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In Parker v. Reema Consulting Servs., 2019 U.S. App. LEXIS 3965 (4th Cir. Feb. 8, 2019), the United States Court of Appeals for the Fourth Circuit ruled that allegations involving a false rumor that a female employee slept with a male supervisor in order to obtain a promotion, along with the employer’s poor reaction to the rumor, can give rise to an employer’s liability under Title VII for harassment “because of sex.”

According to the allegations in the complaint (which had to be accepted as true given the appeal resulting from the district court’s grant of Reema Consulting Services’ (Reema) motion to dismiss), about two months after Reema promoted Evangeline Parker (Parker) to Assistant Operations Manager (one of several promotions she received), Parker learned that male employees were circulating a rumor that she had a sexual relationship with a higher-ranking manager in order to obtain her management position. The rumor originated from one of Parker’s subordinates and Parker’s supervisor participated in circulating the rumor.

Soon, many male coworkers, including those Parker supervised, treated Parker with open resentment and disrespect. On one occasion, Parker’s male supervisor excluded her from a meeting he held with the other employees to discuss the rumor. When Parker attempted to discuss the rumor with her male supervisor, Parker’s supervisor blamed her for “bringing the situation to the workplace,” that “he could no longer recommend her for promotions or higher-level tasks because of the rumor,” and “he would not allow her to advance any further within the company.”

Parker and her supervisor met a few days later to again discuss the rumor, and her male supervisor again blamed Parker and stated he should have terminated her when she began “huffing and puffing about this BS rumor” and then “lost his temper and began screaming” at Parker.

A few weeks later, the employee who started the rumor submitted a complaint to Human Resources alleging that Parker had created a hostile work environment for him. Human Resources instructed Parker to have no contact with him. While Parker followed these instructions, however, the employee in turn spent time in Parker’s work area distracting employees Parker managed, staring at Parker for long periods of time, and smirking and laughing at Parker.

Eventually, Parker’s supervisor simultaneously issued her two written warnings – one for her harassment of her subordinate and the other for having poor management skills and being insubordinate to him. Based on this misconduct, Reema terminated Parker’s employment.

In holding that the district court erred in dismissing Parker’s complaint, the court determined that Parker’s allegations stated a claim under Title VII for a hostile work environment based on sex because (1) the harassment was based on sex, and (2) the harassment was severe or pervasive enough to alter the conditions of Parker’s employment.

First, the court determined that the allegations supported Parker’s claim that the harassment was based on sex. The court described how Parker (1) plausibly invoked the “deeply rooted perception” that women, and not men, use sex to achieve success, (2) explicitly alleged that males in the workplace circulated the false rumor, and (3) that Parker, as a female, was treated differently than male employees.

Second, the court concluded that the harassment Parker faced was severe or pervasive such that it altered the conditions of her employment and created an abusive atmosphere. The court explained that the rumor preoccupied Parker as well as management and other employees for several weeks and that the harassment was humiliating because “it ‘goes to the core of somebody’s merit as a human being’ to suggest they were promoted not on worth but for sexual favors.”

The court’s decision is significant because it illustrates how sexual rumors in the workplace, especially those suggesting that a female employee used sex to earn a promotion, can support a claim of harassment if the employer endorses the rumors or fails to take adequate steps to stop them.