Love Contracts: Good or Bad Idea?

couple reading a contract in an office
Lin Grensing-Pophal, SPHR Photo
Contributing Writer

6 minutes

Legal experts weigh in on the pros and cons of actively managing employee relationships.

The #MeToo movement is causing many employers to reconsider their views and practices related to employee relationships, specifically dating relationships and the extent to which organizations—including credit unions—should take steps to monitor or manage them.

Some have asked employees to sign consensual relationship (or “love”) contracts. Others take a hands-off approach. But in this environment, where media reports seem to crop up almost daily with new allegations of inappropriate behavior, employers that previously looked the other way are now beginning to take notice, and some are changing their minds about the role they should play in overseeing the potential impacts of office romances.

Mark Kluger is founding partner of the employment law firm Kluger Healey LLC in Fairfield, New Jersey. While Kluger has worked with clients on sexual harassment issues for many years, lately he has been focused on the topic of consensual relationship contracts. He was not a fan initially, recalling that he used to brush off the idea of relationship contracts as being an ineffective tool. But more recent interactions with clients have changed his view, he says. “When I had a client make a compelling pitch to me to try using them and it worked out a few years ago, I changed my tune. I am now a believer.”

What Are Love Contracts?

“Sometimes referred to as ‘fraternization’ or ‘anti-dating’ policies, these rules typically are designed to manage romantic relationships in the workplace,” according to SHRM (the Society for Human Resource Management, headquartered in Alexandria, Virginia). And they exist for good reason. SHRM points to research from CareerBuilder which indicates that 36 percent of employees have dated a co-worker—30 percent say they dated someone in a higher-level position than their own—and 22 percent have been involved in a romantic relationship with their boss. What could go wrong? Plenty, as recent headlines attest.

“In the #MeToo era, in which harassment claims have dramatically increased, if two employees are involved in a romantic relationship, one way for an employer to protect its legitimate business interests in maintaining a productive and efficient workplace free from harassment is to have the employees sign a love contract,” says Beth Zoller, JD, a legal editor for XpertHR.

These policies can help credit unions, their managers and their dating staff members avoid the potential for things to go sour if a relationship ends.

“The love contract will establish that the relationship is voluntary and consensual, without any type of coercion or duress, and that, if the relationship ends, the individuals will not sue the employer for harassment,” says Zoller. “The love contract also sets guidelines for appropriate and professional workplace conduct.”

In addition, she says: “A love contract can further reinforce the employer’s discrimination, harassment and conflict of interest policies and may require that the employees submit any workplace disputes to arbitration.”

For example, if a couple breaks up, and one individual then feels harassed or retaliated against by the other in the workplace, a signed love contract may require the individuals to arbitrate the dispute, Zoller explains. “However, … in the wake of the #MeToo movement, some states are prohibiting arbitration agreements that contractually require them to arbitrate sexual harassment claims.”

Regardless, Zoller concludes that signing a contract “demonstrates that the employees are aware of the employer’s sexual harassment policies and rules regarding proper workplace conduct and agree to comply. The love contract essentially memorializes the consensual nature of the relationship and protects the employer from future harassment claims in the event that the romantic relationship ends.”

Mark Kluger
Founding Partner
Kluger Healey LLC
Some employers have policies prohibiting workplace romances, but I’ve come to believe that you can’t stand in the way of love. We need policies and tools that deliver ways for people to be honest about workplace relationships, so those relationships can be managed.

What’s at Risk?

As with prenuptial agreements, employees in the first throes of a relationship may be so caught up in the positive aspects that they fail to see the potential for risk down the road. That risk, though, is real.

Kathleen Wobber, an attorney who has 25 years of experience in family and business law and represents a number of companies and high-level executives as an employment attorney, shares a recent experience representing an executive-level officer in a large company who had a relationship with a woman who was not his subordinate, but worked at a lower level in the organization.

“When he ended the relationship, she filed a sexual harassment claim, and he was ultimately forced to resign from the company,” says Wobber. “Had there been a contract in place regarding consensual relationships, the sexual harassment claim may not have happened … . Additionally, had these contracts existed in his company, HR would have had an opportunity to weigh in and let the executive know the consequences if things went wrong.”

Despite the potential benefit of such agreements, Wobber says she can see how managing them “would be a nightmare for a company HR department.” In many respects, she says, “it is simply easier for a company to have a no dating policy, effectively ignoring the realities of human relationships.”

That may not be a reasonable stance, though, says Kluger.

“Today, some employers have policies prohibiting workplace romances, but I’ve come to believe that you can’t stand in the way of love. We need policies and tools that deliver ways for people to be honest about workplace relationships, so those relationships can be managed.” In fact, he adds: “It sends a bad message to have rules against workplace romances, because those policies will force people underground. Just like Romeo and Juliet, prohibiting such relationships will end in disaster.”

A Culture of Transparency

Kluger advises a culture of transparency when it comes to relationships between employees. A consensual relationship contract provides employers with a management tool. The contract can be brief, he says, simply a signed document stating that a couple is in a consensual relationship with a promise to inform the employer if their status changes. (XpertHR provides a sample contract. Logins required.)

The notification of a status change is critical, Kluger says, because that can protect employers from claims and allow the employer to manage any behavior that could be construed as harassment after a relationship ends. If the employee doesn’t notify management that a relationship has ended, the employee can’t claim that the company did nothing to protect him or her in the event of harassment. The company can fairly say that it was never notified, Kluger explains.

However, although a contract offers a management tool to employers, employees may resent the notion of such contracts and view the process as an invasion of privacy.

What If They Refuse to Sign?

While consensual relationship contracts can be a good idea for both employers and employees, employers cannot force or compel employees to sign such contracts, says Zoller. Employers “can only suggest that it is a good idea, as it will protect everyone’s interests.” But, she adds: “Even if the romantically involved individuals refuse to sign it, the employer can still enforce its harassment policy, dating and personal relationships policy, as well as any conflict of interest policy.

“Additionally, an employer should ensure that employees continue to abide by the employer’s guidelines regarding appropriate workplace conduct,” Zoller says. 

In general, Kluger says, companies are conducting more training than ever before in the wake of the #MeToo movement and in the aftermath of Brett Kavanaugh’s Supreme Court confirmation hearings in the U.S. Senate.

“There is a great interest in gender-based issues, and employers are looking for management tools to protect themselves and reduce risk.” Consensual relationship—or love—contracts are a good example.

Lin Grensing-Pophal, SPHR, is a freelance writer and human resource management and marketing communication consultant in Chippewa Falls, Wisconsin. She is the author of The Everything Guide to Customer Engagement (Adams Media, 2014) and Human Resource Essentials (SHRM, 2010).

CUES Learning Portal