There have been some good discussions on this forum regarding gossip at:
http://community.blr.com/hr/forums/thread/2731.aspx http://community.blr.com/hr/forums/thread/890.aspx http://community.blr.com/hr/forums/thread/2434.aspx
I think the gist is that the employer should consider both (1) its policy regarding professionalism/conduct and (2) The topic matter/intrusion into privacy/impact on workplace morale, productivity, etc. If the gossip is impactful, the employer should consider enforcing any policy or practice it has regarding workplace conduct and professionalism. Management should not be immune from this, in fact they should be the standard bearers.