¶ … AIDS in the Workplace," discuss the following: What are the moral issues in this case?

The first moral obligation Carla has is to the law: it is illegal to discriminate against someone because they have an illness, if that illness does not substantially affect the employee's job performance. In this case, there is no concrete evidence that Tom's rumored illness has affected his abilities as a worker. The second moral obligation Carla has is to the truth. The evidence of Tom having AIDS is based upon second-hand testimony from his ex-wife, and Carla only convinced herself that Tom may have seemed thinner after hearing Frances' comments. Tom's illness does not seem as bad, objectively, as Carla's fears suggest. Carla also has a moral obligation to honor Tom's loyal service and evident qualifications for a promotion.

What ideals, obligations, and consequences must Carla Lombard consider?

Carla Lombard must consider the ideal that all individuals should be treated fairly, regardless of whether they are sick are well. So long as someone's illness is not a danger to others, they should not be discriminated against and turned into a social pariah. Carla has an obligation to Tom as her employee. She must also be aware of the consequences that her business could suffer if she was found to have engaged in illegal, discriminatory practices.

However, some might say that Carla has an obligation to ensure that the business functions...

This might be said to include only employing people who can perform to a high standard. If Tom is given a position of leadership and fails, this does not only hurt Carla. It hurts the entire business, and all of the employees whose livelihoods depend on that business.
Finally, some might state that Carla as an obligation to the truth to talk to Tom, because Tom has a right to discuss his illness with Carla. But conversely, Carla also has an obligation of confidentiality to Frances.

What rights, if any, are at stake?

Tom has a right to be treated fairly and not condemned, based upon a rumor. Even if he does have AIDS, he also has a right to be employed in a position, so long as he has shown that he can fulfill his duties.

Will it make a difference whether Carla adopts a Kantian approach or a utilitarian approach to this situation?

It will make a great deal of difference. A Kantian approach suggests that Carla must follow her duties and moral obligations, and act as if she is setting a moral precedent for all time with her actions. The precedent Carla must set is clearly one of non-discrimination against a good employee. She must anti-discrimination law. A utilitarian approach would suggest that paying Tom but not requiring him to come to work would sweep the matter under the table, and avoid any possible controversy that would arise, if Tom's illness was exposed. In this approach, although…