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What would you choose & why?

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What would you choose & why?

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If you say hearsay, how are you hearing about it? Someone must be saying something. If so, encourage a formal complaint. Investigate it and report it.
Have you tried talking to either the manager or the coworker? Say you’ve been hearing some things and you want to refresh them on the companies bullying or professional policy.
Hearsay requires investigation. I hope you know that. If these were allegations of illegal harassment in the "hearsay," you'd be investigating, right?
Look into it. You've heard about it, so you have an obligation to look into it. The "bullying" could be based on the victims' status in a protected class, after all.