In a decision handed down last week, the Second Circuit reaffirmed its long-standing holding that a “paramour preference” — a situation where a supervisor shows favoritism towards one employee over another due to the existence of a romantic relationship between the supervisor and the favored employee — does not give rise to claims for sexual discrimination under either Title VII of the Civil Rights Act of 1964 or the New York State Human Rights Law. Moreover, the court also held that retaliatory acts allegedly taken in response to complaints about the existence of such a paramour relationship were similarly not actionable.

The case, Kelly v. Howard I. Shapiro & Associates Consulting Engineers, P.C., arose when Gail Kelly, the human resources manager at a family business, quit her job after lodging complaints about an affair between her brother, a vice president of the company, and another employee. Ms. Kelly alleged that the affair created a hostile work environment “permeated by sexual favoritism” and that she was the victim of retaliation by both of her brothers as a result of her complaints. The district court dismissed all of Ms. Kelly’s claims, and she appealed the dismissal of the retaliation counts.

In affirming the district court, the Second Circuit first reaffirmed that the conduct of which Ms. Kelly complained (specifically, that her responsibilities and duties were reduced in favor of the “paramour,” and that the paramour had turned in inaccurate or fabricated timesheets, took unlimited vacation time and took days off without notifying human resources, all in violation of numerous company policies) did not constitute sexual discrimination. This conduct was not discriminatory because it did not represent “widespread sexual favoritism.” In addition, any alleged discrimination Ms. Kelly suffered was not based on her gender.

Addressing the retaliation claim, the Second Circuit held that Ms. Kelly failed to satisfy two of the four elements required: that she engaged in protected activity and that the company was aware of that activity. Concerning the former, the court held that Ms. Kelly did not establish that she possessed a good faith belief that the preferences complained of were prohibited by Title VII; regarding the latter, she did not establish that the company could have reasonably understood that her complaints were directed towards conduct prohibited by that law. For this reason, the discrimination claim failed.

Notwithstanding the dismissal of Ms. Kelly’s claims, the decision does not mean that employers will never have to worry about such a claim. Rather, the court held just the opposite: “It is certainly possible to imagine how a plaintiff’s protests about a “paramour preference” scenario could amount to protected activity.” Other courts have in fact held that when sexual favoritism is sufficiently widespread it may create an actionable hostile work environment for those not involved in any such relationships.

In a world in which approximately half of all professionals have been involved in an office romance, these issues are not going away anytime soon. Office relationships, even successful ones, can result in unfair treatment of co-workers, loss of productivity, and lawsuits. Many employers have attempted to deal formally with office relationships in an attempt to avoid the types of claims made in the Kelly case. Non-fraternization policies, love contracts, and other types of employment counseling are just some of the techniques used by employers to handle office romances.

 To determine whether any of these approaches are right for you, or to better control office romances before they become office nightmares, contact:

• Sean P. Beiter (716.566.5409; sbeiter@goldbergsegalla.com)
• Caroline J. Berdzik (609.986.1314; cberdzik@goldbergsegalla.com)
• Matthew C. Van Vessem (716.566.5476; mvanvessem@goldbergsegalla.com)
• Or another member of the Goldberg Segalla Labor and Employment Practice Group.