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Fourth Circuit Rules False Rumors About Female Employee Give Rise To Employer Liability Under Title VII.

Published by and on May 24, 2019

The Fourth Circuit holds that false rumors that a female employee slept with male boss for a promotion can give rise to Title VII discrimination based on sex where the employer is charged with participating in circulation of the rumor and acting on the rumor by disciplining the female employee.

In Parker v. Reema Consulting Services, Inc., the Fourth Circuit addressed the issue of whether a false rumor that a female employee slept with her boss to obtain a promotion can give rise to her employer’s liability under Title VII of the Civil Rights Act of 1964 (“Title VII”) for discrimination “because of sex.” The plaintiff employee in Parker claimed that she was subjected to a hostile work environment, retaliatory termination, and discriminatory termination based on a false rumor spread by a co-worker and a manager. The Court concluded that “where the employer is charged with participating in the circulation of the rumor and acting on it by sanctioning the employee,” the employer may be liable under Title VII.

The plaintiff in Parker was promoted six times during her employment with Reema Consulting Services from December 2014 to May 2016. The plaintiff alleged that two weeks after her last promotion, she learned that male colleagues were spreading an unfounded rumor that she was having a sexual relationship with a higher-ranking manager in order to obtain her management position. Not only did lower ranking employees participate in circulating the rumor, the highest-ranking manager at the same work location also participated in spreading the rumor. When the plaintiff attempted to address the issue with the manager, the manager allegedly blamed the plaintiff for bringing the situation into the workplace. The manager further told the plaintiff that he would no longer recommend her for promotions and would not allow her to advance with the company because of the rumor.

Following the confrontation with her manager, the plaintiff filed an internal sexual harassment complaint with Human Resources about the manager and the co-worker who started the rumor. In return, the co-worker filed an internal complaint against the plaintiff. Despite plaintiff’s continued complaints about her co-workers, the company took no actions to stop co-workers and the manager from continuing to spread the rumor and mock the plaintiff at work. Shortly thereafter, the plaintiff was issued two written warnings (one regarding the HR complaint against her, the other for allegedly poor management ability and insubordination). Her employment was subsequently terminated, despite never having received any prior written discipline. Under company policy, an employee was only subject to termination after three written warnings.

The plaintiff claimed that the written warnings were unfounded, and that Reema Consulting failed to follow company policy when it fired her after only two written warnings, while no other male employee had been fired for having fewer than three written warnings. The plaintiff further claimed that she was subjected to a hostile work environment based on how she was treated following circulation of the rumor. The District Court dismissed the plaintiff’s claims, stating that the complained of conduct was neither severe nor pervasive enough to establish a hostile work environment. The District Court further opined that her complaint about the rumors was not based upon gender.

On appeal, the Fourth Circuit disagreed, stating that the plaintiff invoked “a deeply rooted perception that generally women, not men, use sex to achieve success,” and this “double standard” that “women, but not men, are susceptible to being labelled as sluts” invokes by inference claims based on gender stereotypes. The Fourth Circuit further concluded that the alleged conduct of the plaintiff’s co-workers and supervisor was severe and pervasive enough for plaintiff to state a hostile work environment claim under Title VII. The Fourth Circuit ultimately remanded plaintiff’s hostile work environment and retaliation claims.

Welter Insight

Parker provides two key takeaways for employers:

  • Employers should take employee complaints seriously, even if based on rumors. Although the rumor in Parker was largely spread before the plaintiff filed her HR complaint, there was no indication that the company investigated her complaint, nor did it take any action to protect her. Rather, co-workers’ and management’s behavior were left unchecked, and the plaintiff continued to be subjected to a hostile work environment. Had the company investigated and taken appropriate steps to remedy the issue, the company may have avoided the hostile work environment claim.
  • Employers should consistently apply workplace policies and treat similarly situated employees equally. Reema Consulting failed to evenly apply its three strikes policy when it terminated the plaintiff’s employment. Failing to consistently apply workplace policies provides damaging evidence for employers defending against discrimination or retaliation claims.

Ultimately, employers may be legally liable if they fail to adequately investigate and address employee complaints. Parker serves as a reminder that all employee complaints should be taken seriously and that managers should be properly trained in handling workplace complaints, even if based on rumors. If unsure how best to handle an employee complaint, employers should seek legal counsel before dismissing a complaint or taking any adverse employment decisions.

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