranking manager to obtain her new position. The rumor originated with another employee who began working there at the same time she did and in the same position. She soon became his superior, though, allegedly making him jealous of and hostile to her achievement.

Rumor spread by management. The warehouse manager, who was the highest-ranking manager at the facility, participated in spreading the rumor and, as it spread, the employee “was treated with open resentment and disrespect” by many coworkers, including her subordinates. In a mandatory meeting in April 2016, when she and the rumored lover arrived late, the warehouse manager let him in but slammed the door in the employee’s face and locked her out, humiliating her in front of all her coworkers. The false rumor was allegedly discussed at the meeting.

The employee arranged to meet with the warehouse manager the next day to discuss the rumor, and he blamed her for “bringing the situation to the workplace.” He said he had great things planned for her but could no longer recommend her for promotions because of the rumor. He added that he “would not allow her to advance any further within the company.”

Employee complains to HR, so does rumor instigator. The employee complained to human resources about sexual harassment by the warehouse manager and the coworker who started the rumor, and the latter responded a few weeks later with his own HR complaint that the employee “was creating a hostile work environment against him through inappropriate conduct.” She was instructed to have no contact with the coworker, but he was allowed to spend time in her work area, distracting her subordinates and smirking at her. She went to HR and to her supervisor, but neither addressed the issue, which allegedly exacerbated her experience of hostility.

Terminated. On May 18, the employee was issued two warnings and fired, allegedly because of the complaint against her and for being insubordinate. She had received no prior warnings, and this allegedly departed from a “three strikes” rule requiring three warnings before termination. She filed suit under Title VII, alleging a sex-based hostile work environment, retaliatory termination, and discriminatory termination. The lower court dismissed her suit, finding among other things that the circulation of the rumor was not based on her gender.

“Because of” sex. Reversing as to the hostile work environment claim, the Fourth Circuit rejected the argument that the actions toward the employee were not taken because she is female but rather because of her rumored conduct in sleeping with the boss to obtain a promotion. Though the employer argued this rumor was not “gender-specific” but was solely about her, this failed to account for all of the allegations, including those alleging the sex-based nature of the rumor and its effects, as well as all inferences reasonably taken from those allegations.

Double standard. The rumor claimed the employee “used her womanhood, rather than her merit, to obtain from a man, so seduced, a promotion,” said the court. This “plausibly invokes a deeply rooted perception—one that unfortunately still persists — that generally women, not men, use sex to achieve success. And with this double standard, women, but not men, are susceptible to being labelled as ‘sluts’ or worse, prostitutes selling their bodies for gain.”

Viewed this way, the complaint invoked by inference the sex stereotype and explicitly alleged that males started and circulated the rumor, that despite shared tardiness only the female was excluded from an all-staff meeting where the rumor was discussed, and that she was told to stay away from the male instigator, but he was allowed to jeer and mock her. Moreover, while both complained of harassment, only the employee was sanctioned; he was not.

Severe or pervasive. The lower court also erred in finding the harassment was not sufficiently severe or pervasive to create a hostile work environment. To the contrary, the employee alleged that the harassment was frequent, humiliating, maliciously designed, and that it permeated the workplace, causing “open resentment and disrespect.” Also, the harassment emanating from the rumor had physically threatening aspects, including the warehouse manager slamming the door in the employee’s face and screaming at the employee while he blamed her for the situation.

Moreover, the harassment interfered with employee’s work. She was blamed for the controversy, was excluded from an all-staff meeting, had her ability to manage subordinates adversely affected, and was told she had no future there because of the rumor. Based on the foregoing, her Title VII sex-based hostile work environment claim was plausible.

Other claims. Because the district court dismissed the retaliation based on its conclusion that the employee did not establish that her belief she experienced sex discrimination was objectively reasonable, and the appeals court had now found the discrimination claim plausible, it also revived the retaliation claim.

On the other hand, it agreed with the lower court that the employee did not exhaust her discriminatory termination claim, which was based on the alleged failure to follow the company’s three-strikes policy. This allegation was absent from her EEOC charge.

Partial dissent. Judge Diaz concurred that the sex-based harassment and retaliation claims were plausible and should be revived, but wrote separately to state that dismissal should also have been reversed on the wrongful termination claim. According to Judge Diaz, the failure to mention the “three-strikes” policy in the EEOC paperwork should not bar that claim because it was reasonably related to her charge and the majority’s approach demanded “more specificity and foresight from an EEOC claimant than our precedents or good sense require.”