In the not too distant past, most employers adopted policies forbidding workplace relationships on the premise that such relationships were — intrinsically — inappropriate and against the employer’s interest. The evolving workplace, however, has led to an evolving view on the acceptability of interoffice romances. This shift in viewpoint has coincided with many employers’ electing to drop their anti-dating policies in their entirety. However, recent case law, particularly Miller v. Department of Corrections [fn1], illustrates that this approach, while appearing more employee-friendly, increases the risks for employers and can set the stage for employee discontent.

In Miller, the California Supreme Court dealt with a particularly egregious set of facts in which female paramours (yes, plural) of a Department of Corrections’ manager were permitted to harass and bully other female employees who were not in relationships with the manager. Although state and federal courts had long held that isolated acts of favoritism toward sexual intimates do not constitute sexual harassment on the theory that both men and women are equally disadvantaged by the relationships, the court here found that the conduct was so widespread that it conveyed the message that the only way to succeed and prosper in the environment was to engage in a sexual relationship with the manager.[fn2] This case, thus, affirms that while not all relationships in the workplace subject the employer to risk, there is sufficient reason in terms of liability to continue to monitor workplace relationships and, in certain instances, to outright ban particular types of workplace liaisons.

This article briefly describes how the perception of dating in the workplace has evolved and offers effective steps employers can take to minimize the risks associated with office romances without necessarily banning all office relationships.

The Workplace as the Meeting Ground

In a 2005 survey, 58% of respondents admitted to a workplace romance, up from 47% just two years ago in 2003.[fn3]  Whether you are a sociologist or a casual observer, it is not too difficult to imagine the source of this upward trend. As employees spend more and more of their waking hours at work, the prospect of finding mates outside the workplace grows slimmer. Late nights at the office or at office-related events have replaced outings to singles bars and other traditional social activities. Consequently, the number of office romances has blossomed.

Linked with this blossoming of romance is a growing sentiment among employees and employers that wholesale anti-dating policies are draconian and intrusive.[fn4] This change in sentiment is supported by both a growing acceptance of the inevitability of office romances and growing evidence (anecdotal and scientific) that such relationships are not always disruptive in the workplace. Several recent studies have shown that office romances among peers can have a positive impact on work performance either because employees are channeling romantic energy into their work tasks or because they are more enthusiastic about spending long hours at work.[fn5] 

Given this emerging view of workplace relationships, employers often feel that to be competitive in recruiting, and supportive of their existing employees, generic, all-purpose anti-dating policies must be reviewed and potentially modified. These employers must then decide what policies, if any, to adopt in their stead.

Recommended Approach to Employee Relationships

While it may be tempting to abandon one’s anti-dating policy in its entirety, as Miller illustrates, there are some relationships that continue to pose substantial productivity and liability issues in the workplace. Chief among these are (i) relationships between supervisors and subordinates; (ii) otherwise consensual relationships that have gone sour; and (iii) relationships wherein the participants are engaging in inappropriate conduct in the workplace. Thus, employers of all sizes should consider retaining policies which address the perils of these sorts of relationships, while permitting more innocuous relationships to run their natural course.

Supervisor/Subordinate

Employers should continue to be concerned about relationships between supervisors and their direct and indirect subordinates. Such relationships have long been shown to reduce morale and sow discord among employees. Now more recently, these relationships can subject employers to sexual harassment liability based on favoritism.[fn6] Where a manager makes a practice of extending workplace favors or perks to his or her paramour(s), it suggests to other employees that the only way to succeed in the workplace is through a sexual relationship. In this instance, the manager in question need not ever make an unwelcomed advance or engage in otherwise harassing behavior, so long as his or her favoritism toward the paramour(s) is widespread.

The supervisor/subordinate relationship, therefore, poses two interconnected challenges: it must be monitored to avoid even the appearance of favoritism and, to be monitored, it must be known of in advance. Because both monitoring such relationships and requiring employees to report them can be awkward and difficult to implement/enforce, employers are encouraged to adopt policies banning such relationships in their entirety. However, for those employers wishing to take a more lenient approach (and willing to take on the burden of monitoring the relationships), policies can be adopted that require the supervisor — under threat of discipline — to report the relationship and that offer ways to accommodate the relationship, if possible.

Employers choosing the first approach, i.e., banning the relationships outright, should adopt a bright-line policy forbidding relationships between managers and supervisors and those they supervise. To avoid confusion, such a policy should be short and direct, such as:

In order to promote the efficient operation of the Company’s business and to avoid misunderstandings, complaints of favoritism, other problems of supervision, security, and morale, and possible claims of sexual harassment, managers and supervisors are forbidden to date, or pursue romantic or sexual relationships with, employees whom they supervise, directly or indirectly. Employees who violate this guideline will be subject to discipline, up to and including termination of employment.

Employers seeking to take a more employee-friendly approach and willing to invest the energy needed to track and monitor such relationships should adopt a policy requiring employees to report supervisor/subordinate relationships. Such a policy should address two issues: reporting the relationship and taking steps to reduce the appearance of favoritism. For example, a suitable policy would provide:

It is not the Company’s intent or desire to regulate personal relationships between employees outside the workplace. However, the Company is committed to ensuring that personal relationships do not adversely affect the work environment by creating a conflict of interest, by disrupting our business, or by creating a liability for the Company and its personnel. The Company does not allow employees who are in a personal relationship to be in a direct or indirect supervisorial/subordinate relationship at work.

Supervisory employees must notify the Human Resources Director if they enter into a spousal relationship or other intimate relationship with another employee. (Spouse is defined as spouse, domestic partner, or significant other.) Failure to do so will result in discipline, up to and including termination.

Where spouses or other co-workers in a personal relationship are also in a supervisorial/subordinate relationship, the Company will attempt to reassign one of the individuals. In some cases, the Company may determine that reassignment is either impracticable or unlikely to eliminate the supervisorial/subordinate relationship. If so, the Company will discuss options with the individuals, including the possibility of one individual leaving the Company.

Employers wishing to be abundantly cautious might, in addition to requiring reporting, mandate that these employees sign a "love contract" which certifies that the employees are in a consensual relationship and reminds them that they are required to behave professionally at work or wherever they are representing the employer. While these contracts have been touted as a savior to employers should a harassment suit be brought, this may not always be the case. Such a contract would, of course, be useful evidence in defending a sexual harassment suit where the manager is accused of forcing the subordinate into the relationship, but would likely be vulnerable to the same claims of coercion. An employee susceptible to being pressured into a romantic liaison would clearly also be susceptible to being pressured into signing the contract.

Consensual Relationships Gone Sour

Even where employers have chosen to permit peer relationships in the office or supervisor/subordinate relationships where a direct or indirect reporting relationship is absent, employers should take steps to address the impact of consensual relationships gone sour. In such instances, the office romance does not pose a threat to the employer’s interest until it fizzles, at which point one of the participants may refuse to accept the demise of the relationship. This refusal can take many forms and typically manifests itself as unwanted behavior at work. For example, a rejected suitor may continue to approach the object of affection for reconciliation, and/or send gifts, cards,  or flowers; or the suitor may engage in more intimidating behavior, such as stalking the employee. Regardless of the type of behavior, such conduct can subject the employer to liability for a hostile work environment if the conduct occurs at the workplace and is severe and pervasive enough to prevent the complaining employee from performing his or her job.

This potential liability has caused many employers to ban all relationships in order to prevent issues with the small percentage of them that may result in such conduct. However, a total ban is not necessarily needed to combat this issue. Concerns raised by relationships gone sour can be addressed effectively in sexual harassment policies and training. For example, employees should be advised, in the employer’s policy or training materials, that attempting to continue a relationship when the other participant has ended it will constitute unwelcomed sexual conduct under the sexual harassment policy and will subject the employee to discipline, up to and including termination. Additionally, employees should be advised that such conduct should be reported immediately pursuant to the employer’s sexual harassment complaint policy and that such complaints will be promptly investigated and acted upon. By addressing this issue in the employer’s policy and training materials, the employer can minimize the risks involved in such situations without going to the extreme of prohibiting nonthreatening relationships

Inappropriate Behavior at the Workplace

All employers, regardless of whether they elect to adopt a policy banning certain types of workplace relationships, should adopt an all- purpose policy prohibiting personal relationships of any kind that impact on the employer’s operations or its best interests. For example:

Should the Company become aware of or have reason to believe that employees’ personal relationships are impacting the work environment, the Company will meet with the individuals to advise them of their professional responsibilities and the issues and responsibilities that may arise when individuals in a spousal or other intimate relationship are also co-workers. Irresponsible behavior in a personal relationship that is disruptive of the workplace, that is contrary to the Company’s interest, or that may create legal liability for the Company or its employees, may result in disciplinary action, up to and including termination of employment.

Conclusion

By focusing on relationships with the potential to impede the employers’ interests, employers can draft workplace dating policies that meet the employers’ objectives without unnecessary intrusion into employees’ personal lives.

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Footnotes:

1:  36 Cal. 4th 446 (2005).

2:  For more information on the Miller decision, see the August 2005 Employment Law Commentary at http://www.mofo.com/news/updates/bulletins/bulletin02030.html. 

3:  See Vault Office Romance Surveys (conducted each year in time for Valentine’s Day) for 2005 and 2003.

4:  In California, this evolving view has been helped along by a general misimpression that Labor Code section 96(k) prevents employers from disciplining employees for office romances. (Section 96(k) purports to prevent employers from taking adverse employment actions, such as demotion, suspension, or discharge, on the basis of otherwise lawful conduct (such as dating) occurring during nonworking hours away from the employer’s premises.)  This reading of section 96(k), however, has been rejected by California courts. Barbee v. Household Automotive Finance Corp., 113 Cal. App. 4th 525 (2003) (holding that termination of employee for violating anti-dating policy was lawful and did not violate any public policy established by section 96(k)).

5:  These studies also show that employers and employees continue to be skeptical of relationships between bosses and subordinates and that such relationships tend to erode morale.

6:  See, e.g., Millerv.Department of Corrections, 36 Cal. 4th 446 (2005) (rejecting the rulings of the lower courts and holding employer liable for sexual harassment where the four paramours of the manager were permitted free reign over the workplace, including subjecting other employees, not in a relationship with the manager, to harassment). For more information on the Miller decision, see the August 2005 Employment Law Commentary at http://www.mofo.com/news/updates/bulletins/bulletin02030.html.

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IRS and FTB Clear Way for Vacation Pay Donations for Victims of Hurricane Katrina

By Kathryn M. Davis

Both the Internal Revenue Service (IRS) and the California Franchise Tax Board (FTB) have announced programs to encourage additional contributions to support victims of last month’s Hurricane Katrina.

Under the IRS program (see Notice 2005-68 [http://www.irs.gov/newsroom/article/0,,id=147373,00.html]), employees may donate their accrued, unused vacation, sick, or personal leave time in exchange for their employer’s cash payments made to qualified tax-exempt organizations providing relief for the victims of Hurricane Katrina. If the exchange and cash payment is made before January 1, 2007, the employee’s leave time donation will not be counted as income or wages to the employee and therefore will not be subject to withholding or income tax. Additionally, employers adopting a qualified program for donations will be permitted to deduct the amount of the cash payments on their federal tax filings.

California’s FTB quickly adopted an identical program extending the benefits of the relief program to California employees and employers with respect to their state income tax and tax filings. (See FTB Press Release http://www.ftb.ca.gov/aboutFTB/press/2005/05_51.html [link not working 6/19/07].)

Employers adopting such donation programs should take care to document any donation request by an employee (including the employee’s signature) to avoid any confusion or later dispute related to future leave time entitlements or payouts upon termination.

 

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Morrison & Foerster Labor Briefings
Layoffs: A 12-Step Program for Getting Through Down(sizing) Times

While the worst may be over (we hope), layoffs continue to be one of the most challenging aspects of a human resource professional’s job. Whether emanating from outsourcing, a merger, or an acquisition, or simply from a shift in corporate structure or cost-cutting – or any combination thereof – the elimination of positions and separation of employees means the same thing from a human resource perspective: layoffs. The specter of layoffs, especially mass layoffs, can be daunting.  Tension is in the air, uncertainty reigns, morale is in jeopardy, and the threat of legal claims looms. With adequate forethought and planning, however, the challenges presented by layoffs are surmountable.

Morrison & Foerster LLP will host a series of briefings focusing on handling layoffs that result from outsourcing and M&A transactions. The program will provide practical steps for any company to take when faced with layoffs.

Morrison & Foerster LLP (Provider #2183) certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 1.5 hours. This invitation is transferable and open to colleagues and guests. There is no charge to attend this briefing.

San Francisco
October 25, 2005

Four Seasons Hotel
757 Market Street
San Francisco, California

Registration:  8:00 am – 8:30 am
Program:       8:30 am – 10:00 am

Breakfast briefing with Judith Droz Keyes

Los Angeles
October 26, 2005

Morrison & Foerster LLP
555 West Fifth Street, 34th Floor
Los Angeles, California

Registration:  8:00 am – 8:30 am
Program:       8:30 am – 10:00 am

Breakfast briefing with Janie Schulman

San Diego
November 10, 2005

Morrison & Foerster LLP
12531 High Bluff Drive, Suite 100
San Diego, California

Registration:  7:30 am – 8:00 am
Program:       8:00 am – 9:30 am

Breakfast briefing with Richard Bergstrom