Human Resource Case Study 1

Equal Opportunity and the Law Non-Fraternization Polices in the Age of #MeToo

In February 2020, a jury in New York City convicted movie producer Harvey Weinstein of several criminal sex acts. To many people, Mr. Weinstein had become the personification of the #MeToo movement. In essence, the #MeToo movement aimed to bring to the surface and to publicize instances of sexual harassment and sexual assault. As with a number of the allegations against Mr. Weinstein, such instances of alleged sexual harassment and sexual assault were often tied to the employment situation. With respect to the Weinstein case, a number of the allegations asserted that the producer had taken advantage of his position as a powerful movie producer.

While cases like Weinstein's probably garnered the most publicity, there is little doubt that the #MeToo movement also sensitized many companies and boards of directors to guard against not just criminal activities but, often, consensual relationships that still violated company policies. Many companies have therefore long had non-fraternization policies prohibiting personal relationships between people who have direct or indirect reporting relationships, for example a CEO and one of his or her vice presidents. The rationales for such non-fraternization policies include avoiding perceived favoritism, and heading off the possibility that the imbalance of organizational power inherent in such relationships could lead to what might seem on its face to be consensual but is in fact less than consensual.

Given such policies, boards of directors have recently forced the resignations of a number of senior executives. For example, McDonald's Corporation CEO Steve Easterbrook recently resigned after what by many standards would have been a successful tenure as CEO. Under Mr. Easterbrook, McDonald's embarked on a new strategy emphasizing improved use of technology, reorganizing the company, and improving its menu. Under his tenure the value of McDonald's stock and McDonalds profits margins both about doubled. That notwithstanding, when the board discovered that the divorced Mr. Easterbrook was in a consensual relationship with a McDonald's employee it forced his resignation, saying that he had shown poor judgment in violating company policy against such relationships.

Discussion Questions

McDonald's Corporation is certainly not alone in having such non-fraternization policies.

• Use the Internet to identify the McDonalds policy and that of three other companies and compare and contrast the policies as well as the potential penalties attached to those policies. Can you think of a situation in which you would not have fired the CEO for violating the policy?
• Based on your research, what roles should the human resource manager play in implementing such non-fraternization policies? Why?