Consult Attorney Before Intervening in Office Affair
TEC Worldwide is an international organization of more than 7,000 business owners, company presidents and chief executives. TEC members meet in small peer groups to share their business experiences and help one another solve problems. The following questions and answers are based on discussions at recent TEC meetings in Southern California.
Question: It was recently brought to my attention that my vice president of sales is having an affair with one of our sales reps. No big deal, except he is married with three children. Also, the sales rep (who is single) reports directly to this VP. So far the affair hasn’t caused any overt problems, but I fear that it might become a big distraction to others. I’m also worried about their (and the company’s) reputation if word gets around. I feel like I need to intervene somehow, but both are outstanding employees and I don’t want to lose either one. What should I do?
Answer: Talk about your powder keg issues! In the old days (pre-1990s), the easiest thing to do would have been to look the other way and let the affair run its course. But in today’s highly litigious environment, where sexual harassment lawsuits can cost employers large amounts of money, you can’t afford not to protect yourself and your company.
In addition to the legal considerations, there are several other issues to consider, not the least of which is your own sense of morality. As the business owner, how does the affair sit with you? Is this the kind of behavior you want from your employees? If your employees know that you know and you don’t take any action, what kind of message does that send to the rest of the organization?
Then there’s the area of job performance. Is the affair affecting either person’s ability to get the job done? And what about the reporting relationship? Given that the sales rep reports directly to the VP, even the perception of favoritism can cause major problems.
Finally, do you have a policy in place that addresses issues such as dating or fraternizing among employees or between employee or supervisor? If so, does the behavior appear to violate the guidelines?
Before you do anything, says Tim Toomey, who owns Southern California Graphics in Culver City, run to a top-notch labor law attorney and get advice from someone qualified to assess the situation.
“Do not fire, discipline or even raise the subject with either person until you understand your potential liabilities as well as your rights, duties and obligations as a business owner,” he said. “In particular, find out whether your liability increases now that you have knowledge of the situation.”
Seth Krugliak, chief executive of Five Guys Named Moe in North Hollywood, recommends checking with your insurance broker to make sure you have adequate insurance to cover sexual harassment.
“If the affair goes bad, the sales rep can cause serious problems by filing a sexual harassment lawsuit,” he said. “You need to approach this as a risk-management issue in order to protect your company.”
To forestall potential performance problems and avoid any appearance of impropriety in the reporting relationship, Patti Regan, president of the Los Angeles-based Regan Group, suggests transferring the sales rep to another department or to another supervisor within the department.
However, make sure the transfer does not involve a demotion, loss of compensation or loss of future promotional opportunities.
If you don’t already have a policy in your employee manual, Solomon Aryeh, president of SMG Stone in Sun Valley, suggests creating one that specifically deals with these kinds of situations.
“Obviously, you can’t retroactively apply it to this situation,” he said, “but it will provide much-needed guidance and direction should something of this nature occur again.”
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If there is a business issue you would like addressed in this column, contact TEC at (800) 274-2367, Ext. 3177. To learn more about TEC, visit https://www.teconline.com.
