As employees spend more time at work, office romances remain a strong presence in companies throughout the United States. A 2006 Workplace Romance Study by the Society for Human Resource Management and found that 40 percent of employees polled had been romantically involved with another employee at some time during their employment. Despite the prevalence of office romances, the same study revealed that more than 70 percent of responding companies did not have a formal policy regarding workplace romances; only 9 percent banned relationships among its employees outright.

This study illustrates the dilemma faced by employers. Short of banning office romances entirely, which is a difficult policy to enforce and undesirable in most workplaces, employers that learn of an office romance might still need to take steps in an attempt to avoid liability. The greatest concern arises when there is a relationship between a supervisor and a direct subordinate. But even a consensual affair between individuals without such reporting relationships can lead to claims of sexual harassment and unlawful retaliation. Thus, employers must engage in a balancing act: acknowledging that social relationships between employees inevitably occur and recognizing their legal accountability for preventing unlawful discrimination and harassment in the workplace.

Some employers are relying on consensual relationship agreements known as “love contracts” to achieve that balance. While some might question the practical application of this response, many are concluding that it is beneficial to have such agreements in the litigious workplace environment of corporate America. Although untested in the courts, love contracts address the potential for employer liability by including provisions that focus on the nature of the employees’ relationship. These agreements also have the salutary effect of prompting a conversation between human resource personnel and the amorous employees about the employees’ relationship, and reminds human resources of their continuing obligation to stay alert for instances of sexual harassment or favoritism.

In executing a love contract, the employees engaged in the relationship voluntarily sign a written agreement acknowledging that their relationship is consensual and unrelated to their employment at the company. The employees typically acknowledge their awareness of their rights and obligations under the company’s workplace harassment and discrimination policies, as well as the procedures for reporting discrimination claims. This makes it clear that the employees have a copy of the policy, and are at least on constructive notice of its contents.

Love contracts can also lessen the potential for favoritism that could give rise to a claim by an employee not involved in the romantic relationship. The agreement should inform the employees that the company intends to treat claims of favoritism as seriously as other forms of sexual harassment, and will conduct a prompt and thorough investigation into such claims. The employees should also agree not to participate in company decision-making processes that could affect the other employee’s pay, promotional opportunities, performance reviews, hours, shifts or career.

While seemingly at odds with employee privacy, love contracts can establish basic ground rules for a workplace romance where employers have seen real liabilities. In the face of such exposure, employees are simply asked to agree to maintain professional behavior while at work. The agreement can also inform the employees of prohibited actions should the relationship sour; employees agree that they will respect the other’s decision to end the relationship and not engage in any conduct that could violate the company’s antiharassment policy.

Some employers seek to utilize love contracts even for those relationships between supervisors and subordinates. In the supervisor’s agreement, the supervisor states that he has been informed of the personal legal liability that could be associated with romantic involvement with a subordinate. The supervisor should acknowledge that he did not engage in quid pro quo sexual harassment by making the relationship a condition or term of the subordinate’s employment.

Counsel then tailor the subordinate’s agreement to demonstrate that the subordinate understands his or her rights under the company’s antiharassment policy, as well as state and federal law. The agreement should explain the meaning of quid pro quo sexual harassment such that the subordinate admits that entering into the relationship with the supervisor was not made a condition or term of employment. The subordinate should also agree to inform the employer if he or she experiences any negative consequences so that the employer may take corrective action; if acted upon, this clause can help provide an affirmative defense to vicarious liability under the Supreme Court’s Faragher/Ellerth holdings.

Finally, in any situation involving an office romance, the agreement should contain other clauses that would assist the employer should it subsequently face adversarial action stemming from the romantic relationship. The agreement can provide that any issue related to the office romance must be submitted to alternative dispute resolution. The agreement should clearly state that it is not to be construed as the employer’s approval or sanctioning of the relationship. It is also wise for the employer to reserve the right to make all appropriate and necessary decisions regarding its reporting structures to prevent any real or perceived impropriety or conflicts of interest.

In essence, love contracts provide employers with a new way to protect against exposure to discrimination, harassment and related claims. The agreements provide employers with a reasonable basis to argue that they took not only appropriate, but proactive steps to provide a workplace free of discrimination or harassment in any future legal proceedings. As suggested, the agreements should be presented for signature on a voluntary basis. While a love contract is no substitute for vigilance in upholding the company’s antiharassment policy, it can help maintain a professional office environment while safeguarding against future liability.