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Relationships between co-workers and conflicts of interest

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The recurring theme of romantic relationships between co-workers has been around the corporate world for quite some time and often leaves the field of Human Resources or even Compliance in difficult situations.

Although the pandemic caused by the SARS-CoV-2 virus challenged this trend in current times, the fact remains that people spend more time with co-workers than with their family and friends. In addition, habits and customs have evolved and the matter of diversity has become a banner defended by countless companies and organizations. Thus, the relationship between men and women began to coexist with same-sex relationships. And along with homosexuality, the concepts of bisexuality, pansexuality, transsexuality, and asexuality also gained strength.

Companies have indeed evolved greatly in the understanding that, regardless of someone's sexual orientation, qualities such as character, loyalty, competence, integrity, good conduct, etc. are much more important for any organization. And such qualities are undoubtedly not tied to sexual orientation.

The matter of fact is that, ever so often, companies are faced with new relationships between employees, and often of employees who are in leadership positions. Is it a reason for despair? Not at all. An opportunity for reflection? Certainly.

Relationships between employees are not synonymous with a threat to the business nor the work environment. It can become a problem for two particular reasons: misconduct or conflict of interest.

Misconduct occurs when one or both employees lack the necessary insight to understand that the relationship must be cultivated outside the work environment, in which the couple must exercise the expected professional posture. Love declarations and other displays of affection should be saved for off-work hours and outside the company. Acts of sexual nature should obviously not even be considered in the work environment, under penalty of discharge for cause due to gross misconduct, as provided for in the Brazilian Labor Code.

Analyzing conflict of interest is effectively more complex, especially in certain situations. The many notions of conflict of interest notwithstanding, in this specific case, it is considered as conflict of interest when secondary interests of personal nature interfere with primary interests of company loyalty. On that basis, any interference in the decision-making regarding the company by one of the employees with the purpose of benefiting their partner results in a potential conflict of interest.

Should the relationship take place between subordinates, for example, the potential conflict of interest is very clear when the superior assesses the subordinate partner's performance, when releasing resources, or when decisions are made to the benefit of the partner. The question arising in situations such as this is whether there are mitigation measures to reduce potential conflicts of interest. And the answer, for everyone's benefit, is that they do exist without implying in the mandatory termination of one or both employees.

Even in the clear example above, it is possible to mitigate the effects of a potential conflict of interests while maintaining the company's hierarchy if the person in a leadership position stops making decisions involving their subordinate partner. This generally isn't easy, considering the organizational chart and culture. Should the company's structure support this option, it might be easier to effectively transfer one of the collaborators.

On the other hand, relationships between employees from different areas produce a much smaller potential for conflict of interest. Indeed, this conflict of interest only manifests if, at some point, one of the workers make a decision which could directly or indirectly benefit their partner. Thus, when analyzing this type of situation, the company must consider potential cases and eliminate them beforehand – for example, when an employee forms a committee which will evaluate or calibrate the partner's performance, resolve the conflict by removing the worker from such committee. Naturally, there are more complex situations, such as an employee having control over certain activities in the organization including their partner with no possibility of moving one of them to another activity. Ideally, should it fit the company's structure, the control would be done by a team of two.

On the other hand, not all companies are willing to deal with such situations, preferring simply to prohibit relationships between co-workers. Such prohibition does not prevent people from falling for each other, rather creating hidden relationships with potential risks effectively higher for the business, as the company will not be aware of any potentially worrisome conflict of interest taking place in such situation. In this case the rule is discharge without cause, should the company identify employees in this condition.

What can one expect from a company that, instead of ignoring it, prefers to assess the issue from the perspective of business impact? Have ground rules! Either through a conflict-of-interest policy or through a policy establishing conduct standards in the work environment, especially regarding relationships between employees. Ground rules are much easier for employees to adhere to, including with regard to the transparency of the situation to the company, after all, having a relationship with someone, even a co-worker, is not a crime or morally reprehensible.

Thus, the company must encourage transparency in information regarding relationships, so as to adopt some measure to mitigate potential conflict of interests, if necessary. The simplest prohibition can backfire at some point!

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