Barbee v. Household Automotive Finance Corporation, 2003 Westlaw 22724732 (November 20, 2003).
A recent decision by the California Court of Appeals enables employers to take steps to prevent relationships between supervisors and their subordinates that pose a potential conflict of interest. This decision upholds the "anti-fraternization" policy. In a victory for California employers on November 20, 2003, an intermediate appellate court ruled that an employee could lawfully be fired for dating a subordinate in violation of company policy.
Barbee court's ruling
The California Court of Appeal in Barbee noted that employers have a legitimate interest in avoiding the appearance of favoritism, preventing family conflicts from affecting the workplace, and avoiding the potential for claims of sexual harassment that may arise from relationships between supervisors and their subordinates. Those factors weighed heavily in the court finding that supervisors do not have a right to engage in intimate relationships with their subordinates.
In ruling that the company could lawfully terminate the supervisor for dating one of his subordinates in violation of company policy, the court relied on the fact that the employer in Barbee had an express policy requiring that any supervisor who maintained an intimate relationship with a subordinate bring that matter to the attention of management in order to allow management the opportunity to take appropriate action to avoid the potential conflict of interest. Management also had advised the plaintiff that his relationship with the subordinate was in violation of the company policy. Thus, the court commented that any expectation of privacy that the plaintiff may have had in dating his subordinate disappeared once the company warned him of the consequences of continuing the relationship.
What should an employer do after Barbee?
The ruling in Barbee means that employers can take steps to prevent relationships between supervisors and their subordinates that pose a potential conflict of interest. Employers should have a written company policy prohibiting conflicts of interest that includes a policy against supervisory personnel dating their subordinates. Moreover, once an employer becomes aware of a supervisor-subordinate relationship that violates the conflict-of-interest policy, the employer should give notice to the employee that the relationship presents a conflict of interest before taking any adverse employment action against either employee. If the supervisor does not agree to an action that avoids the potential conflict of interest, such as reassignment of one of the employees involved in the relationship, then the supervisory employee is subject to disciplinary action, which could include termination.
It is critical that the conflict-of-interest policy be administered uniformly and applied to every employee equally in order to avoid a later discrimination claim. For example, an employer should not allow one supervisor to date a subordinate while disciplining another supervisor for the same conduct.
After Barbee, employers should amend their employee handbooks to include a conflict-of-interest policy preventing supervisor-subordinate relationships. Employers, however, should be cautious in applying Barbee's reasoning to purely co-employee relationships. Barbee does not authorize an employer to preclude co-employees who do not have supervisory authority over each other from dating or having an intimate relationship. Indeed, based on the rationale articulated in Barbee, the California courts will likely not extend Barbee's ruling to such co-employee relationships.