Anti-Fraternization Policies - Extra Protection Against Harassment and Discrimination Claims?

April 24, 2002

One way that employers can help to insulate themselves from vicarious liability for sexual harassment and discrimination claims is to adopt anti-fraternization policies that restrict or limit office romances. Private sector policies barring such relationships between supervisors and their subordinates clearly are legal and enforceable under Pennsylvania law. Although no court in Pennsylvania has directly decided the question, there appears to be no legal obstacle to adopting and enforcing broader policies that forbid dating between co-workers, regardless of rank.

Survey statistics indicate that fraternization bans – though less common than supervisor/subordinate dating restrictions – are finding favor among some companies as a means of attempting to head off workplace problems ranging from complaints of retaliation and sexual harassment to decreased productivity or threats of violence. (1) Employers considering the adoption of formal policies regulating employee relationships need to be aware that stringent anti-fraternization rules may trigger litigation if (i) they are not consistently and evenhandedly enforced; or (ii) if investigations of alleged violations intrude unnecessarily upon employee privacy.

As evidenced in Rogers v. International Business Machines Corp. and McDaniel v. American Red Cross, federal courts applying Pennsylvania law have recognized that an employer has a legitimate interest in “preserving harmony among . . . employees and in preserving its normal operational procedures from disruption.” Thus, a company is generally free to regulate workplace conduct – including co-worker dating – and may terminate at-will employees (2) who violate well-drafted anti-fraternization policies. The plaintiff in the Rogers case brought a wrongful discharge and invasion of privacy claim after being fired on the grounds that his personal relationship with a subordinate had disrupted the workplace and affected his work performance. The plaintiff, a branch manager for IBM in Pittsburgh, was fired after a company investigation concluded that his “relationship with a subordinate employee exceeded normal or reasonable business associations.”

The Rogers court stressed that private sector employers are free to terminate at-will employees unless the termination violates “a clear mandate of public policy.” Otherwise, “a discharge may be for good reason or no reason.” In McDaniel v. American Red Cross, the same federal court found that an employer had acted within its rights when it fired two supervisors for failing to comply with the organization’s sexual harassment policy, which required that all suspected incidents of harassment be reported. A female employee described incidents of unwelcome advances to a middle manager, but specifically asked that the incidents be kept confidential. Because employers face a real risk of being held vicariously liable under federal law for their employees’ misconduct, the court reasoned that the fired supervisors were not free to honor their promise of confidentiality to their subordinates but instead were required to comply with the Red Cross’s anti-harassment policy. The decision suggests that companies have particularly wide latitude in adopting and enforcing policies designed to curtail sexual harassment in the workplace. (3)

The Pennsylvania Supreme Court has never addressed the legality of anti-fraternization policies, but its precedents give employers substantial discretion in adopting and enforcing workplace conduct rules. (4) Provided an employee is not fired for refusing to violate the law or for complying with a legal duty, an employee generally has no cause of action against his or her employer if he or she is fired for violating company policy. (5)

Under these precedents, an employee fired for violating a private company’s anti-fraternization policy appears to have little chance of success on a public policy claim because no clear competing legal duty or protection would be at stake. Government employers may face legally credible claims that such policies violate the constitutional right to freedom of association, but private employers are under no similar restraint.

Similarly, an employee fired for dating a co-worker is unlikely to successfully claim invasion of privacy, unless the claim is based on an unduly intrusive investigation of his or her personal life or if facts regarding the employee’s intimate relationships are publicized more broadly than required. For example, a California jury awarded $4 million to employees who were fired after what they claimed was an excessively intrusive investigation. The fired couple also claimed that the company routinely overlooked similar relationships. (6) In addition, courts in Indiana and Georgia have recognized causes of action based on allegations of discriminatory application of anti-fraternization policies.

It is critical that companies that adopt policies barring intimate relationships between employees:

Make sure employees are given adequate notice of the restrictions
Communicate the consequences of violating the policy
Apply the policy fairly and consistently
Limit the scope of investigations of violations to the extent possible, and limit access to any information collected about the employees’ behavior

Finally, before banning workplace dating, consider whether you will be willing or able to enforce the policy against highly-valued employees. From a potential liability standpoint, unequal enforcement is probably worse than having no policy at all.

(1) A 1998 Society for Human Resources Management (“SHRM”) survey found that only 13 percent of respondent companies said they distribute written policies on workplace romance to employees. Only 4 percent of companies that had policies indicated that dating between employees is prohibited regardless of rank. Seventy percent restricted dating between supervisors and subordinates, with the consequences for violators ranging from transfer to another department to termination. SHRM Workplace Romance Survey, January 28, 1998. Roughly one-quarter reported experiencing negative fallout from dating among their employees within the last five years.

(2) The right to terminate employees subject to collective bargaining agreements or individual employment contracts differs only if and to the extent that those contracts provided greater substantive or procedural protection against termination.

(3) The court recognized the conflict the supervisors had been placed in but stated that the breach of company policy clearly justified the employees’ discharge.

(4) In Geary v. U.S. Steel Corporation, for example, the Pennsylvania Supreme Court held that an employer did not violate public policy when it fired an employee who brought product safety concerns to light. The employee was terminated for failing to follow the company’s chain of command.

(5) Employers were found to have violated public policy when they fired employees for (i) filing workers compensation or unemployment compensation claims; (ii) refusing to take polygraph examinations; (iii) missing work to serve on a jury; or (iv) fulfilling a legal duty to report safety violations involving nuclear materials to the government.

(6) In Bingham, a jury awarded $4 million to a couple who were fired after an investigation that included extensive questioning regarding the past personal relationships of one of the plaintiffs. In addition, the couple alleged that 34 similar relationships within the company were ignored by management.

For more information, please contact rlinn@cohenlaw.com.