Risk to the supervisor. If the relationship ends, the subordinate could at some point claim, under U.S. federal guidelines of sexual harassment, that the supervisor coerced her/him into the relationship. For example, the subordinate was induced or seduced with promises or threats regarding compensation, work assignments, or advancement; or they may assert that the relationship was continued unwillingly for fear of retaliation or dismissal. Thus, the company could be liable under the theory of quid pro quo sexual harassment. While this does not necessarily guarantee the subordinate will win such a lawsuit, it does ensure that the company may incur considerable expense—in addition to the harm to its reputation—defending its supervisor.
Risk to the subordinate. If a subordinate wishes to end the relationship with the boss (and break the boss’s heart, perhaps), how can he or she do that comfortably? Beyond the emotional challenge of such a prospect, the supervisor is in control of the subordinate’s reviews, salary increases, and promotions. In some instances, more subtle damage is done to a subordinate’s career, such as when a boss opts not to disclose a promotional opportunity to the subordinate for fear of losing him or her.
Risk to the company. Finally, another employee not involved in the romance could make a claim against the company, alleging that the “paramour” was receiving preferential treatment, such as better sales leads, bonuses, or an easier workload. ...
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