This study examined the effects of inaccurate rules on generation of rumor among participants and their productivity in an organizational analog setting. Dyads of participants were given an explicit rule that described a contingency (i.e., number of points earned for correct responses). Experiments 1 and 2 utilized quasirandom and counterbalanced alternating treatments designs, respectively, in which conditions alternated such that participants were exposed to the rule-stated contingency (accurate condition) or a variation of the contingency that was stated in the rule (i.e., different number of points awarded, inaccurate conditions). Results indicate that exposure to inaccurate rules increases frequency and duration of rumor behavior. Participants exposed to alternating rules and only inaccurate rules exhibit lower correct responding on work tasks relative to those exposed to only accurate rules. (Contains 6 figures and 2 tables.)