Personnel e.bulletin – July 2012

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Prepared for the PHCC Educational Foundation by TPO, Inc.

In times of economic uncertainty, employees are often fearful about losing pay, benefits, or even their jobs. Not surprisingly, these concerns can translate into water-cooler discussions about who may be next to get the ax, or who is making how much money. Now conveyed by e-mail, text messages, IMs, blogs, and Twitter, word can spread beyond the company walls instantly and to virtually anyone. At a time when companies are facing serious business challenges, office gossip is yet another hurdle to clear.

Gossip generally takes two forms. It can consist of rumors about company changes such as financial troubles, layoffs, promotions, or staffing changes. It can be personal gossip centered on who in the organization is doing well, having an affair, or grappling with personal problems. Both kinds of rumor mongering—business gossip and personal gossip—can be detrimental to the workplace. Even seemingly casual remarks between co-workers can disrupt an otherwise peaceful workplace. Some effects are:

  • Time Wasted The time spent on office gossip takes away from time that should be devoted to work. Plus, the morale of the employee who is the focus of gossip will decrease, along with that employee’s ability to be productive.
  • Legal Liability Office gossip that targets individuals based on legally protected characteristics such as race, age, sexuality, gender, pregnancy, or disability can expose the company to legal action for violation of anti-discrimination laws, harassment laws, and other civil rights statutes. Assuming that the gossip is not true, there also may be a cause of action for defamation. If an employee’s confidential health information is the subject of gossip, there may be a violation of the Health Insurance Portability and Accountability Act (HIPAA), the Americans with Disabilities Act (ADA) or the Family and Medical Leave Act (FMLA).
  • Management Breakdown If management takes no action in response to injurious office gossip, or management participates in the gossip, employees may view management as completely ineffective. Employees may also assume that inaction means that other kinds of misbehavior, such as harassment or discrimination, also will be ignored or implicitly permitted.
  • Employee and Third-Party Reaction If employees hear that the company is considering layoffs, or may be in financial jeopardy, they may begin to look for other employment. The employees who will most easily find other employment opportunities are probably the very people the company would like to retain. Additionally, if rumors of financial failure or other negative company performance indicators become common knowledge, competitors may take advantage by poaching talent & customers or by other means.

Realistically speaking, organizations can’t expect to put a complete stop to workplace gossip. But employers can take the following measures to minimize gossip and its negative effects:

  • Communicate Employees want to know what is going on within the company—how it is doing and what the future holds. In the absence of information provided by management, someone will fill the void with information that may or may not be accurate. Fill the void by communicating. The gossip mill will be in full gear if questions arise and employees are unable to approach management for information.  By quickly revealing decisions, such as office relocation, promotions, lay-offs, etc., you can allay some of the anxiety that helps to fuel the rumors and gossip.
  • Confront Rumors Organizations should deal with rumors promptly, particularly when they involve individual employees and personal topics. You should be direct but tactful talking to employees involved, individually and in a group. It is very important to listen to both sides, set up one-on-one meetings between the injured party and anyone involved in spreading the rumor, and schedule follow-up meetings for everyone who might have been involved. Employees who are spreading rumors should be warned that their behavior is not acceptable and may lead to termination.
  • Develop Policies While developing a specific policy pertaining to rumors and gossip is not practical, companies are wise to develop broad ethics, company values, and professionalism policies. These types of policies should outline appropriate behavior and actions at work.

    Additionally, the company should have an electronic communications policy that prohibits the sending of messages that may be considered harassing or otherwise inappropriate.

    Finally, the company should have a policy that prohibits all employees from communicating any confidential information regarding the company to any third party in any form, including electronic communications.

One very important cautionary note – It is considered an unfair labor practice for an employer to prevent employees from discussing the terms and conditions of their employment, which includes compensation and who may be affected by an impending layoff. If the employer does tell employees that they may not discuss these issues among themselves, they would be subject to action by the National Labor Relations Board. That action may include being required to post notices informing employees that they in fact have the right to hold these discussions.

By fostering a work environment that encourages honesty and open communications, you can often avoid the undermining and negative behaviors that can result from gossip and rumors. It is essential for companies to set appropriate boundaries and a tone of mutual respect.


This content was developed for the PHCC Educational Foundation by TPO, Inc. ( Please consult your HR professional or attorney for further advice, as laws may differ in each state. Laws continue to evolve; the information presented is as of July 2012. Any omission or inclusion of incorrect data is unintentional. Please note this article is not intended to provide legal advice or to substitute for supervisor employment law training.

The PHCC Educational Foundation, a partnership of contractors, manufacturers and wholesalers was founded in 1987 to serve the plumbing-heating-cooling industry by preparing contractors and their employees to meet the challenges of a constantly changing marketplace. If you found this article helpful, please consider supporting the Foundation by making a contribution at

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