Conflicts of Interest Workplace Policies

Improper conflicts of interest occur whenever employees are involved in circumstances dividing their loyalties between the employer’s best interest and the employee’s or a third party’s.

Although some conflicts are legally protected, such as employee interactions with labor organizations, others, such as working simultaneously for a direct competitor, are not.

Another less obvious conflict of interest can occur when a manager wishes to concurrently romance a subordinate co-worker.

Dating a coworker can also potentially expose employers to allegations of sexual harassment, sexual favoritism (a form of sexual harassment), or discrimination. However, if an employer interferes improperly, it may incur privacy invasion claims.

While some employers attempt to avoid claims by banning all workplace dating, this may venture too far into personal matters.  To balance the interests of all concerned,  companies should consider a policy that (a) prohibits any such relationships that might present a conflict of interest, such as a supervisor dating a subordinate; and (b) defines the parameters of workplace romances.

If a supervisor and subordinate wish to date, the company can and should request one of the individuals to transfer to another division to avoid potential harassment claims if the relationship should ever sour.

Management is also within its rights for the couple to confirm mutual consent by a written “love contract” defining the parameters of such a relationship.

Policy elements can include:

• Broad explanation or overview of prohibited conflicts of interest;
• The requirement to discuss the appropriateness of certain “side jobs” with management;
• The requirement for a supervisor to immediately notify the company of a consensual supervisor-subordinate romantic relationship;
• Company prerogative to transfer or lay off one or both of the individuals involved in the romantic relationship; and
• A written acknowledgment of the consensual nature of the relationship and their respective post-relationship duties if and when they stop dating each other.

Take-Away:
Implement and regularly review a comprehensive, clearly written handbook with an updated and California-compliant conflicts of interest policy.

We publish this series to educate employers on best practices for a well-written handbook that assists applicants, employees, and management alike. To purchase our template handbook – which contains the above policy and much more – and accompanying forms or for more information, please contact Office Manager Aimee Rosales at 626.583.6600 or email her at officemgr@tbowleslaw.com.

See also:

• Mandatory Sexual Harassment Prevention Training – Advantages of Live Webinar Over E-Training (November 18, 2021)
• Workplace Discrimination Prevention: California’s Fair Employment and Housing Act, A History (March 26, 2021)
• Cupid’s Arrows Are Flying – How to Regulate Workplace Romances (February 13, 2018)

Cindy Bamforth
August 19, 2022