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McDonald’s Fires CEO over Office Romance – How to Navigate the Not-So-Rosy Waters of Office Romances

McDonald’s Fires CEO over Office Romance – How to Navigate the Not-So-Rosy Waters of Office Romances

By December 14, 2019March 4th, 2022No Comments

We spend long hours at our workplaces. That, coupled with plenty of social time at happy-hours, retirement parties and team-building social activities, makes workplaces optimal environments for relationships to flourish, be they platonic or romantic. Office romances are inevitable.

The legal implications of engaging in an office romance, however, are complicated. There are important consequences that employees and employers should understand when faced with an office romance, depending on the nature of the relationship and the employer’s policy. 

Nature of the Relationship 

Recently, Mcdonald’s fired its CEO over a relationship he was having with an employee. The board of directors fired Stephen Easterbrook on November 1, 2019, after concluding he had violated the company’s policy against manager relationships with directly or indirectly reporting employees. In a post-#metoo world, employers are hyper-sensitive to relationships where there is an endemic imbalance of power. The reality is that many employees may feel tacitly compelled to “go along” with the romantic advances of their supervisors and managers for fear of retribution. Gauging whether the less powerful employee truly consents to the relationship can be difficult. Accordingly, these relationships can be exploitative and abusive and are rife for sexual assault and sexual harassment

For this reason, many corporations will have explicit policies and rules prohibiting “C-Suite” executives from engaging in a romantic relationship with direct or indirect reports. If the employer has such a policy, the employee is generally under an obligation to follow it, along with all other policies, so long as the policy is “reasonable, unambiguous, well-published, consistently enforced, and [the employee must know] or ought to have known of [the policies’ contents], including the consequences of breach”: Foerderer v Nova Chemicals Corp2007 ABQB 349 (CanLII) at para 67. If a senior manager fails to abide by such a policy and engages in an office romance with an employee, he or she can be dismissed with cause, meaning the employee will not be entitled to severance pay. If the senior manager engages in such a relationship and fails to disclose it, courts have deemed such conduct as sufficiently dishonest and deceptive to warrant ‘with cause’ dismissal (Smith v Vauxhall Co-Op Petroleum Limited, 2017 ABQB 525). 

Notwithstanding the above, some companies chose to adopt “non-fraternization” policies, which forbid office romances for ALL employees, regardless of their managerial status. Such policies have proven to be ineffective and can even be counterproductive. 

As some employers have found, a more effective means of mitigating the risks associated with office romances is having a policy requiring employees to disclose them when they first materialize. Relationships in which the employees are on equal professional footing can garner less adverse legal consequences, provided the employees are forthcoming. Such disclosure policies address the main concerns involved, including the consent of both parties, and the underlying conflict of interest challenges the relationship may encroach on and how to avoid such conflicts. 

Where employers are silent on office romances (i.e. the employment contract does not address the subject, nor does the company’s policies and procedures manual), employees still have legal duties to disclose such relationships. Employees have common law obligations that apply as implicit terms of the employment relationship. Implied in every contract of employment as a matter of law is a general duty of good faith and fidelity. The essence of the duty of good faith and fidelity is the requirement that an employee acts honestly and faithfully during the term of employment, meaning that an employee must always put the employer’s best interests first and avoid any conflicting personal interests. In almost all scenarios, an office romance will likely engage conflicting personal interests. 

Accordingly, disclosure of an office romance is required by the common law, irrespective of whether the employer has a policy addressing the issue. 

In sum, as an employer, avoid overly onerous restrictive policies. A disclosure policy sufficiently mitigates the foreseeable risks. As an employee, disclosure is the name of the game and will protect against allegations of breaching a duty of good faith and fidelity or a contractual duty to avoid conflicts of interest.

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