The female staffer who shared her dream insisted to the administration that the conversation was in no way intended to harass nor were we aware that the third party was even listening. If this is written up my reputation will be smeared. Please advise if you can. AND the employer knows or should know about it but doesn't take remedial action. The intent of the harasser doesn't count.
Harassment is viewed from the shoes of the person who saw it, heard it, felt it.
Third parties, like people who overhear conversations in a lunchroom, have every right to file a complaint about what they saw or heard. It sounds like your company is doing the right thing by investigating. A fair investigation includes letting you tell your side of the story. Based on what you've told us, this seems like an extremely minor incident which should not damage an otherwise-good record. For more information, see our checklist for your rights as an accused harasser .