Some workplace relations a source of problems
Published 10/12/99

Intimate relations between a supervisor and her subordinate, often referred to by employers as a direct report, in the workplace can cause a host of problems for the employer. For example, other employees who are also direct reports to that supervisor may believe their co-worker, who is having intimate relations with the supervisor, is getting preferential treatment; whether it be preferable tasks, access to overtime, or other benefits delegated by the discretion of the supervisor. There is also a possibility that even if the direct report initially enters into the intimate relationship voluntarily, she may feel coerced to into staying into the relationship because of the control the supervisor has upon her in the workplace.

Another serious concern employers have is that even a voluntary intimate relationship may at some point turn sour and the direct report may be vindictive enough to make a false claim of sexual harassment alleging she was forced into the relationship by the supervisor in order to keep her job. Such a false claim could also be made to cover up the voluntary nature of an adulterous affair. These potential land mines give employers cause for concern regarding sexual harassment claims under both federal and state statutes.

Employers frequently create a firm policy prohibiting intimate relations between supervisors and their direct reports. In enforcing such policies, employers must also be conscious of the potential claims by a supervisor from whom corrective action is taken for violation of that policy. In a case that was decided by the United States Court of Appeals for the Eighth Circuit on August 11, 1999, the Court dealt with such a claim by an employee, Michael Malone, against a Nebraska employer, Eaton Corporation. In that case, the Court of Appeals upheld the Federal District Court’s decision not to allow the employee to go to a jury on his claim of gender discrimination because the Court found that there was no genuine issue of fact that Malone had failed to produce sufficient evidence to rebut Eaton’s valid business reason for termination.

Malone had initially been confronted by Eaton after a rumor that he was having an intimate relationship with a particular direct report. He denied the relationship and was warned that Eaton did not permit intimate relations between supervisors and direct reports and was advised not to do anything that would provide grounds for such rumors. Subsequently, Malone did have an intimate relationship with a direct report employee and admitted it other co-employees who reported it to management. Malone had been given an opportunity to tell the truth with the understanding that he would be demoted to a non-supervisory role but would be able to keep his job, and that no discipline would be taken as to the direct report with whom he was having the intimate relationship. Even after Malone was given the chance to tell the truth when asked about this intimate relationship, he lied.

After being terminated for violation of the policy prohibiting an intimate relationship between a supervisor and his direct report, and then lying about it, Malone filed claims against the employer, including a claim under Title VII of the Civil Rights Act for gender discrimination. In support of his gender discrimination claim, Malone noted a situation in which a rumor surfaced that a female supervisor was engaged in an intimate relationship with a direct report. Eaton asked that female supervisor if the rumor was true. When she denied it, Eaton did nothing further. The Court, however, distinguished that situation as being substantially different in that there was no employee coming forward stating that he or she had heard the female supervisor expressly admit to the relationship. Accordingly, there was no evidence that the female supervisor had lied. The Court noted that Eaton had treated Malone in the same way with regard to unsubstantiated rumor regarding an intimate relationship with a direct report.

Malone, for the first time on appeal, also tried to argue the fact that the company did not take any corrective action against the direct report was further evidence of gender discrimination. The Court noted that Eaton could, for legitimate business reasons, hold a supervisor more responsible than his direct report in enforcing such a policy. Considering all the evidence, the Court concluded that there was no factual issue to go to a jury as to whether the employer’s stated reason for discharge was a pretext for unlawful gender discrimination.

While it is the First Circuit Court of Appeals which hears appeals from the New Hampshire Federal District Court, that decision is an important reminder to employers that to enforce such a anti-fraternization policy, the employer should be cautious to ensure that enforcement is gender neutral and that the employer clearly documents its investigation to show that the investigation was done in an unbiased, diligent, and non-discriminatory manner.

J. Daniel Marr is a director and shareholder at Hamblett & Kerrigan, PA whose legal practice includes counseling businesses and business persons on a variety of legal issues and advocating on their behalf. Attorney Marr is also an adjunct professor at Daniel Webster College where he teaches business law. You can reach Attorney Marr by e-mail at: dmarr@hamker.com

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