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Rumors about the sexual activities of people at the workplace can be grounds for harassment or discrimination lawsuits. According to the 4th Circuit Court of Appeals, an employer can be liable for sex discrimination claims by not stopping false rumors about an employee sleeping with a person in management. If this precedent is not reversed by the Supreme Court, it will continue to impact companies in Tennessee and all other states.

The decision made by the 4th Circuit involved a case where a woman experienced a hostile work environment due to rumors about her sleeping with the son of the company’s CEO. The rumor was started by a male co-worker who started at the company at the same time but didn’t receive a promotion. A warehouse manager spread the rumor further and didn’t allow the woman to participate in meetings where the allegations were discussed.

The rumor was a clear case of sexual discrimination because the woman was punished by the male member of management was not. By not stopping the rumor, the company made it clear that they believed women, but not men, use sex to further their career. Even though the rumors weren’t true, the woman’s career was negatively affected by the mere perception of her activities.

Individuals experiencing a hostile working environment due to rumors or other forms of sexual harassment and discrimination may be able to get compensation. Damages can be sought for lost wages, future earnings, a ruined reputation, and pain and suffering. Some companies may want to settle while others will choose to go to trial. Some attorneys will agree to work on a contingency basis and won’t require payment unless the client wins the case or a settlement.