Favoritism or Discrimination? Quirky Question # 149

Quirky Question # 149:

A female employee of our company filed a Charge with the EEOC that she has been discriminated against because one of our executives is involved in a relationship with a subordinate female employee.  Our employee argues that this person is receiving preferential treatment and that she is being deprived of opportunities as a result.  She claims that this is gender discrimination in violation of Title VII.  We have confirmed that the executive is involved in a relationship with the other female employee.  But, we do not understand how this could constitute a violation of Title VII.

Dorsey’s Analysis:

Your perplexity is justified. Most courts that have examined this issue agree with your observation that this type of “favoritism” does not violate Title VII. In our view, the issue is easier when the complaining employee is the same gender as the employee allegedly receiving preferential treatment. (At the end of this analysis, we’ll entertain the idea of whether a male employee could assert a claim of discrimination based upon his boss’s romantic relationship(s) with one or more female employees, assuming they were accompanied by some tangible employment benefit for which he otherwise might have been eligible.)

Before turning to the specifics of your question, let’s address generally the questions that can arise when there is a relationship between an executive and one of the executive’s subordinate employees. Since your fact pattern described a male executive and a female subordinate, we will use that gender alignment for this discussion. Of course, the same issues could be implicated if the executive was a woman and the subordinate was a man. Ditto with respect to relationships among individuals of the same gender.

The first issue you need to consider is whether the relationship between your executive and his subordinate is “welcome”. As you likely know, this should not be confused with “consensual”. As the U.S. Supreme Court made clear in the first sexual harassment case to reach the high court in 1986, Meritor Savings Bank vs. Vinson, even a “consensual” relationship can constitute a violation of Title VII if it is not “welcome”. As the Supreme Court pointed out in that case, there was substantial evidence that the sexual relationship between the executive and his female subordinate was not “welcome” even though the two individuals had had sexual relations on multiple occasions over a protracted period. Thus, now that you know there is a relationship between these two employees, you need to assure yourself (and the company) that the relationship truly is welcome.

Let’s assume that the relationship is being enthusiastically pursued by both members of the couple. This leads to the second issue you may need to monitor. What will happen if one member of the couple wants to end the relationship? This problem could be exacerbated if the subordinate female employee wants to end the relationship and the male executive wants to continue the relationship. Will he penalize her in any way? Will he retaliate against her for ending the relationship? Will he simply start treating her negatively? Or, will he pressure her, either through threats or promises of benefits, to continue in the relationship? You need to ensure that your female employee knows she has a reporting option if the relationship comes to an end and she feels the end of the relationship is adversely affecting her professionally. And though we suggested that the problem is exacerbated if the subordinate female employee is the one who ends the relationship, your company may not be in the clear even if the executive is the one who decides to terminate the relationship. In this context as well, there could be problems associated with the relationship’s end. For example, if the subordinate employee is not selected for a promotion or for a particular assignment, will she conclude that she missed out on those opportunities because her boss decided to end the relationship? Will the executive, either intentionally or unintentionally, treat her differently once the personal relationship between the two of them has ended? Will he try to minimize contact with her, perhaps with a corresponding loss of opportunity for her, even if his motivations are to reduce the tension between them?

A third issue that you may wish to monitor is the possibility that the executive becomes involved in serial relationships with subordinate female employees. As you can imagine, this behavior can be quite disruptive in the workplace. Even worse, there are a host of potential problems if the executive is involved with more than one person at a time, or if one member of the “couple” considers it more exclusive than the other. Needless to point out, these situations inject a variety of problems into the working environment that neither the company nor its Human Resource professionals should have to contend.

Yet a fourth question, close to the inquiry you posed, but nevertheless distinct, is what impact the relationship is having on others in the same business unit. Perhaps they are accepting of the relationship; perhaps not. (From the fact that one of your other female employees believes the relationship constitutes a Title VII violation, it would appear that the latter is true.) You need to understand that these types of relationships can have a corrosive effect on the work environment. Particularly where favoritism is involved, other employees can justifiably become resentful. If they feel they are being deprived of opportunities, or that a “less qualified” person is receiving certain opportunities or benefits, not because of merit but because of her relationship with the boss, this situation can be demoralizing. Of course, these observations hold true for spouses working for the same company, parent/child relationships, or other familial relationships. It is precisely because of the potential difficulties associated with these kinds of situations that some companies have adopted anti-nepotism policies or non-fraternization policies. (We previously have written on the subject of Non-Fraternization policies; use the “View By Topic” bar above to find the Index to past articles and scroll down to “Non-Fraternization”. See Quirky Question # 30.) These policies are not without their own problems, but they at least help minimize the risks of actual favoritism or perceptions of favoritism by other employees.

Of course, short of adopting an anti-nepotism policy or a non-fraternization policy, your company could simply adopt a policy whereby no employee will be permitted to supervise or evaluate a subordinate employee with whom he or she is involved.  We recognize, however, that one size does not fit all and for some companies the size of the enterprise will preclude the possibility of a transfer. Moreover, even in larger organizations, there are complicated issues that must be addressed, including questions regarding how to address a situation where the relationship develops after the policy has been adopted, how to respond to employees who attempt (perhaps justifiably to conceal the relationship), how to determine which employee should be transferred to another business unit, etc.

With some of these general principles in the background, let’s consider your specific question. Does it constitute a violation of Title VII for one of your executives to have a personal relationship with a subordinate female employee, even if this relationship results in “favored” treatment of that employee? Most likely, no. Could another female employee, who feels disadvantaged by the relationship and decisions stemming from the relationship bring a Title VII claim? As we have learned through many years of practice, employees can (and do) bring claims for a host of reasons, some legitimate and some not, and there is little an employer can do to stop it. Is your complaining employee likely to prevail or her Title VII favoritism claim? No.

By way of example, some of these issues were addressed last year in an analogous case decided by the Tenth Circuit Court of Appeals, Anderson v. Oklahoma State University Board of Regents, No. 08-6249 (August 17, 2009). Anderson, an employee of OSU, reported that his supervisor, Michael Hughes, was having an affair with a female employee of the University. Anderson complained that this affair led to the female employee receiving more favorable treatment than he and other employees who reported to Hughes received. OSU investigated and concluded that Hughes and the female employee “were not having an inappropriate relationship in the workplace.” (This observation by the court begs the question of whether Hughes and his subordinate female employee were having an “appropriate” relationship in the workplace.)

Anderson claimed that after he reported the affair, he was excluded from management meetings and other departmental activities. Three years after he reported the alleged affair, Anderson was terminated, ostensibly as part of a reduction in force. He sued, claiming that he was fired in retaliation for reporting his boss’s affair and that the RIF explanation was merely a pretext for his illegal discharge. The District Court, however, granted summary judgment, ruling that Anderson’s report of the affair did not amount to protected opposition to discrimination.

As the Tenth Circuit pointed out, it previously had held that “preferential treatment on the basis of a consensual romantic relationship between a supervisor and an employee is not gender-based discrimination.” Taken v. Okla. Corp. Comm’n, 125 F.3d 1366, 1370 (10th Cir. 1997). The court opined further, “Because the plaintiffs in Taken did not present any evidence that they were denied employment benefits because they refused sexual advances, were subjected to a hostile working environment, or otherwise were discriminated against because of their gender, their allegations that their supervisor selected his paramour/employee for promotion because of their romantic relationship did not state an actionable Title VII claim because the favoritism was based on a voluntary romantic relationship and not gender differences.”

Affirming the District Court’s dismissal of Plaintiff’s claims, the Tenth Circuit emphasized, “the dispositive issue here, as in Taken, is that the supervisor’s affair and related favoritism are not, without more, actionable under Title VII.” Although the court referenced one circuit’s inconsistent holding, it pointed out that the 2nd, 4th, 5th, 7th, 8th and 11th Circuits all have held that “favoritism” of an employee, based on a consensual romantic relationship, is not actionable under Title VII.

In short, the clear weight of federal judicial authority does not recognize the type of claim that your employee has asserted. (Note, however, that it is beyond the scope of this analysis to assess how state courts, interpreting their parallel state statutes, might assess this issue.) Your intuition that a welcome romantic relationship, even one accompanied by some favoritism, does not constitute a violation of Title VII, is consistent with most judicial opinions on this subject.

At the outset of this analysis, we suggested that, perhaps, an employee who is the same gender as the supervisor would have a more colorable claim of discrimination. Clearly, as the Anderson case illustrates, this would be an uphill battle at best. But, for example, hypothetically, a male employee making the claim of discriminatory treatment as a result of his male boss’s involvement with a subordinate female employee would have a more viable claim that he was being denied certain opportunities on the basis of gender (unless his boss was bi-sexual). The complaining male employee could argue that he would never be considered for a romantic relationship with his heterosexual male boss, and therefore, would never be eligible for the favored treatment enjoyed by his female colleague.

Perhaps this point can be illustrated by a less emotionally charged example emanating from the work environment. By way of analogy, if a male supervisor was an avid golfer but only took subordinate male employees golfing, and if those who golfed with the supervisor received preferential treatment with regard to benefits, promotions, work opportunities, etc., arguably a female subordinate excluded from the “golf group” would have a colorable Title VII claim. Now, let’s assume that there really was evidence that the male supervisor favored, in tangible ways, the female employee (or employees) with whom he had romantic relationships, even if they were welcomed. Would the male subordinate employees excluded from the “romantic partners group” have a colorable claim? Based on the judicial decisions in this area, the answer is likely no. But the claim may not be as farfetched as might first appear.

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