The U.S. Court of Appeals for the Fourth Circuit found that spreading a false rumor that a female employee slept with the boss in order to get promoted could create a sexually hostile work environment in violation of Title VII.

In Parker v. Reema Consulting Servs., Inc., a female employee was promoted rapidly to an assistant warehouse manager position. A jealous co-worker started a false rumor that she slept with a higher-ranking manager to get the job, and the rumor was spread by the warehouse manager and others. Although the employee complained to human resources and her supervisor, nothing was done to address the issue. She was subsequently terminated, allegedly for insubordination and because of a complaint against her by the jealous co-worker.

The Fourth Circuit held that the rumors were sex-based in nature, and subject to a “deeply rooted perception – one that unfortunately still persists – that generally women, not men, use sex to achieve success.” The Fourth Circuit considered the claim to be based on sex stereotyping. It found the harassment to be severe and pervasive, as the employee alleged that it was frequent, humiliating, malicious, and permeated the workplace which caused “open resentment and disrespect.”

While gossip and rumors are typically part of any workplace, this case instructs employers to be particularly sensitive to rumors that implicate a protected characteristic and that can undermine working relationships in the workplace. It is important to address such rumors directly and decisively in order to avoid potential liability in the future.