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I personally think that the managers should have a right to take disciplinary action, but only after issuing a warning.
The office is not unlike public schools. If bra-less breasts are prominently on display, it's a distraction to coworkers (or classmates) and inhibits the ability to get work done (or learn). Not to mention, it's begging for a male employee to make just ONE sexist remark before a lawsuit raises corporate hell. I'd do the same thing if a male coworker came in wearing spandex pants with his junk hanging out for the world to see. Wool sweater or not, it was obviously visible enough to be correctly identified and commented on by the manager, meaning it was still inappropriate.
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Living in the United Socialist States of America.
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