If you denied it and it was true, then shame on you. And that doesn't bode well for your future.
I disagree that a past employer will not mention this issue (sex on the job, lying about it) for fear of a defamation charge. As has been mentioned, it's not defamation if it's true.
If you are in a market where new grad nurses are a dime a dozen or even in adequate supply, your application will be the first to be tossed out. Under that circumstance, employers look for any reason to thin the herd (weed out the apps).