Supervisors regularly make disciplinary decisions in organizations, and some of them may choose to act leniently by reducing or removing prescribed punishments for employees who have committed misconduct. Drawing on theories of motive attribution and the moral psychology literature, we explore how third-party employees attribute different motives to supervisor leniency towards a coworker and develop moral evaluations of such leniency, which further influence their downstream reactions to the supervisor. Study 1 applies content analysis to micro-narratives collected from U.S. working professionals and identifies altruistic and instrumental motives as the two main motives employees attribute to their supervisor’s leniency towards a coworker. Study 2 employs an experimental design and demonstrates the effects of attributed motives on supervisor-directed behavioral reactions (i.e., organizational citizenship behavior and gossip) through employees’ moral evaluation of supervisor leniency. Additionally, based on gender role congruity theory, we further propose that third-party employees’ reactions to supervisor leniency are contingent on supervisor gender in actual leniency events at work. Using event-contingent survey data, Study 3 provides large support for this prediction, along with further evidence for our full research model. Our findings enhance the understanding of workplace leniency and offer practical insights for managers when making disciplinary decisions.