What's Love Got to Do With a Contract?

A 2007 Spherion Workplace Snapshot survey revealed that approximately 40 percent of U.S. workers have dated a co-worker and that another 40 percent would consider doing so. Inevitably, most workplace relationships end. Some end badly, and many of those result in litigation involving claims of coercion and/or retaliation, despite the fact that most of these relationships are consensual at the outset.

It's not just the jilted lover who could be a company's next adversary in workplace litigation. In a 2005 California Supreme Court decision, Miller, et al. v. Department of Corrections, et al., a group of California employees not involved in workplace romances succeeded in establishing hostile work environment discrimination based upon favoritism bestowed on those who were romantically linked with a supervisor. Plaintiffs lawyers will test this reverse quid pro quo theory of liability in other states, including Texas.

In response to litigation arising from workplace relationships, many businesses have implemented nonfraternization policies designed to prohibit or discourage workplace relationships. But these policies have had limited effect. According to the 2007 Spherion survey, 84 percent of U.S. workers have no idea whether their employers have such policies or believe the employers have chosen not to have one. Clearly, most employers do a bad job making their expectations known to employees on these issues. Additionally, many employers recognize that it is neither possible nor desirable to ban workplace relationships. First, employers generally prefer not to chaperone employees. Second, most employees consider employer monitoring of personal relationships an invasion of privacy, and some jurisdictions may prohibit it altogether. Third, failing to enforce nonfraternization policies evenhandedly and consistently increases the possibility of discrimination claims, the very thing such policies were designed to prevent. Finally, and maybe most important, outright bans of employee relationships simply don't work. Since most workers spend at least one-third of each day in the office, it is hardly surprising that personal relationships develop.

Another area of concern for employers is striking the proper balance between respecting employee privacy and remaining in touch with what is happening in the workplace. In general, employers should not actively search out information on whether employees are dating. Employers may learn of a workplace romance when an employee voices concern to human resources or when a manager observes behavior clearly indicating that such a relationship has developed. Once a relationship comes to the employer's attention, however, management must determine how best to address the situation as it affects the workplace.

Powerful Deterrent

In response to the limited effectiveness of nonfraternization policies and to prevent workplace romances from blossoming into litigation, many companies have developed employee relationship acknowledgements, otherwise dubbed "love contracts," in which employees in relationships make certain disclosures to their employers. Love contracts, when properly implemented, can serve as a powerful deterrent to future litigation. With this in mind, any executive considering the use of love contracts should know the following:

• The essential elements. Although the precise language will vary, an effective love contract should contain the following disclosures: 1. the relationship is consensual and is not based on intimidation, threat, coercion or harassment; 2. the employees have received, read, understood and agreed to abide by the company's policy against harassment and discrimination; 3. the employees agree to act appropriately in the workplace and avoid any behavior that is offensive to others; 4. the employees agree not to let their relationship affect their work or the work of their co-employees; 5. neither employee will bestow upon the other any favoritism or preferential treatment; 6. either employee may end the relationship at any time and no retaliation of any kind will result; 7. the human resources department will make available its contact information in case either employee feels the relationship is affecting his or her work; and 8. the employees have had sufficient time to read the document and ask questions before executing it of his or her own free will.

• Unenforceability as a contract is a non-issue. Whether the document is an enforceable contract almost doesn't matter, because the real strength of a love contract lies in the nature of the acknowledgements made. It shows that the employer took affirmative steps to maintain a workplace free from sexual harassment and retaliation, and it serves as powerful evidence that, at least at the time of execution, the relationship was consensual. Finally, it reaffirms that both employees are aware of the existence of a policy prohibiting sexual harassment, discrimination and retaliation and their obligation to abide by it.

• A love contract will not prevent litigation, but it will assist an employer's defense. Like any other step an employer takes, a love contract can be a strong deterrent to employee claims, but it will not prevent all future litigation arising out of a workplace relationship. Nevertheless, a love contract will, if nothing else, lay the groundwork for a solid defense should litigation ensue. For example, an aggrieved employee can still claim he or she suffered retaliation after a breakup, but a love contract confirming that the relationship began consensually should support a defense that the perceived post-relationship retaliation was based on personal animosity rather than gender-based discrimination.

• Considerations before utilizing love contracts. Although not a concern in Texas, it's wise to look into whether privacy laws of any other places where the business operates prohibit or limit employer monitoring of workplace relationships. Also consider how to present the idea of a love contract to a couple; unless a relationship is brought to the employer's attention, the employer must exercise sound judgment in deciding when to address what a manager's own observations may lead him or her to suspect is a budding relationship. Decide in advance what to do if one of the participants denies the relationship or refuses to sign the document. Finally, since there is no one way of developing an effective love contract, retain experienced labor and employment counsel to draft the appropriate language that meets the particular needs and objectives of the company.

Properly implemented and appropriately drafted, love contracts will reduce the likelihood of litigation arising from workplace relationships. In the event of litigation, an effective love contract will bolster an employer's defenses and increase the prospect for prevailing on summary judgment or at trial.?

Joseph W. Gagnon represents employers in labor and employment matters with Fisher & Phillips in Houston, where he is of counsel. His e-mail address is jgagnon@laborlawyers.com.