When co-workers mix business with pleasure, it's important for employers to take note. Whether it's a drop in workplace morale or a sexual harassment lawsuit, office romances have the potential to cause big trouble for businesses of all sizes. Dianne Shaddock Austin, president of Easy Small Business HR, said there is a clear downside to colleagues getting involved in romantic relationships.
"All employers should be concerned about workplace romances," Austin told Business News Daily. "Minimally, because of the effect on employee morale and ultimately because of the potential legal issues."
Office relationships are something a large number of employers are faced with. Research from the Society for Human Resource Management revealed that 43 percent of HR professionals reported romances in their workplaces. While all office romances have the potential to cause problems, those that involve a supervisor and one of their subordinates can have the largest ramifications.
Areva Martin, managing partner of the Los Angeles-based law firm Martin & Martin LLP, said in those situations there can be appearances of favoritism when it comes to work assignments and pay raises, which can negatively affect an entire office. [6 Very Strange Valentine's Day Gifts]
"There is a feeling (among other employees) that that individual cannot be fair or objective in making decisions if they have some kind of personal relationship," Martin said of a manager who is dating one of their employees. "It can be very problematic for an employer."
In addition, when that relationship comes to an end there are huge possibilities for sexual harassment lawsuits from the subordinate.
"The employer might be facing strict liability in terms of a civil claim," she said.
Harley Storrings,a labor and employment attorney with Arnstein & Lehr, said assertions of sexual harassment can come up even when a relationship is between two employees that don't report to each other.
"Invariably,most relationships will come to an end and there could come a point where one person wants the relationship to continue and the other person doesn't," Storrings said. "Sooner or later, unwanted advances could create a hostile work environment claim, so you need to be very careful there."
In addition to the legal consequences that could arise, Austin said office relationships can have an overall negative impact on the workplace.
"Office romances that end badly can spill over into the daily work environment," Austin said. "Employers may find themselves dealing with issues of decreased productivity, or mediating between employees who are no longer working collaboratively with each other."
Austin said workplace relationships may also spur gossip, rumors and innuendo, which can be disruptive to the office and can negatively impact the reputation of the company if customers or clients are exposed to it. She said the same activity can make the affected couple feel harassed, which can lead to workplace harassment or bullying charges from them.
Additionally, there is the potential for employees to seek out employment elsewhere when relationships come to an end.
"Employers risk losing strong employees who feel that they can no longer work at the company because of the breakup," she said.
Margaret Fiester, manager of the Society for Human Resource Management's HR Knowledge Center, said while an employer's first inclination might be to forbid all office romances, she said that probably isn't very realistic.
"I think to ban it entirely would be awfully hard to enforce," Fiester said. "I think, though, you do need to have a clear-cut policy on workplace romance."
The Society for Human Resource Management research found that office romance policies are becoming more and more prevalent. The study discovered that in 2013, 42 percent of employers had a written or verbal policy on workplace romances, almost twice the number that had a policy in 2005.
Storrings agreed that all employers, regardless of size, should have a formal policy on office relationships that include what is allowed and what the consequences are if the rules are broken. He said he advises his clients that the first part of any such policy needs to be that the relationship, whether it is between a supervisor and subordinate or just two employees, needs to be disclosed to the employer.
"The employer should also reserve the right as to whether or not any type of employment action needs to be taken as a result of the relationship," Storrings said. "Whether that be transferring one of the employees to a different division or even termination."
Storrings said the key to any office romance policy is clearly defining fraternization and what is and isn't allowed.
"There is always a concern you could go too far in what you prohibit so that you actually affect the rights of employees to engage in certain activities," he said. "You don't want to go to that level because that could always bring up a claim with the National Labor Relations Act."
Storrings referred to a 2009 case in which employees sued their employer because they said their fraternization policy, which only prohibited employees in engaging in out-of-office activities, violated their rights.
"The problem is how does the court construe what you intend to mean, unless you specifically define it," he said. "You have to be careful how you craft these things, and make sure you give a pretty thorough explanation, so you don't go too far."
Among the actions Austin would ban romantically involved employees from partaking in include romantic or sexually explicit conversations, open displays of affection, such as hugging, kissing, touching, blowing kisses and winking, and romantic rendezvous on office property.
Martin said she would advise companies to take the lead in creating office romances policies, rather than waiting to deal with them when they come up.
"Companies should have policies in place and there should be a lot of training on them," she said. "Particularly sexual harassment training, because oftentimes employees don't know of the liability that can potentially arise from office romances and how disruptive and harmful they can be in the workplace."
Fiester said companies that do have a policy in place need to be sure it's enforced consistently at all levels of the organization.
"If it is your CEO (that's in violation), the same rules should apply to him," Fiester said. "Otherwise that is just going to kill morale and nobody is going to follow the policy."
Storrings said if a policy isn't applied consistently, the employers are also opening themselves up to potential lawsuits. For example, he said employers should adopt a uniform policy on what to do when relationships aren't openly disclosed.
"If it is going to be termination, then every single time you need to be prepared to terminate the employee," he said. "If it is going to be a disciplinary process, then just be consistent."
While many small businesses may think office romance policies aren't necessary, Martin believes they are the ones who can benefit most from it. She said no business is too small not to be worried about liability.
For (small businesses) a lawsuit can be devastating because of the cost of defending it," Martin said, adding that big companies probably have more insurance or financial resources to fight a sexual harassment claim should it arise. "It is probably even more prudent for small businesses to be concerned and proactive."
Originally published on Business News Daily.