Ever since dating moved from colleges to singles bars and singles bars to the workplace, from the smallest company to the very largest, a question which arises with regularity is whether or not a company has the right to take action against employees who are dating or living together. A greater concern occurs when employees are supervisor and subordinate in the same department.
Almost 25 years ago, I wrote a personnel policy which stated that, while the company was willing to hire relatives, related employees could not work in the same department if there was a direct or indirect reporting relationship. Even today that policy is legal, but extremely difficult to maintain in the smallest companies especially, of course, when the owners themselves are related. Even the most positive forms of nepotism contradict the rule.
However, that practice had to do with related employees. What about employees who are just dating? What about a supervisor and subordinate living together? Perhaps most significant, what about an employee dating a person working for a competitor? Is it an invasion of privacy to ask the employees to stop the relationship? In a "romantic" sense it is, and in a practical sense larger companies have the option of moving employees to other departments. But what about the legitimate concerns of the employer, such as conflicts of interest? Is the right to privacy, guaranteed by the United States Constitution, always contrary to a company's right to protect its interests?
Unfortunately, some conflicts are in the mind of the employer; some are quite real. In the past six months I have been asked perhaps as many as two dozen times what could be done with employees under these circumstances. Invariably, the employees already know about the most famous court case involving similar circumstances, Virginia Rulon-Miller v. International Business Machines, a 1984 California Superior Court case, known simply as "Rulon-Miller." Succinctly, Ms. Rulon-Miller was in an management position with IBM and had a relationship with an account manager of an IBM competitor. Ms. Rulon-Miller's manager told her that the "dating constituted a conflict of interest," and that she was terminated for not breaking off the relationship, brought suit against IBM, and won her case.
While IBM had a code of conduct policy, it was somewhat vague in defining a conflict of interest. Because of its lack of clarity, one question which arose in the case was whether or not it could be applied uniformly by supervisors and managers. Two basic questions were whether or not a supervisor had the right to inquire into the purely personal life of an employee, and whether or not the supervisor's own values would color the way in which he or she define the conflict of interest.
There were several factors to be considered under the court's special instructions: "(1) whether or not the employee was discharged for legitimate business and employment reasons; (2) whether or not the employee was discharged...for a false reason or motive put forth to hide the real one; (3) whether or not the employee was engaged in a sensitive or confidential management position; (4) whether or not the employee had a conflict of interest; (5) whether or not the employee's personal, private or social relationships endangered, injured or jeopardized the employer's legitimate business interests; (6) whether or not the employer violated, invaded or infringed upon the employee's personal privacy and personal, private and social relationships; and (7) whether or not the employee was discriminated against by the employer because of the employee's sex..."
In 1991, the two factors which I emphasized (above) are those which have most often played a part in my advising clients when this time or situation arose. Further, I believe they were distinctly related and relevant to almost every case. Most senior managers in a company are in "sensitive or confidential" positions, but there is a matter of degree involved. A Personnel or HR Manager, for example, is privy to compensation figures as well as other sensitive (personal) information. If such a manager were to impart confidential information to any other person, and such information was injurious to the company, then the company probably has a right to take action against the manager. A sales manager who has complete knowledge of pricing policies tells a competitor, then it can be assumed that the company's sales position was jeopardized. The same sales manager gives to a competitor a client list. The company has been injured. In the cases of the sales manager, there is clearly a conflict of interest as well, regardless of intent or lack of intent.
While trade secrets agreements have been difficult to enforce in court, the concept is well established in states with labor codes. That which is developed on company time belongs to the company. Excluding general knowledge attained on the job, that which an employee learns about a company's product or services belongs to the company. When an employee has a relationship with a competitor, and information about the principal employer is passed on, there is a conflict of interest and probably cause for action including dismissal. Disseminating information regarding products, services, or pricing to a competitor damages and injures the employer.
Disseminating confidential information about an employee may also be injurious to the employer. In such circumstances, it may be said that spreading rumors about another employee has invaded the privacy of that employee, to say nothing of the possibility of defamation of character lawsuits. There are times, in fact, when stopping the spread of rumors has been more costly than stopping the flow of information about products and services.
Can you dismiss an employee under these circumstances? I think so, but there must be consistency in application. Can an employer stop two employees from dating? An employee and a competitor's employee? Not on whim or speculation. Is there an invasion of privacy? I think not. In fact, it may well be the employer's "privacy" which has been invaded.
One must take extreme care in what I call "face value" ingredients, being certain that your own values do not influence your judgment. Do not jump to conclusions. Your perceptions, as opposed to direct observations, may be wrong. Remember the story of the scientist who taught a cockroach to jump over his finger? When he removed the roach's two front feet, it still managed to jump on command. When he removed the two middle legs, the cockroach struggled, but jumped. When the scientist removed the two hind legs, the scientist said, "Jump!," but the cockroach lay helpless. In his journal the scientist noted, "When a cockroach loses all six legs, he becomes deaf."
It is now 1996, and the situation has changed. The workplace has certainly changed although I think that work must still be done. The workforce has changed, and perhaps even the relationships between men and women have change. One no longer goes to college to find a husband or wife (well, that is where most relationships started in the 60's and 70's); relationships often begin at work. Society has changed. The concerns have changed, too: employers aren't as anxious about conflicts of interest or trade secrets as they are about claims of favoritism, hostile work environments, and sexual harassment ... and even workplace violence.
When two employees are dating or married and work in the same location, and one receives a promotion or a merited salary increase, cries of favoritism abound. Rumors spread and it is not uncommon for a fractionalizing of a department or entire company to take place. Some employees will say, "It's none of their business what we do in our private lives!" That it is none of their business has been upheld by the New York State Supreme Court.
But, when the private lives of individuals affect the working relationships at work, it is the legitimate concern of the employer. It may be a matter of morale, but matters of morale usually affect productivity, and so on ad infinitum.
The worse case scenario and one that happens much more frequently is when the relationship dissolves into a feud or outright physical violence. Of all the questions I've received, it is the breakup of a relationship (including marriage) that tears an organization apart. In one such case, the woman claimed that her ex-boyfriend was harassing her; in another, that the man was stalking the employee, and leaving threatening notes on her desk. It is not always the woman who claims harassment, either. Several times, men have broken off relationships only to have the woman make their personal and work lives "a living hell" (to quote one claimant). Professionally, I have seen three cases of companies (not the employee) having to obtain injunctions against the terminated "partner" in a relationship.
At that point, should the company take action? Emphatically yes! Often such situations should be handled the same way that claims of sexual harassment are investigated. (The policy is included and fully explained in my book, "Labor Pains.") Sometimes both employees may have to be terminated. More often than not, it is usually the one in a supervisory position...a fact which often leaves a gap in management depth. But had the supervisor or manager had the foresight, she or he would have seen the problems that could ensue from such a relationship. Love is blind, but other employees aren't.
It remains a fine line or a tightrope which companies must walk, but when the first signs of trouble occur or are brought to management's attention, management must take some corrective action, even it is just communicating to the two individuals that this might lead to disciplinary action if others and work in general are affected by the relationship.
What about a policy of not hiring relatives? I still suggest the inclusion of such a policy in an employee handbook, a policy which would only affect all new employees. What about a policy of "no dating" or "nonfraternization" between two employees or supervisor and subordinate? No. However, as soon as a supervisor and subordinate begin a "relationship," a senior manager should talk with the supervisor and warn him or her as to the "dangers" there are in such relationships, and the possible effect such dating could have on other employees. You might even suggest that one or the other or both look for jobs elsewhere and assist them in their search. Be careful: since most relationships (as of this writing) are between a male supervisor and a female subordinate, and supervisors are harder to replace, if you continuously ask the woman to leave in such circumstances, you may (legitimately) face sex discrimination claims.
When can the employee(s) be terminated? As soon as your corporate attorney tells you that you can with relative impunity.