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Monday, December 11, 2017 by Bone

Employers have every incentive to prohibit improper relationships between supervisors and their subordinates. The employer is automatically liable if the supervisor implements a tangible employment action once that relationship turns sour. The employer was safe while the relationship was consensual. No one, especially employers, can accurately predict when romantic consensual relationships will turn into unwelcome relationships. A company policy prohibiting such romantic relationships makes sense, is legal and can be enforced.

Enforcement worries employers. They don’t want to become “bedroom police.” They fear they will not be able to draw distinctions between various employee relationships. However, such policies are being enforced every day. Just ask Michael Malone, a former supervisor at Eaton Corporation in Nebraska. Eaton had a plant policy prohibiting intimate relationships between supervisors and direct reports. This policy was apparently unwritten so we can not give you the language Eaton used.

Michael was promoted to supervisor in October 1996. Thereafter, his supervisor, Ron Fowler, heard “rumors” Michael was having an intimate relationship with Ann Ables, one of his direct reports. Ron went to see Michael who denied the rumor. Ron told Michael he was happy to hear that since Eaton had a policy against such relationships. Ron told Michael not to do anything “that would provide grounds for such rumors.”

Five months later, Michael’s romantic affairs were once again the topic of conversation at Eaton. This time, a second female direct report, Lynette Gilming, was involved. Michael unwisely told three other supervisors he was having an affair with Lynette. One of the supervisors, Luci Donaldson, the company’s Suggestion Coordinator, reported Michael’s comment to Human Resources.

This lady’s “suggestion” launched an investigation. The Human Resources Manager and Michael’s supervisor confronted him. They asked him directly if he was having an intimate relationship with Lynette. Michael was told Eaton was concerned about potential sexual harassment liability if his reported relationship with Lynette turned sour. He was also assured that, if he admitted the relationship, he would be offered a non-supervisory position and no disciplinary action would be taken against Lynette. Finally, Michael was warned he would be fired if he denied the relationship and that was later discovered to be a lie.

Michael lied. He denied the relationship with Lynette. Human Resources then met with the other two supervisors who had heard Michael’s earlier admission. They confirmed Michael had specifically said he was having an intimate relationship with Lynette. Michael was then fired. When asked at his deposition why he lied, Michael said he “didn’t think it was any of their business.”

Michael sued Eaton, claiming sex discrimination. He made two arguments. One, raised only on appeal, was the ungentlemanly suggestion that Eaton’s failure to discipline Lynette was itself evidence of sex discrimination. After all, Michael’s attorney argued, she was also an equal participant in the improper relationship. The Eighth Circuit disagreed. Michael was a supervisor and Lynette was not. The appeals court held Eaton could “reasonably place most of the burden of enforcing its policy on supervisors who are to blame,” Malone v. Eaton Corp., 1999 U.S. App. LEXIS 18514 (8th Cir., August 11, 1999). The court could also have mentioned that Lynette, as far as we know, never lied about the relationship.

Michael’s principal argument was that a female supervisor also violated this company policy by having “intimate relationships” with her subordinates, but was never disciplined. This supervisor, unlike Ann and Lynette, was not named in the court’s opinion. Eaton responded that it had confronted this female supervisor when it received “rumors, anonymous notes and telephone calls” about her supposed affairs with subordinates, but that she simply denied the allegations. The company did not pursue the matter further. It had done the same thing when Michael denied rumors of his intimate relationship with Ann Ables. With respect to Lynette, however, Michael admitted that intimate relationship to three other supervisors and then lied to management “even after he was warned that dishonesty would be grounds for his dismissal.” One wonders why the court found it necessary to publish Ann’s name when that relationship, like the unnamed female supervisor’s relationships, was never confirmed.

This was a sex discrimination claim. There was no proof Eaton applied its policy prohibiting supervisory relationships with subordinates selectively or inconsistently. When persistent rumors surfaced, the company confronted the supervisor targeted by those rumors. It prudently told those supervisors about its policy and specifically warned them not to lie about the matter. It then accepted the supervisor’s response at face value and gave them the benefit of the doubt. It did not conduct an investigation, for example, by asking the subordinates also targeted by those rumors (or their coworkers) if the rumors were true. That follow-up would have been required for a sexual harassment complaint against those same supervisors.

The issue here was what the company knew, not what its supervisors may have known. Where the issue is supervisory misconduct in violation of corporate policies, the company must receive proof of that misconduct. The female supervisor Michael sought to implicate may have lied as well when she denied having intimate relationships with her subordinates. What she knew was not attributed to Eaton. Other company supervisors may have even known about those relationships and/or even about Michael’s. Unlike sexual harassment, that supervisory knowledge is not automatically imputed to the company. What brought Michael down was, first, the report to Human Resources by the female Suggestion Coordinator and, second, Michael’s admission of his affair with Lynette to the three supervisors.

Michael was doubly wrong, first, mentioning his intimate relationship with Lynette and, second, lying about it because, in his view, it wasn’t “any of [the company’s] business.” It was the company’s business because its plant policy prohibited such relationships. This company successfully enforced its policy. It also was granted summary judgment dismissing Michael’s sex discrimination lawsuit.

Copyright) 2000 Nixon Peabody LLP. All rights reserved.

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require and further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative.