Playing Office Cupid

Workplace romance can ruin careers.

Just ask Gary Friedman, former CEO of furniture company Restoration Hardware Inc. In October 2012, he stepped down after his relationship with an employee went public.

Friedman, who was 54 years old at the time, had started dating a 26-year-old employee after she had broken up with another man, who out of jealousy alerted the company to her romance with the boss, according to news reports.

The company’s board of directors was at first reluctant to validate the spurned lover’s claims, but soon decided that the relationship was inappropriate despite being consensual. 

Despite having saved Restoration Hardware from bankruptcy in 2001 and turning it around, Friedman was out — at least for a few months, before being brought back as a co-CEO in January 2013. His girlfriend no longer works for the company. A Restoration Hardware spokeswoman did not respond to an interview request for this story.

But not every workplace romance has had the same happily ever after. Media coverage shined a light on Best Buy CEO Brian Dunn in 2012 after he resigned when an investigation found him having an inappropriate relationship with a female employee.

Plenty of other stories of this ilk abound. But despite the bad rap office romance brings, some relationships can actually improve work performance and productivity, human resources experts say, particularly when they happen between peers rather than supervisors and subordinates.

To take advantage of these benefits, experts say talent managers should walk a thin line with policy, management and communication.

Inevitable but Ignored

In CareerBuilder’s 2014 Valentine’s Day workplace romance survey, 38 percent of the 3,000 responding workers said they’d been in a workplace relationship. Blame part of this on the growing millennial workforce, the survey said, which has been raised on the romanticized ideas of finding love among the cubicles thanks to pop culture fixtures like Jim and Pam in the popular U.S. version of the television series “The Office.”

In a survey by Workplace Options, an employee benefits provider, 71 percent of millennial respondents thought that workplace romance had positive effects on their job performance. That number shrank to 45 percent among those aged 30 to 45 years and 36 percent for those aged 46 years and older.

“Even when they’ve had relationships, 40 percent of millennials report no negative results,” said Dean Debnam, CEO of Workplace Options. “But that still leaves the other 60 percent.”

That’s not necessarily a bad thing, said Renee Cowan, assistant professor in the University of Texas at San Antonio’s department of communication who has completed several studies on workplace relationships. HR professionals have to balance the Gen Y idea that romance is good for productivity and motivation with the need to prepare for when things go sour.

Talent management often conflatessuperior-subordinate romance as the only type of relationship that can exist at work, Cowan said. But romance can bloom between peers.   

“The bottom line is people are meeting people in different ways now,” Cowan said, “and typically a lot of people are at their jobs 24/7. They’re married to their jobs in different ways, so they’re going to meet people they’re attracted to because of interest or proximity. It’s inevitable that it’s going to happen.”

Unfortunately, many companies don’t know what to do with these same-level relationships. It’s easy to put a ban on superior-subordinate romance — in a 2013 survey by the Society for Human Resource Management, nearly all respondents said they had a policy that prohibited it — but few mention employees in different departments or at the same level.

The same SHRM study found 53 percent of work romances are between employees in different departments, and 32 percent are between workers of the same rank (Figure 1).

If that many office romances happen between different departments or peers, why aren’t there more regulations addressing it? For one thing, most research has been done from an organizational perspective focusing on superior-subordinate relationships.

But ignorance also harkens to companies’ reluctance to define relationships for fear of being too loose or restrictive, Cowan said. In 2013, Texas law firm Scheef & Stone faced a lawsuit by an employee who claimed its anti-fraternization policy made her feel isolated by prohibiting male and female colleagues from being alone together both in and out of the workplace.

“I am sure organizations know they cannot really regulate this kind of employee activity,” Cowan said. “Instead, they decide to be ambiguous in these situations.”

Like many HR issues, ignoring it is not going to make it go away. If managed properly, workplace romance can boost productivity and performance.

Cowan said employees can be more motivated and excited to come to work. They might stay at a company longer because their partner is there and the company is supportive.

All Is Fair in Love and Work

If there isn’t an on-the-ball HR department or talent manager in the loop, however,office relationships can negatively affect the performance of not only the people involved but also their co-workers.

Sean Horan, a department of communications faculty member at Texas StateUniversity who now works with Cowan, hasconductednumerous studies on how love between two people in an organization can discount their credibility with others, create issues of mistrust and threaten workforce solidarity.

Most problems lurk when a subordinate and supervisor date, as seen in the Restoration Hardware and Best Buy cases. Employees might believe their peer is getting preferential treatment because he or she is dating the boss, or it could flip the other way.

“We frame our studies in equity theory,” Horan said, “this idea of fairness, which boils down to the idea that if you think that someone is dating your boss that they’re in an alliance and therefore have one up on you.”

Employees who feel frozen out of something react with even the subtlest retaliation, such as keeping their smitten co-worker out of the loop on a project. All of this slows down productivity of the department. Meanwhile, Cowan said her research has led to interviews with people who said they subjected their romantic partner to higher standards, which might not necessarily be fair to the employee in the relationship.

But the danger isn’t just in different ranks. Even if two employees in different departments or on the same level at an organization get together, their co-workers can get distracted as much as they can.

“Any time there’s a relationship,especially if it’s within a department, there’s going to be gossip,” said Evren Esen, director of survey programs for SHRM. “Sometimes people involved in a romance may not think others know, but they know, so they’re paying attention.”

In SHRM’s 2013 workplace romance study, 67 percent of respondents had heard about romance in their workforce through office gossip (Figure 2). The same study revealed that 47 percent of HR members polled didn’t permit workplace romance because of the concerns about distractions in the workplace.

That’s not to say relationships should be kept secret. When co-workers are open about their romance, the rest of their cohorts receive it better than if someone catches them on a date or kissing in the parking lot. Open communication is a way to gain trust, which can solve at least part of one of the major issues surrounding workplace love.

This is easier said than done, however. “In many cases, people don’t want co-workers to know they’re having a workplace relationship,” said Chas Rampenthal, general counsel for online law resource LegalZoom.com Inc. “Forcing people to disclose it defeats the purpose of them not wanting anyone to know. You have to balance the two things.” 

CareerBuilder’s annual Valentine’s Day workplace romance survey found in 2014 that nearly 40 percent of respondents kept their relationship with a co-worker a secret. What’s more, of the 26 percent who said they had accidentally run into co-workers while out socially with their partner, almost half pretended they weren’t dating.

Getting employees to open up starts with creating, then enforcing, the right kind of policy. As Rampenthal said, talent management has to play a balancing game.

First, discern who can be in a romantic relationship. Employees should not be allowed to date anyone who has a say in their performance reviews, salaries or promotions. Delineate whether peer-to-peer relationships are allowed, and if they are make it clear that they need to be communicated.

Rampenthal said one way to manage a relationship is to require its disclosure to HR or legal. That way talent managers can monitor whether a shift in the organization — such as a promotion or merging departments — can move an approved peer-to-peer or cross-departmental relationship into a danger zone. Most companies designate HR departments to discipline or manage workplaceromance, followed by supervisors and business unit leaders (Figure 3).

Even for permitted relationships, there needs to be clear rules of what’s allowed on company time. Public displays of affection at work, apart from being gauche, can create problems with other employees. Using resources like cell phones, computers and email accounts for personal reasons should also be prohibited.

Remember to apply policies to suppliers, customers and external business partners as well. Rampenthal tells a story of an affair between the chief accounting officer of real estate investment trust Ventas Inc. and an auditor from its accounting firm EY that led to the two companies severing ties. EY withdrew its 2012 and 2013 SEC audits of the company; rival firm KPMG stepped in.

‘It’s Not You, It’s Me’

Sometimes the worst breakups aren’t the ones between companies, but those between employees.

Even if talent managers do their job, some relationships are doomed to turn rotten. “Breakups are awkward enough when you see your ex,” Texas State’s Horan said, “but imagine seeing them at work every day.”

It’s annoying but acceptable when a jilted ex-partner tries to get in touch after a failed relationship, but when those things happen at work, it’s no longer just irritating. In fact, in some extreme cases it could be considered sexual harassment. 

Workplace Options’ Debnam said his organization requires all employees to undergo sexual harassment and bully trainingas soon as they’re hired. As he sees it, it’s not expensive to offer the training, but it’s very expensive to have a sexual harassment lawsuit — both in terms of the money lost and in the toll it takes on the organization.

For example, clothing retailer American Apparel fired CEO Dov Charney in December 2014 after allegations of sexual misconduct. According to a widely published leaked termination letter, Charney refused to participate in sexual harassment training. Because of his behavior, American Apparel’s employment practices liability insurance retention grew from $350,000 to $1 million, according to published reports, far greater than industry standards.

“The resources American Apparel had to dedicate to defend the numerous lawsuits resulting from your conduct, and the loss of critical, qualified company employees as a result of your misconduct, are also costs that cannot be overlooked,” the company’s board of directors wrote in the letter.

Not only can a poorly managed relationship lead to loss of production, but it can also contribute to the loss of talent.

“You’ve got to be aware there are going to be relationships in the workplace,” Debnam said, “and there’s nothing you can do to stop that. Be aware it’s going to happen and accept responsibility for that. If you do something proactively, you’re at least protecting your employees and yourself.”

For tips on how to handle co-workers who have gotten married, read the sidebar that accompanies this featuer here.