Corporate America has discovered that love hurts. Retail giant Wal-Mart, for instance, was sued successfully by one of its New York employees after she was fired for committing adultery with a fellow worker--a violation of company policy. But the court found that Wal-Mart had violated the employee's privacy under New York law.
In California, Chula Vista-based Rohr Inc. was slapped with a $4- million judgment as the result of firing a personnel department executive and a lower-ranking manager for engaging in a workplace affair. The jury found that the aerospace company had acted unfairly because it took no action against the many other corporate couples in its ranks.
Sexual harassment suits--which sometimes result from office romances that go bad--have become so common that many firms now sponsor employee seminars to reduce the potential for problems and litigation, said Joel P. Kelly, a Los Angeles attorney who defends companies against sexual harassment suits.
The challenge that lies ahead for many businesses is how to create an atmosphere flexible enough to allow for workplace courtship but also one that limits the possibility of sexual harassment. A ban on dating, for example, may reduce the potential of sexual harassment among workers, but it might also create a stifling and rigid environment.
"They need to create an environment that recognizes that these [relationships] will happen and create a process that allows for avenues to resolve conflict," said Mitchell Rosenberg, executive vice president of human resources for an Orange County mortgage company. For example, instead of firing a manager for dating a subordinate, a company should find ways to transfer one or both employees to separate departments to avoid problems.
Most large companies historically barred co-workers from dating, let alone marrying. But many of those prohibitions fell as more women entered the labor market in the 1960s and workers successfully challenged the policies as an invasion of their privacy. Under the old rules, Microsoft Corp. Chief Executive Bill Gates would not have been able to date or marry Melinda French, a company marketing executive.
Today, most firms have little in the way of written policies dealing with workplace romances, a position that is widely supported by human resources and management consultants. A 1994 Fortune magazine poll of chief executives found that nearly 75% of them agreed with the statement that romantic relations between workers are "none of a company's business."
"For those companies that have restrictive polices, they should reexamine and retire them," said Karen Stephenson, a management professor at the Anderson School at UCLA. "The companies should be focused on employee work performance, not on what somebody is doing privately."
Instead of hard and fast rules barring workplace romance, companies should do a better job of communicating and holding workers to high levels of professional conduct and performance, according to management experts. In addition, employee information on what constitutes sexual harassment might be more effective than a ban that keeps employees from dating.
One Los Angeles entertainment company recently conducted seminars on sexual harassment for more than 2,000 of its workers, according to Kelly, who was involved in the training.
"In my view, one of the best things that they can do is educate everybody, from the new hire to the CEO, about what harassment is and what it isn't," Kelly said.
Many management experts and companies remain supportive of policies that forbid romantic relationships between managers and their subordinates. Those kinds of relationships can undermine department morale and ruin careers. If a department manager promoted her boyfriend, for example, many employees might perceive that as favoritism.
In the early 1980s, the affair between Bendix Corp. Chief Executive William Agee and a young manager, Mary Cunningham, dramatically illustrated the potential risk when managers become romantically involved with lower- ranking employees. Cunningham skyrocketed up the corporate ladder at the industrial company, but she was later forced out amid employee turmoil and public criticism of the relationship.
Stephenson says she hopes such controversy is a thing of the past. "When you have a relationship [with another employee], sometimes people think that tarnishes the quality of their work. What an old-fashioned idea."
However, United Parcel Service of America takes very seriously its long-standing policy prohibiting managers from dating non-management employees, even if they work in different departments. The company has gone to court on several occasions in defense of that rule, which covers its more than 300,000 domestic workers.
"You don't want to give the perception that people got ahead by virtue of a relationship with someone else in the company," UPS spokesman Mark Dickens said.