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Disclosure of workplace relationships a challenge for global employers
18/11/2021
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Axel Springer
Authors
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John VDLD
John van der Luit-Drummond, Editor

Axel Springer’s plans to make more than 16,000 employees across 40 countries disclose their sexual relationships with superiors or subordinates demonstrates the difficulty of implementing one-size-fits-all policies at global employers.

The move by the German publishing giant – which does not prohibit employees having relationships – follows allegations that the now-ousted Bild editor-in-chief, Julian Reichelt, had frequent affairs with subordinates and interns in return for promotions, the Financial Times reports.

Reichelt’s dismissal from Axel Springer’s flagship tabloid and Europe’s biggest-selling newspaper coincided with the company’s $1bn acquisition of US-based Politico in October 2021, further expanding the publisher's global reach.

“It is the right approach that companies are now increasingly introducing compliance policies that cover employees’ breaches of duty, such as sexual harassment and abuse of power due to intimate relationships, by granting benefits without cause or treating subordinates less favourably,” says Julia Viohl a partner at vangard | Littler in Berlin.

The introduction of formal disclosure or anti-fraternisation policies face several challenges in Germany, explains Viohl, not least of which is how such workplace policies infringe on individuals’ constitutional rights.

“According to the German Federal Labor Court, a general ban on romantic relationships in the workplace is inadmissible as it violates the constitutionally protected general personality right,” she says, adding that the legal situation may be different if the obligation was to merely disclose intimate relationships between employees where there is an imbalance of power.

“If there is an objective interest of the company in disclosure, such regulations will be effective under German law. In any event, a legitimate interest in disclosure should be affirmed for relationships in which a conflict of interest could occur. For example, an intimate relationship between managers and their subordinates or between an HR professional and another employee.”

With constitutional and privacy rights in the spotlight, Viohl advises organisations with such policies to ensure the disclosure of relationships between colleagues are kept confidential and that the information received is only disclosed to those who have a compelling need to know about it.

With German law requiring businesses to take preventive action against sexual harassment, the disclosure of relationships may be seen as a panacea for employers in the #MeToo era. However, the introduction of such policy should not stop companies from continuing to educate their workforce on the consequences of inappropriate workplace behaviour, suggests Viohl.

“Since the employer’s duties do not end with the regulation of employee disclosure duties, there should be mandatory training to make employees aware of when intimate relationships may result in a conflict of interest and where sexual harassment begins,” she says.

“Furthermore, the company should always take immediate action and initiate internal investigations in the event of suspected breaches of duty, which can be abuse of power or even sexual harassment.”

In practice, however, German employers face an even bigger hurdle: works councils. In the case of Axel Springer, workers’ representatives blocked the media group from introducing a firm-wide disclosure policy four years ago and remain resistant to it even now, according to company CEO Mathias Döpfner.

Banning relationships

A 2019 survey from job site Vault.com found 58% of US employees have had a romantic relationship with a coworker. A more recent survey in early 2021 by the Society for Human Resource Management found 34% of Americans have had a workplace romance. Of those who had, 69% dated a peer, 21% dated a subordinate, and 18% dated a superior.

Heads have rolled at large corporates in recent years for failing to adhere to anti-fraternisation policies. In 2018, Intel CEO Brian Krzanich resigned over a consensual relationship with a subordinate. A year later, McDonald’s CEO Stephen Easterbrook was sacked after it emerged he had had sexual relationships with several employees at the fast-food giant.

“At their best, fraternisation policies can help mitigate an employer’s liability risk by setting clear standards and procedures around close personal relationships in the workplace,” says Michelle Heisner, a partner at Baker McKenzie in New York.

“Adopting such a policy can be an effective means of sending a clear message that sexual harassment and toxic work environments are not tolerated.”

As Heisner explains, a fraternisation policy needs to define the type of relationships that are subject to the policy and set out the employer’s response to such relationships.

“Will all close personal relationships be prohibited? Will the policy only prohibit such relationships between supervisors and their subordinates? Will the policy be a disclosure-only policy?”

While fraternisation policies have become more attractive to US corporates in the #MeToo era, they remain notoriously difficult to implement, says Heisner.

“They may force relationships underground, making them even more difficult to manage. Such policies need to comply with local legal requirements, which can vary from jurisdiction to jurisdiction, making a blanket approach difficult. If the policy is only selectively enforced, it can actually increase an employer’s liability risk by serving as evidence of differential treatment.”

There are other significant challenges to policing a fraternisation or disclosure policy. “The reality is that large amounts of our lives are spent at work. Large swathes of the population will engage in one or more consensual romantic relationship with a coworker during the course of their working lives. No policy will ever stop such relationships from blooming,” explains Heisner.

“If a fraternisation policy penalises the employees involved in close personal relationships, it will create incentives not to report. And if the policy is disclosure-focused, then the employer will have the difficult task of navigating what to do with the employees involved once a relationship becomes known.”