Policies to quash such chatter, including job termination, may boost morale and the bottom line.
Reporter Marilyn Gardner discusses gossip and productivity.

Just a year ago, the atmosphere in Sam Chapman's small public relations firm was often tense.

"We had information leaks, we had disgruntledness, we had competitors finding things out, and we had sniping about senior management policies," says Mr. Chapman, CEO of Empower Public Relations in Chicago. "People would stop talking when you walked by."

A life coach identified the problem: gossip. Determined to elevate the tone, Chapman took dramatic steps. He fired three employees for gossiping. He also established a strict policy, turning the whole office into a no-gossip zone.

In workplaces everywhere, gossip remains a daily fact of life. Around water coolers, behind closed doors, and in e-mails, employees whisper about everything from office romances to rumored mergers and layoffs. Defenders insist that this chatter is often harmless, giving workers a window on legitimate news. Critics charge that it can be insidious and malicious, lowering morale.

"Gossip can be a problem if unaddressed, or it can play a useful role," says Dennis Reina, author of "Trust and Betrayal in the Workplace." "It can be a beacon in letting leaders know that there are issues that need to be dealt with in appropriate, constructive ways."

Chapman defines gossip as "negative communications outside the presence of the subject of the communication." Calling it "a productivity killer," he adds, "It hurts the gossiper and the gossipee. Gossipers are wrecking their own reputation by talking about others. Gossipees are hurt because they're being maligned."

To quash such talk, Chapman devised a policy for his staff of 17: "If I hear you gossiping about somebody, we send you back to the person about whom you were gossiping and you tell what you said. That dispels all the false information."

He is not the only employer to fire people for allegedly gossiping. A year ago, four town employees in Hooksett, N.H., were dismissed for spreading rumors about a town official. The women denied the charges, and last month two of them settled lawsuits against the town.

Yet punishing workplace gossip is not the answer, some employment experts argue. Creating ways to deter it is.

"Gossip is a fixable offense, not a fireable offense," says Rachelle Canter, author of "Make the Right Career Move." "Firing someone for gossiping is an extreme measure and one that won't eliminate gossip but rather send it further underground, where it can do more harm."

In spite of its negative connotations, gossip can play an important role in policing behavior, notes David Sloan Wilson, a biology professor at Binghamton University in New York.

"Gossip is often highly moralistic and functions as a social control system," he says. "The first thing that happens when there's a social transgression is gossip. Often it's the only thing that needs to happen. We can use it to punish transgressions by social exclusion and shunning."

If employees are happy, they will tend to use gossip for benign purposes, Professor Wilson adds. "But if they perceive management as the enemy, they will gossip for their own interest. That will not be in the interest of management. The solution is not to end gossip but to make the company more equitable."

Yet Chapman defends his no-gossip policy, noting that the culture in his gossip-free office has changed markedly. Business has doubled in a year, he says. He is writing a book, "The No-Gossip Zone." He's even fielding calls from those in other professions. "I've had a lot of ministers reach out to me, trying to deal with gossip inside their congregations."

Calling gossip "an explosion of bad work energy," he says, "Think about the positive energy you replace it with."

Employers who identify gossiping as grounds for discipline and termination need to notify employees in advance, preferably in writing, says Craig Annunziata, managing partner of Fisher & Phillips, an employment law firm in Chicago.

Despite efforts to stop rumors, situations may still arise where termination is the only resolution.

"If gossip runs counter to your company values or creates a legal liability, you've got to act on that," says Bruce Clarke, president of Capital Associated Industries, a nonprofit employers association in Raleigh, N.C. "If one employee is defaming another and you don't take action to change the false story, in most states there's a potential claim."

Yet even Chapman makes exceptions for some forms of gossip. He emphasizes that his no-gossip policy applies only to interactions with colleagues and clients. "It's OK to talk about public figures," he says. "We still gossip about Britney Spears and Eliot Spitzer."