Steve Easterbrook’s exit
After the recent headlines of McDonald’s boss Steve Easterbrook’s exit from the company over a relationship with an employee, and in anticipation of the alcohol-fuelled Christmas work party season that is fast approaching, this is an ideal time for employers to consider, and possibly re-evaluate, their position on intimate relationships in the workplace.
Removal of CEO
The BBC reported that Mr Easterbrook had been “fired” from the US fast-food giant after it came to light that the former CEO was in a consensual relationship with an employee. Mr Easterbrook, who held the position of CEO from 2015 to late 2019, admitted that he had “violated company policy” and had demonstrated “poor judgement.”
Whilst Mr Easterbrook is endorsed as having rejuvenated McDonald’s menus and restaurants and the value of McDonald’s shares has more than doubled during his leadership, the company took a firm stance against his personal relationship with an employee. This is because McDonald’s company rules for managers reportedly prohibit them from becoming romantically involved with a subordinate.
Whilst this appears relatively straightforward, this policy does invite complications where employees in a similar level meet in the workplace, become romantically involved and then one receives a promotion to managerial status – fast food for thought?
Is that policy unusual?
Mr Easterbrook isn’t the only one to have lost his position as a result of a consensual relationship in the workplace. In 2018, Intel head, Brian Krzanich, reportedly resigned after having a consensual relationship with an Intel employee; this was also reported to be against Intel’s company policy.
Workplace festivities and vicarious liability
Workplace relationships can blossom at any time, but they are sometimes the consequence of Christmas party celebrations. Whilst alcohol, merriment and employees often result in a fun-filled, celebratory evening which could be a form of team building, these key ingredients can also be a recipe for workplace disaster.
Contact our Employment and Immigration team now.
Whilst the above case studies refer to consensual relationships in the workplace, the festive season can, unfortunately, give rise to interpersonal conduct that is not appropriate or consensual, and which amounts to gross misconduct.
An employer’s policy regarding this, and the well-documented, procedural steps an employer takes to prevent this kind of conduct, is of paramount importance. Having a clear policy on workplace conduct provides certainty, ensuring that everyone knows what is expected of them. Employees should be left with no doubt as to what conduct is unacceptable.
A wise employer will also have the relevant policies and procedures in place to protect themselves against being held vicariously liable for the wrongdoing of an employee.
Vicarious liability is a form of secondary liability and, particularly in January following the festive season, employers can find themselves facing claims or dealing with grievances from employees who contend that their employers are vicariously liable for the actions of colleagues.
Whether vicarious liability arises involves a two-stage test:
1) Is there a relationship between the primary wrongdoer (i.e. the aggrieved employee’s colleague) and the person alleged to be liable (i.e. the employer) which is capable of giving rise to vicarious liability?
(NB: a standard employment relationship will generally meet this requirement).
2) Is the connection between (a) the relationship between the aggrieved employee’s colleague and the employer alleged to be liable, and (b) the wrongful act or default of the aggrieved employee’s colleague, such that it is just and reasonable to hold the employer legally responsible to the aggrieved employee for the consequences of the wrongdoer’s conduct?
Whilst employers can seek to defend claims of vicarious liability, it is prudent to have the right policies and procedures in place, to safeguard the business from dealing with such claims which can inevitably lead to costly and time-consuming litigation.
Vicarious liability claims can also arise in unexpected ways – one of our team has dealt with a complaint from a security guard who said he was traumatised after happening upon a rather-too-amorous couple who had come back to the office board room after the party ended.
- Consider your position on workplace relationships. Is there a commercial or operational reason for your position to be against such a relationship? If so, is this a blanket approach for all employees or do you wish to differentiate, as McDonald’s allegedly does, between managers and subordinates?
- Implement a workplace relationships policy, clearly setting out your position, either as a stand-alone policy or as part of the staff handbook, ensuring that it is presented to all new starters and readily accessible to all employees at all times (e.g. accessible via the staff intranet or upon request to HR).
- If workplace relationships are strictly not permitted for particular employees (e.g. senior management and/or directors) consider adding a clause to this effect in their employment contract or director’s service agreement. This affords the employer the ability to terminate the employment relationship more easily if the manager or director breaches their contractual obligations in this way.
- Consider whether, for more junior employees, you will require them to disclose workplace relationships to their line managers.
- Issue written guidance on expected conduct at a Christmas party (re-affirming what’s expected of employees generally), remind employees that such conduct could be treated as a disciplinary matter and re-circulate the company’s policies on workplace relationships, disciplinary/conduct, bullying/harassment and equal opportunities (if you have these in place – if you do not, you should consider implementing such policies).
- If you will be paying for drinks, consider issuing free drink tokens to employees, as opposed to operating an open bar. Whilst employees are still able to pass around tickets, this does prevent, so far as is reasonably possible, employees drinking too much alcohol and behaving inappropriately and/or aggressively whilst under the influence.
- Remind employees not to drink and drive. Employers could depending on the size of their workforce and those attending a Christmas party, arrange for taxis or coach hire to chauffeur employees to/from the party venue.