A relationship can be quite benign when between two single people in different departments, and will have little impact on the employer, provided they remain discrete and professional in the workplace. However, when people who are emotionally involved must work closely together, or are in a reporting relationship, it is more concerning to the employer: It is more difficult for the employees involved to be discrete, and almost inevitable that others on the team will become aware of it. This can cause uncomfortable situations, perceptions of favouritism, and increases office politics and drama, and that's unpleasant enough...but what happens if they have a bad break-up? Suddenly, the employer is dealing with major conflict in the workplace.
There are also Human Rights Code concerns about intra-office flirtation. Unwelcome advances by a person in a position to confer a benefit on the other in the workplace are Code violations, and while that's ordinarily viewed as a supervisor/subordinate matter, it may also apply to peers not in a reporting relationship, in the "I can move your vacation request to the top of the manager's pile" sort of sense. (I'm not familiar with any cases concerning a strictly work-related benefit, where the person making the advance is in a position to make the other person's job easier, but that would be a trickier case.)
For an employer to hire the spouse of an existing employee often doesn't create the same issues, when done carefully, because the employer defines the working relationship of the couple (instead of the couple defining themselves regardless of working relationship) and moreover there is less chance of a break-up (though you never know).
But the real issues occur where you have a clear power imbalance. When a manager engages in a relationship with a non-managerial employee, an employer should worry. This remains true, if less so, even where the employee is not a direct report of the manager. Concerns about favouritism are more severe at that level. If the manager crosses the line in terms of the above-noted Code concerns, the employer is likely directly liable for that.
Thus, even employers who don't feel that they need a nepotism policy (i.e. family members working together) should always have a good fraternization policy.
And there's good news for employers dealing with managers who violate fraternization policies, in the form of the recent case in Reichard v. Kuntz Electroplating Inc.
Mr. Reichard was a manager of Kuntz, having worked there since 1984, and at age 41 began an extramarital affair with Ms. Thompson, an administrative assistant who at the time was, to use the words of the trial judge, "not directly under Reichard". In 2005, Kuntz introduced a non-fraternization policy, as a mechanism to carry out its obligations to ensure that its workplace is free from sexual harassment. The policy is not reproduced in the decision, but it appears that it may not have an absolute prohibition on romantic relationships, but requires disclosure to the employer of any romantic relationships.
8. The policy was not introduced for moral reasons. It was introduced to protect both employees of Kuntz and Kuntz. Kuntz has a vested interest in not having any of its employees harassed sexually or otherwise. It also wants to guard against any favouritism or perceived favouritism between employees. In particular, the reporting provision would allow Kuntz to make arrangements to eliminate or mitigate a conflict of interest if there was a romantic relationship between two employees.Under the policy, Reichard was required to disclose his ongoing romantic relationship with Ms. Thompson. There were many rumours about the relationship, and Reichard's superiors asked him about it on multiple occasions, and he denied it. (One has to wonder if these suspicions prompted the implementation of the policy in the first place.)
In 2006, on Reichard's suggestion, Thompson was transferred into his department over two other candidates, and he gave her "glowing" reviews. There was evidence of favouritism, making other subordinates uncomfortable, and Reichard routinely took extended lunches with Thompson.
Finally, in 2008, Reichard confided about his troubled personal life, including that he had fathered Thompson's infant son, in another employee, who reported it to the employer. Reichard then finally admitted the affair to the employer, and was suspended and told that he was on suspension and could not return until called by someone from the company. The employer's evidence was that they were leaning towards discipline short of dismissal, but then discovered that in the days following the suspension he returned twice to the office despite the suspension.
The employer then concluded that it was unable to trust Reichard as his position required, and so terminated him for just cause. The judge agreed with the decision, and dismissed Reichard's action. It all turns not so much on the relationship itself, but on his continued deception about the relationship, breaching the non-fraternization policy.
The Court's reasoning is a little thin on a couple of points. Firstly, Reichard argued that the non-fraternization policy didn't apply to the relationship, because it pre-dated the implementation of the policy. I'm not sure this should hold much sway, but I'm not comfortable with the way the judge disposed of it, either, being because Reichard had simply denied the affair rather than asserting that the policy didn't apply to him.
If one assumes that there wasn't a free-standing obligation on Reichard to disclose the relationship upon request (which may not be the case) and that the policy either did not or could not apply to pre-existing relationships (albeit doubtful), then Reichard would have been entitled to conclude that the relationship was none of the employer's business, and that he had no obligation to disclose. To refute the applicability of the policy would have entailed telling the employer (at least impliedly) that the relationship predated the policy, which would in effect disclose the relationship and comply with the policy. Therefore, the judge's conclusion that the policy applied because he didn't refute it has the effect of saying that disclosure was necessary to preserve his entitlement to not disclose. Incoherent.
Next, I'm concerned with the absence of any indication as to why Reichard returned to the office while on suspension. If it was to talk to Thompson, then that's clearly aggravating. If it was for some other reason - say, picking up the heart medication he forgot - then maybe not so much.
Third, the details of the suspension are thin, as well. There's a line of case law suggesting that you can't discipline twice for the same offence (meaning that a suspension pending a final determination must be very carefully implemented, and it isn't clear that this happened in this case), and that, in the absence of contractual language to the contrary, an employer cannot suspend an employee unless just cause already exists.
The judge looked at everything in its totality and found that Reichard's misconduct was sufficient to justify termination, and that the return to the workplace was the straw that broke the camel's back, so to speak. But if you suppose that just cause wouldn't have existed without the returns to the workplace, it isn't clear that the employer was entitled to tell Reichard to stay away (without entirely repudiating the employment contract), which would obviously impact the extent to which his returns can be seen as misconduct.
This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.