MLR

Romance at work: Can it increase chance of fraud?

Categories:

The workplace today seems to be what singles bars and fitness clubs were in earlier decades – a good place to meet someone for a romantic relationship.

rose and handcuffs

Employees spend so much time at work that it is inevitable co-workers will sometimes begin a romantic relationship and perhaps even fall in love.

We all know happily married couples who met at work and continued to be successful at their jobs.

But office intrigues bring certain risks to the workplace – both when relationships blossom and after they go bad.

Among these is an increased risk for fraud. Consider the following scenarios.

Blackmail. Manager “A,” who is married, starts an affair with employee “B,” who is under her in the chain of command. This is strictly against company policy, so they keep it a secret. Or so they think.

Manager “C” finds out about their liaison. C now has powerful leverage over A in that he can reveal the affair either to senior management or to A’s spouse if A doesn’t submit to his demands. Those demands might be for money; for undeserving favors, including promotion or access to information and resources; or for turning a blind eye to some other form of fraud.

If the romance takes an unhappy turn, B might also make these kinds of demands. But the blackmailer doesn’t even have to be a co-worker. It could be A’s or B’s erstwhile friend or lover, A’s spouse, or just about anybody who has an inside track on what is going on.

Leaks of sensitive information. Leaks of trade secrets, confidential data about clients or other sensitive information can arise from intimate workplace relationships, either willingly or through deceit.

Lovers are known to let their guards down with each other, especially at amorous moments. The possessors of sensitive information might have it pried from their lips, hands or briefcase with their acquiescence, or have it lifted while their back is turned.

Theft. Theft or embezzlement of many varieties is often easier to get away with when there is a clandestine accomplice.

Potential abuses include one employee committing a fraud while the other authorizes it. This can occur in any number of ways, including overstated expense reports, work hours, payroll, payment to vendors, customer returns, etc.

When the perpetrators have a relationship, there is also someone to cover their back, and possibly provide an alibi.

Steps to prevent these kinds of fraud

As a solution to these types of risks, some employers try to prevent all workplace romance. But that’s not very practical, and it can hurt employee morale and retention. Here are some better remedies:

  • Put into place a policy that prohibits intimate relationships when there is any potential conflict of interest or breach of security. This should include a prohibition of relationships between managers and anyone in their chain of command. It should spell out the consequences for a breach of policy “up to and including termination.”
  • Often, as relationships end, destructive emotions arise and good sense declines. Remember the astronaut driving 900 miles wearing diapers? Beef up your harassment policy to include a prohibition on any kind of vendetta against a former lover. Encourage victims of harassment to report it, and assure them that they won’t be penalized if they haven’t done anything wrong. Then investigate vigorously, and act decisively on your findings.
  • Communicate these and related policies to all employees upon hire and at least annually thereafter.
  • Train managers on how to respond when they know or suspect a policy is being violated.
  • Have a reporting procedure for suspicion of any kind of fraudulent activity, including those above. Allow whistleblowers the option of anonymity.
  • Assign responsibility for investigation of these reports, and fully train those responsible on how to fulfill their roles.
  • Follow general best practices for fraud prevention and detection.

To some extent, workplace romances are unavoidable. Your guiding principle should be to spell out and restrict those behaviors that have a high potential to harm the organization, while otherwise allowing employees their freedom.

(This is not a comprehensive review of the subject. Employers are advised to seek appropriate legal counsel before changing or implementing new policies.)