Protect Morale by Handling Rumors Effectively

Posted on Thursday, February 28, 2019

Rumors have shattered reputations, crushed careers and even forced companies out of business.

Can You Prohibit Employee Gossip?

Employees often chit chat around the water cooler, in their cubicles or in the warehouse. What's more, managers are often targets of mean-spirited diatribes and idle talk among the rank-and-file.

However, if you try to prohibit these conversations, you could run into legal trouble. Specifically, companies have been found to violate the National Labor Relations Act, whether or not the operation is unionized. Under the law, it is illegal to prohibit or punish employees for discussing issues such as work conditions, salary, benefits and promotions. In addition, such practices may violate state laws.

Whenever the destructive winds of rumor blow, upset and turmoil usually follow. Of course, rumors can be favorable too, but most are detrimental and may require management intervention.

Office buzz is hard to deal with, and the obvious remedy — finding the source and stopping the spread of rumor mongering — is often impossible. The target may be an employee, executive, a department or the entire organization. It's up to the people in charge to spot the danger and decide on suitable action.

Here are six tips on how to deal with rumors circulating through your office grapevine:

1. Decide Whether to Take Action. You need to remedy the situation when a rumor is costly in terms of dollars and morale. If the "news" damages your image, causes customers to cancel orders, makes your company vulnerable to legal action, harms reputations, or affects productivity, you need to act.

2. Recognize Different Rumors. Fear drives some rumors, such as those involving layoffs, bankruptcy and reorganization. Other rumors are based on fantasy or wishful thinking, such as a story about a huge holiday bonus. (When it doesn't materialize, employees can be bitterly disappointed.)

Unfortunately, some of the worst rumors are based on hate and involve character assassinations.

3. Dig Deep for the Truth. The rumor itself usually tells you where to start. For example, a rumor about a particular employee pinpoints him or her as the first one to question.

While questioning others, try to avoid spreading the rumor and limit conversations to people who already know.

4. Punish the Source. Go from link to link but don't be surprised if you come to a dead end. You may be pretty sure who the culprit is, but without proof, it's hard to mete out any punishment.

Unless, of course, the person confesses or the evidence is overwhelming. In that case, punishment should depend on the circumstances. If you plan to stop short of firing, lay it on the line that spreading rumors won't be tolerated.

5. Just the Facts. Facts are your strongest weapon. Convene the people involved and emphasize that your goal is to prevent damage and unfairness. Repeat the rumor and refute it by stating the facts.

6. Build a Culture of Trust. Studies show that rumors flourish in organizations that are devoid of news and information. Often if there is no news, people create it. So build your corporate culture around trust. Keep your group correctly informed about changes so they don't hear about them elsewhere, possibly with false information. 

Consult with your legal advisors to help ensure that in your efforts to deal with rumors you don't violate the law (see sidebar "Can You Prohibit Employee Gossip?").

Posted in Tax Topics For Individuals

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.