Valentine’s Day is drawing near. You know, that magical time of the year when bad tasting, heart-shaped confections and red roses are everywhere you look, including the workplace. Of course, an employer’s non-fraternization policy will do little to stop two adults from taking their relationship to the next level. Though office relationships on occasion may lead to good  things for the employees involved like diamond ring purchases, white weddings, and gender-neutral nursery décor, more frequently they lead to problems for employers such as claims of favoritism, reduced productivity, ethical problems, and sexual harassment claims, just to name a few.

Even in cases where the consensual nature of the relationship is patently obvious, jilted employees still may try to seek retribution against former lovers through the legal system. It’s the employers, however, that end up caught in ex-lover crossfire and typically bear the financial brunt of office romances gone bad.

Take Kane v Honeywell Hommed, LLC, (D. Colo. July 30, 2013) for example. It is a great case that shows how even the most obvious of consensual relationships can end up in expensive litigation for an employer. While this case is included in a Valentine-themed blog, it is more fitting for a Halloween-themed one because it will downright scare most employers. Kane involved an employee who carried on in a two-year consensual romantic relationship with her supervisor. She later quit work (without ever complaining to her employer about sexual harassment), got engaged to her former supervisor and even started planning their wedding. When she later found out he was already married, she called off the engagement and the relationship and tried to get her old job back. The employer, still unaware of the relationship, offered her old job back, but she declined because it required her to report to her former fiancé.  She then sued the employer for hostile work environment sexual harassment, even though the employer never learned  that she was involved with her former boss until it received her EEOC charge.

In dismissing her claim, the court noted that the employee’s voluntary engagement in sexual conduct is not a defense to her hostile work environment claim, that the court concluded that her testimony that she remained with him because she was in love with him and the fact that she agreed to marry him severely undermined her claim.

As we blogged here last week, there are steps employers can take to help reduce the bad things that can occur when a workplace romance goes bad. One of those ways is through a “Love Contract,” or in legal jargon a “Consensual Relationship Agreement.”

What is a Love Contract? A Love Contract establishes workplace guidelines for workplace dating or romantically involved coworkers. It puts romantically-involved employees on notice of the workplace parameters of their relationship, allows employers to monitor the workplace impact of the relationship, establishes expectations for employee conduct, and allows the employer to discourage favoritism and be alert to signs of potential harassment should the relationship end. Ultimately, however, a Love Contract limits an employer’s liability in the event the romantic relationship ends.

What Should a Love Contract Include? A Love Contract should be signed by both of the romantically-involved employees; both employees should acknowledge they have entered into the romantic relationship consensually, voluntarily and without any type of coercion or duress; and, attest that their relationship will not interfere with one another’s work performance.

It is also helpful to remind the employees what conduct is appropriate in the workplace and what it not, to remind them of the employer’s policy prohibiting harassment and discrimination in the workplace, and to ensure they are familiar with the employer’s complaint procedures.

Additional language should be included if the romantic relationship is between a supervisor and a subordinate, where the supervisory employee agrees not to be a part of any employment decisions affecting the subordinate. For this reason, a Love Contract will not work in cases such as Kane where the involved employees are in a direct reporting relationship.

For employers that may be so inclined, a binding arbitration clause can be added, making binding arbitration the only grievance process available to either one of the romantically-linked employees should either one seek to sue the company for sexual harassment.

Employers Should Stay Alert: For employers to really get their bang out their buck with a Love Contract, they should stay alert and regularly check the status of consensual workplace romances. At the first sign that the relationship is no longer consensual, that the relationship has ended, or worse, turned very sour, the employer should be on the alert for any possible inappropriate behavior that might lead to sexual harassment like unnecessary or uninvited visits to an ex’s workspace, constant telephone calls, emails, texts, or instant messages, etc.  If this happens, the employer may want to take additional affirmative steps to remind the employees of the company’s sexual harassment policy and of their contractual obligations or take more aggressive measures if necessary.

Cure the Fatal Flaw With Love Contracts: Unless required (and sometimes even if required), most employees do not tell their employers they are having a workplace romance and, from what I have seen, many non-fraternization or workplace-romance policies do little to inform employees when their workplace romances must be disclosed. In fact, many non-fraternization or workplace-romance policies generically provide something to the effect of: “All workplace romances must be disclosed as soon as possible.” If this employers are relying on this type of policy to put employees on notice of a romantic workplace relationship in order to get a Love Contract in place, they are in for a big surprise. In this day and age where terms like “friends with benefits,” “no strings attached,” “hooking up,” and “nothing serious,” are commonplace, employees claim that their relationship is not  “romantic,” and may not know when the “relationship” has progressed to the point where it is necessary to notify their employer.

Takeaways: Employers, do yourself a favor: Dust off your non-fraternization or romance-relationship reporting policy and give it a mild facelift to more clearly define the notification requirement, e.g., employees must report a romantic relationship as soon as the employees go out on a date, engage in any physical contact including hand holding or kissing. While this may seem juvenile, this type of express language will help insulate the employer from liability for implementing discipline upon employees who failed to disclose relationships with co-workers claiming they did not consider their relationship “romantic” or that they “were not sure they were going to take their relationship to the next level.”