Workplace Gossip and Rumors May Give Rise to, and Gossip in Workplace Can Create, Employer Liability For Harassment

Parker v. Reema Consulting Servs.,  http://www.ca4.uscourts.gov/Opinions/181206.P.pdf (4th Cir. Feb. 8, 2019) is being heralded by some as a novel departure from the general rule in other circuits that typically gossip and rumors do not give rise to Title VII liability. https://www.jdsupra.com/legalnews/rumors-and-gossip-in-workplace-can-63380/  The appeal to the Fourth Circuit attracted a large group of amici – from the EEOC to Hadassah to two international unions to the Oklahoma Coalition for Reproductive Justice.  That said, I do not see the decision itself as a departing from some well-established law. Rather, I believe the opinion itself provides nothing more than a caution for all employers to be mindful of what may be going on in their workplaces, and that how they respond can create liability.  The decision is also yet another reminder that “employment” and “labor” laws in this country do not always work together.

When looking at this  case, it is important to recall how it reached the United States Court of Appeals for the Fourth Circuit in the first instance.   This was an appeal from a dismissal of a lawsuit by a federal district court based on Rule 12(b)(6) of the Federal Rules of Civil Procedure. https://www.jdsupra.com/legalnews/rumors-and-gossip-in-workplace-can-63380/  That is, before any answer was filed, the defendant employer filed a motion to dismiss the lawsuit for “failure to state a claim upon which relief may be granted.”  In such a posture, a court is to accept as true all of the facts alleged in the complaint.

Those “accepted as true” facts:  From December 2014 until May 2016, the plaintiff Evangeline Parker worked for defendant Reema Consulting Services, Inc., (“RCSI”) at a facility in Virginia. While she began as a low-level clerk, she was promoted six times, ultimately rising to Assistant Operations Manager in March 2016. In that new position, she directly supervised a number of employees. Quoting the Fourth Circuit’s opinion:

About two weeks after Parker assumed that position, she learned that “certain male employees were circulating within RCSI” “an unfounded, sexually-explicit rumor about her” that “falsely and maliciously portrayed her as having [had] a sexual relationship” with a higher-ranking manager, Demarcus Pickett, in order to obtain her management position. The rumor originated with Donte Jennings, another RCSI employee, [remember, this is what the plaintiff is alleging – at this point, there is nothing demonstrating that the employer “knew” who originated the rumor, or indeed whether the employer conducted an investigation] who began working at RCSI at the same time as Parker and in the same position. Because of her promotions, however, Parker soon became Jennings’ superior, making him jealous of and ultimately hostile to her achievement.

The Fourth Circuit also accepted as true the allegations that highest-ranking manager at the warehouse facility, Moppins, on at least one occasion participated in spreading the rumor, that Moppins had treated the plaintiff and the male with whom she was rumored to have had the relationship differently in permitting access to a meeting where, Parker contends, “the false rumor was discussed.” The day following the meeting to which the plaintiff was denied access (again crediting the complaint), the plaintiff Parker met with  Moppins to discuss the rumor.  At that meeting (according to the accepted as true allegations of the complaint), Moppins blamed Parker for “bringing the situation to the workplace.” Parker alleges that Moppins  told her that while he had “great things” planned for her, he “could no longer recommend her for promotions or higher-level tasks because of the rumor.”

The plaintiff filed an internal complaint of sex discrimination / sex harassment against Moppins and Jennings.  A few weeks later, Jennings (the alleged source of the rumor) filed his own internal complaint, alleging that Parker “was creating a hostile work environment against him through inappropriate conduct.” The complaint alleges that following Jennings’ complaint, she (Parker) was instructed to have no contact with Jennings. Parker continues in her complaint that while she followed that directive, supervisors allowed Jennings to come into her work area, “talking to and distracting employees she managed.”

The Fourth Circuit panel which decided the appeal, stated:

To state a claim under Title VII for a hostile work environment because of sex, the plaintiff must allege workplace harassment that (1) was “unwelcome”; (2) was based on the employee’s sex; (3) was “sufficiently severe or pervasive to alter the conditions of employment and create an abusive atmosphere”; and (4) was, on some basis, imputable to the employer. Bass v. E.I. du Pont de Nemours & Co., 324 F.3d 761, 765 (4th Cir. 2003); see also EEOC v. Sunbelt Rentals, Inc., 521 F.3d 306, 313–14 (4th Cir. 2008).

In this appeal, only the requirements that the harassment be based on sex and that it be sufficiently severe or pervasive are at issue. We address each in order. [Boldface emphasis added.]

The two factors identified by the Fourth Circuit were the two factors upon which the federal district court relied in granting the Rule 12(b)(6) motion to dismiss for failure to state a claim.  The federal district court – and thus the Fourth Circuit Court of Appeals – had no occasion to address the “was, in some basis, imputable to the employer.” 

More than three decades ago, the Eighth Circuit Court of Appeals decided, in Hall v. Gus Construction Co. Inc., 842 F. 2d 1010 (8^th Cir. 1988) https://scholar.google.com/scholar_case?case=3826784991737668231&q=gus+construction&hl=en&as_sdt=1000003 that the “predicate acts underlying a sexual harassment claim need not be clearly sexual in nature,” that what is required is conduct “that would not have occurred but for the fact that [the plaintiffs] were women. Intimidation and hostility toward women because they are women can obviously result from conduct other than explicit sexual advances.”

The Fourth Circuit Parker case involves an employee’s fairly meteoric rise from a low level clerk to a supervisory employee, followed by a workplace rumor that the employee had a sex with a superior to obtain the promotions.  The Fourth Circuit observed that in her complaint, the plaintiff, “plausibly invokes a deeply rooted perception – one that still persists – that generally women, not men, use sex to achieve success.”  Thus the requirement that there be a credible allegation that the conduct was “based on the employee’s sex” was met.

The second element the Fourth Circuit addressed was whether the allegations of the alleged harassing conduct were insufficient to meet the “severe and pervasive” standard.  In Ashcroft v. Iqbal, 556 U.S. 662 (2009), https://www.law.cornell.edu/supct/html/07-1015.ZS.html  the United States Supreme Court ruled that a complaint in federal court must state enough facts to establish a “plausible” complaint.  Plaintiff’s counsel certainly alleged lots of facts – facts which for the purpose of the motion to dismiss are all assumed true.  There is more than a rumor circulating among nonsupervisory co-workers.  There is (allegedly) a supervisory employee repeating the rumor to other employees, a supervisory employee telling the plaintiff that because of the rumor and because she is complaining about the rumor, she needs to recognize that she should no longer have any hope of moving up in the company, there are (allegedly) impediments placed or tolerated by the employer to the plaintiff adequately functioning as a supervisor.

In rejecting the federal district court’s characterization of the allegations as a “few slights,” the Fourth Circuit panel observed that – based on the allegations of the complaint – “Indeed, the harassment was continuous, preoccupying not only Parker, but also management and the employees at the Sterling facility for the entire time of Parker’s employment after her final promotion.”

Again, I find nothing surprising in either the result reached by the Fourth Circuit or the conduct of plaintiff’s counsel in making detailed allegations in a federal court complaint such that the “plausible” standard of Iqbal might be met.  Here the allegations are that the employer’s response was integral to the making the conduct illegal.

And that is where I believe the primary lesson for employers lies.  “Boys will be boys” is not – and in the Eighth Circuit has not been since at least Gus Construction – a defense.  If you, as an employer, become aware of conduct even colorably relates to a protected-class status, you should promptly respond in accordance with your internal policies on discrimination.  It has been the law for almost forty years that, while an employer cannot guarantee an environment free from all bigotry and cannot change the personal beliefs of its employees, an employer has an obligation to let it be known that illegal harassing conduct will not be tolerated, and to prevent “such bigots from expressing their opinions in a way that abuses or offends their co-workers.”   See, e.g., Davis v. Monsanto Chem. Co., 858 F.2d 345, 350 (6th Cir. 1988); DeGrace v. Rumsfeld, 614 F.2d 796, 805 (1st Cir. 1980)