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Employer Liability for Rumors About Sleeping With the Boss

By William Vogeler, Esq. on February 22, 2019 | Last updated on March 21, 2019

General counsel are not really trained in "rumor law," but it's time they learned something about it.

In Parker v. Reema Consulting Services, Inc., an employee sued for sex discrimination based on a hostile work environment. The source of her suffering? Rumors that she slept her way to the top.

The U.S. Fourth Circuit Court of Appeals said she has a case. That was news to lawyers across the country.

Rumor Liability

Evangeline Parker began as a low-level clerk when she started her job, but she ultimately rose to assistant operations manager. That's when it turned ugly with rumors that she slept with her boss.

Adding injury to insult, the company fired her. She sued for sex discrimination and wrongful termination, but a trial judge dismissed.

Reversing the discrimination decision, the Fourth Circuit said Parker could sue over the false rumor that she slept with her boss to obtain promotions. The employer is liable under Title VII of the Civil Rights Act, the appeals court said.

"We conclude that the allegations of the employee's complaint in this case, where the employer is charged with participating in the circulation of the rumor and acting on it by sanctioning the employee, do implicate such liability," Judge Paul Niemeyer wrote for the court.

Administrative Remedies

The appeals panel reversed the trial court's dismissal of the discrimination claim, but affirmed the wrongful termination ruling. The majority said Parker did not exhaust her administrative remedies.

Judge Albert Diaz concurred in the reversal but dissented on the administrative issue. He said Parker's claim with the Equal Employment Opportunity Commission was sufficient, even if it omitted some details.

Diaz said Parker's EEOC claim gave her employer "ample notice" of the issues surrounding her termination. With the decision, general counsel are on notice now.

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