Non-Fraternization Policies, Quirky Question # 30

Quirky Question # 30:

We are a large, national, medical device company.  Over the years, we’ve adopted personnel policies to provide appropriate guidance to our workforce and to comply with federal and state laws.  We have a well defined and clear sexual harassment policy.  Notwithstanding our sexual harassment policy, we find that we periodically confront workplace problems associated with relationships among co-workers that fall apart.  (We’ve had this happen with married couples going through a divorce, as well as couples who were just dating.)  These situations are exasperating.  Consequently, our company is considering adopting a broad “Non-Fraternization” policy, prohibiting relationships between employees.  Is this a good idea or will we be plagued with enforcement problems?

Dorsey’s Analysis:

As a preliminary observation, it is important to recognize that non-fraternization policies are legitimate and enforceable.Many companies use them because they advance significant corporate interests.

A) The policies minimize favoritism, especially in the context where one employee may have supervisory responsibilities over another person with whom he/she is involved.

B) Non-fraternization policies minimize the perception of favoritism. Even if a member of a relationship is attempting scrupulously to be fair and objective, other employees may perceive favoritism toward the individual with whom he/she is involved.

C) The policies reduce the likelihood that the company will confront sexual harassment litigation if the relationship between two emotionally involved employees ends, especially when both members of the couple are not equally enthused about the termination of the relationship.

D) Non-fraternization policies enhance the company’s flexibility with respect to employment decisions that may result in the transfer of the employees; it is much harder to find suitable employment opportunities for two members of a couple, than just one person.

E) Non-fraternization policies reduce the likelihood that there will be undesired consequences for the company if adverse actions are taken toward an employee involved with a co-worker.Negative job actions are difficult enough without the added complication of evaluating how the other employee member of the couple will react to a layoff or demotion of a spouse or significant other.

For these and other reasons, many companies ban the hiring of spouses or significant others. Some companies do not adopt an absolute ban but do preclude individuals who are married or otherwise involved from working in the same department or exercising supervisory responsibility over each other.

Unfortunately, too often companies adopt non-fraternization policies without giving adequate consideration to how they are going to address a situation where two employees already are involved. Or, they fail to consider how they will address situations where two employees become involved after the policy is established. As I’ve expressed in other Blog analysis, I recommend that companies thoughtfully consider these (and other) issues before the situations arise and the assessments become influenced by the specific individuals involved.

As you referenced in your question, there are difficult “enforcement” issues that your company likely will confront. Some of them may be definitional. For example, although a policy may be easily applied to a married couple, what about two employees who are just dating? Is one date enough?Two? How many? At what point will the company insist on policy enforcement? Moreover, how will your company collect the relevant data and/or monitor the situation?

Not only are there difficult practical issues to consider, implementation of such a policy also raises difficult legal issues. Absent a carefully evaluated and consistently enforced approach, there is a risk of both disparate treatment and disparate impact claims. Disparate treatment claims could arise if your company concluded that to enforce its policy, the female employee must leave your organization. Disparate impact claims could arise even if your company had a facially neutral basis for selecting which member of the couple would be terminated, but your approach had an adverse impact on members of a protected class. For example, the policy may be that the employee with less seniority must leave the company. But, if your company’s past hiring practices have resulted in a workforce where your male employees generally have greater seniority, a women forced out by this policy arguably may have a disparate impact claim. Similar analysis may apply if the decision is made on the basis of management/non-management, salary, or other criteria that would favor men in light of your historical hiring practices. Even determinations based solely on performance evaluations may be problematic, since the two members of the couple may not be evaluated by the same person and there may be little consistency or fairness with the ratings.

Some companies request the employees to decide who will remain and who must leave the company. Although this approach eliminates any potential claim that the company’s selection criteria were unfair or biased, requiring the employees to choose may not yield the result the company most desires. For example, the most talented member of the couple (and the person the company would most like to retain) may have more opportunities elsewhere. Given that fact, the couple may elect to have that person leave. Although this eliminates risks associated with the selection process, it also may eliminate a talented employee from your workforce. Another option is the highly scientific coin flip.This approach certainly is a neutral process, but again, it may result in the loss of the employee the company would most like to retain.

Perhaps the best approach is to prepare, in advance of any necessary decision, a matrix reflecting the values the company would like to utilize in determining which employee should be retained. Commonly used in the context of reductions in force, the criteria on the matrix are more likely to ensure that the company will be left with the employee it most wishes to retain. The criteria would depend on the nature of the position and the skill sets deemed important by the company.

Finally, when making this determination, thought should be given to evaluating other potential legal risks to the company that may be associated with the discharge of one member of the couple. For example, are there contracts that limit in any way the company’s termination rights? Was one member of the couple recently recruited to the company to take the position, thereby increasing the possibility of a promissory estoppel claim? Does either member of the couple have a charge of discrimination or any other legal action pending against the company, increasing the risk that a discharge will result in a retaliation claim? If the company is desirous of managing carefully the risks associated with this difficult decision, these variables also should be factored into the company’s decision regarding which employee to retain and which employee to discharge.

The bottom line is that non-fraternization policies have a number of potential benefits.But, they raise practical and legal concerns that can be difficult to manage.They also can generate resentment among employees whose attitudes with respect to employer inquiries into this topic can be summarized by the observation, “None of your business.”Actually, it is your business, but you have to decide whether the benefits of adopting such a policy outweigh the detriments.

Dorsey & Whitney

Dorsey & Whitney

Dorsey is a business law firm, applying a business perspective to clients' needs. We make it our first priority to know the context in which you do business - your market, your competitors, your industry.

You may also like...