Key Considerations For Companies In Deciding Whether To Institute Anti-Fraternization Policies

Author:Mr Arthur Kohn, Jennifer KennedyPark and Armine (Inna) Sanamyan
Profession:Cleary Gottlieb Steen & Hamilton LLP

In recent years, numerous senior executives have resigned or been terminated for engaging in undisclosed consensual relationships with subordinates.1

Such relationships are gaining particular attention in the wake of the heightened scrutiny around workplace behavior, because they raise concerns relating to, among other things, potential power imbalances and conflicts of interest in the workplace. Thus, it is increasingly important for companies to consider whether to institute policies governing close personal relationships, and what those policies might look like. We address a few key considerations to guide those decisions.

Should My Company Have an Anti-Fraternization Policy?

The percentage of companies that have instituted policies regarding close personal relationships in the workplace is decidedly on the rise.2 Some companies have policies governing close personal relationships between all employees, while others' policies are limited to relationships between supervisors and subordinates. These latter types of policies are the focus of this posting (and we will refer to them, in short, as "anti-fraternization" policies). As of last year, over half of surveyed HR executives reported that their companies have formal, written policies regarding close personal relationships between employees, and 78% reported that their companies discourage such relationships between subordinates and supervisors.3

However, not all companies have anti-fraternization policies, and there are pros and cons to such policies. How those pros and cons weigh against one another will depend in large part on the specific circumstances of the employer, such as its culture, its experience with potentially inappropriate workplace behavior, its size and its organizational structure.

On the "pro" side, adopting an anti-fraternization policy...

Sends a message against sexual harassment:The most obvious concern raised by workplace relationships among subordinates and supervisors is that, in light of the inherent imbalance of power, such relationships may not be, or remain, consensual and welcome, notwithstanding appearances.As the #MeToo movement has prominently brought to light, a subordinate may not feel comfortable saying "no" to a supervisor, instead acquiescing to the relationship out of fear of adverse employment action.Thus, what on the surface may appear to be a welcome relationship may in fact constitute sexual harassment from the perspective of the subordinate.Instituting a policy addressing such relationships sends a message to employees - of all seniority - that the company is cognizant of these risks and takes them seriously enough to act pre-emptively.Such a policy can thus serve as an important complement to a company's policies against sexual harassment. Mitigates legal risk:When and if a workplace relationship ends, the employer may have derivative legal exposure for the conduct of the employees involved in the relationship, including if the subordinate claims that the relationship was the...

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