Office 'love contracts' curb company risks, but aren't foolproof
Former Ted Cruz campaign pollster Chris Wilson, Stanford School of Business lecturer Dave Dodson and Politico congressional reporter Melanie Zanona discuss the firing of McDonald’s CEO Steve Easterbrook and Chief People Officer David Fairhurst over Easterbrook’s romantic relationship with a subordinate.
Workplace relationships have been the topic of recent controversies as high-level executives at big companies have lost their jobs for their office romances.
Mark Wiseman was fired from his senior-level post at BlackRock, one of the largest asset managers in the globe, after it was revealed that he had been engaging in an extramarital relationship with a coworker. Wiseman, who was reportedly next in line to be CEO of the firm, did not tell his supervisors about the relationship, as is required by the company.
Mark Wiseman, Global Head of Active Equities and Chairman of BlackRock Alternative Investors at BlackRock LLC. (REUTERS/Mike Segar)
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In November, McDonald’s then-CEO Steve Easterbrook was ousted from the fast-food giant after he “violated company policy and demonstrated poor judgment involving a recent consensual relationship with an employee.”
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Intel’s former CEO Brian Krzanich experienced a similar fate in June 2018, when he stepped down from his post after he, too, was exposed for having a consensual tryst with a colleague.
Big companies, including Facebook, mandate employees to report office relationships if they involve two people who have a conflict of interest, or work within the same chain of command, The Wall Street Journal reported. But more and more, some firms are adopting strict policies against workplace relationships, or even forbidding them altogether.
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In 2018, five of the 12 CEOs who departed from S&P 500 companies were dismissed for violating their respective companies’ dating policies, or after allegations of personal misconduct, the outlet reported.
Many companies are adopting "love contracts," a nickname for consensual relationship agreements, as a way to mitigate any potential risk the company might face, employment attorney Misty Marris told FOX Business.
"They are actually more of a common practice nowadays than they ever have been," Marris said. "Now there's such a sensitivity around sexual harassment claims that love contracts are becoming more and more popular, especially in bigger companies."
By signing love contracts, two employees in a relationship with each other are acknowledging their relationship and confirming that it is consensual, Marris said.
"It's much harder to argue that there was not consent to engage in a relationship with this person," she said. "Now, that being said, love contracts can actually go a step further ... a love contract can also set ground rules. So how are you dealing with a relationship internally in a company?"
The ground rules, if part of the contract, can set parameters for how the employees can behave toward each other at the office," she said. "In some cases, they can also establish that the employees cannot accept certain roles in the company, so to protect any issues that might arise as a result of the power discrepancies.
"So In some cases, these agreements ... can say that neither party or neither person involved in this relationship will accept a role that involves managing or reporting to the other person," Marris said.
Certain companies have fraternization policies included in the employee handbook that is signed when a person accepts a job, and often requires employees to notify their human resources about a relationship.
"You don't always want colleagues, coworkers, management poking around in your personal life [and] some people might not be doing what would be considered the moral thing. They may be engaged ... in a consensual relationship in the office, but they might be having extramarital affair," Marris said. "It's so rare for someone to voluntarily bring that information to the forefront that a workplace policy can require it. And your job is on the line if you don't comply."
But workplace love contracts are not foolproof, and they don't prevent issues from arising after the fact, such as quid pro quo sexual harassment or retaliation. It also doesn't prevent someone from claiming later on that he or she was forced or pressured by their significant other from signing the agreement.
"Some C-suite employees, high-level people, they engage in a relationship with a lower-level [colleague]," Marris said. "There have been arguments where they said 'I felt coerced into actually signing the contract. I was coerced because this person dictates every aspect of my employment, even if I'm not directly reporting to them.'"
As a result of the potential for conflict, Davia Temin, CEO of crisis-management firm Temin and Company, told the Journal “some places are saying, ‘Just say no.’”
“There is a magnifying glass that is on this kind of behavior right now within the organization," she told the outlet, "and you have to be smart about that."
Agreements of this kind are not only enforced in the workplace -- star-studded couple Justin Timberlake and Jessica Biel reportedly drew up their own love contracts, which state that the actor and former singer would have to pay his wife $500,000 if he were to have an affair. Timberlake was recently in hot water after a video showed him holding hands with a co-star. On Thursday, he issued a public apology.