A supervisor’s romance with a subordinate isn’t illegal in California, and a single promotion handed to a partner usually isn’t harassment. The California Supreme Court drew that line in Miller v. Department of Corrections, holding that a claim exists when “widespread sexual favoritism was severe or pervasive enough to alter” working conditions. The bigger risks come later. A breakup can turn into a harassment claim, and a company that knew about the relationship and did nothing has trouble defending either one.
Can a California employer restrict office dating?
Yes, at least for supervisors and the people who report to them.
The leading case is Barbee v. Household Automotive Finance Corp. (2003) 113 Cal.App.4th 525. A national sales manager was fired after he kept dating a member of his sales force. His company’s conflict of interest policy required supervisors to report relationships with people in their chain of command. He sued for invasion of privacy and wrongful termination, and the Court of Appeal affirmed summary judgment for the employer.
On privacy, the court held that the manager “did not have a reasonable expectation of privacy in pursuing an intimate relationship” with his subordinate. The written policy and the CEO’s warning that dating within the company was a bad idea mattered. They gave him advance notice, which further reduced any expectation of privacy.
He also argued that Labor Code section 96, subdivision (k) protected his off-duty conduct. That subdivision lets the Labor Commissioner take claims for lost wages from discipline “for lawful conduct occurring during nonworking hours away from the employer’s premises.” The Barbee court rejected the argument, holding that subdivision (k) “does not set forth an independent public policy that provides employees with any substantive rights.”
Barbee is a supervisor case. A blanket ban on dating between peers in different departments is a harder sell, because the employer’s conflict-of-interest rationale gets thin. The safer policy targets relationships inside a reporting line and requires disclosure instead of forbidding romance outright.
When does favoritism toward a partner become sexual harassment?
When it’s widespread enough to change the working environment for everyone else. One instance of a manager favoring a partner isn’t enough.
Miller v. Department of Corrections (2005) 36 Cal.4th 446 involved a prison warden who carried on affairs with three subordinates at the same time over several years. The women received promotions and favorable treatment, and the affairs were common knowledge. Two other employees sued under the Fair Employment and Housing Act (FEHA).
The Supreme Court followed an EEOC policy statement that, as the court described it, says “isolated instances of sexual favoritism in the workplace do not violate Title VII.” Widespread favoritism is different. The court held that “an employee may establish an actionable claim of sexual harassment under the FEHA by demonstrating that widespread sexual favoritism was severe or pervasive enough to alter his or her working conditions and create a hostile work environment.”
The decision also gives employers some useful limits. The court said “the presence of mere office gossip is insufficient” to prove widespread favoritism. What carried the plaintiffs past summary judgment was hard evidence: admissions by the people involved, eyewitness accounts of conduct at work, repeated promotions, and the department’s own internal affairs findings.
That last point is the one employers should remember. The court called it “ironic” that the defendants wanted to keep from the jury evidence “that the Department itself found convincing.” An investigation that confirms favoritism and then leads to no corrective action is close to the worst record an employer can build.
Is the company liable if a supervisor’s relationship goes bad?
Often, yes. Under FEHA, a company is strictly liable for sexual harassment by its supervisors.
Government Code section 12940, subdivision (j)(1) sets a knew-or-should-have-known standard for harassment by coworkers. It says nothing comparable for supervisors, and in State Department of Health Services v. Superior Court (2003) 31 Cal.4th 1026 the Supreme Court read that gap to mean “an employer is strictly liable under the FEHA for sexual harassment by a supervisor.”
The same opinion contains a footnote that matters for workplace romance. The court wrote that the employer “is not strictly liable for a supervisor’s acts of harassment resulting from a completely private relationship unconnected with the employment and not occurring at the workplace or during normal working hours.” It added that such cases “must be rare.”
A breakup between a manager and a direct report is rarely that clean. The texts after the breakup go to a work phone. The schedule changes. The performance review comes three weeks later. Each of those connects the relationship to the job, and the former partner’s lawyer will argue the relationship was never fully voluntary in the first place, given the power gap.
State Department of Health Services also gives employers a damages defense. Under the avoidable consequences doctrine, a plaintiff who unreasonably failed to use an effective complaint procedure can’t recover damages that a timely complaint would have prevented. The defense reduces damages but doesn’t defeat liability, and it only works if the company had a real complaint process that employees knew about.
What should the company do when it learns about a relationship?
Separate the reporting line, document that the relationship is consensual, and keep treating both people fairly.
| Situation | Main legal exposure | What usually decides it |
|---|---|---|
| Supervisor dating a direct report | Quid pro quo harassment, and strict liability if it sours | Whether the reporting line was changed and both parties confirmed the relationship is voluntary |
| Supervisor favoring a partner in one decision | Usually none under Miller | Whether the decision was isolated and has a documented business reason |
| Repeated favoritism that coworkers see and resent | Hostile work environment under Miller | Admissions by the people involved and what any internal investigation found |
| Peer relationship between coworkers | Coworker harassment after a breakup | Whether the company knew and took immediate corrective action |
| Employee fired for violating a dating policy | Privacy and wrongful termination claims | Whether the policy was written and tied to a conflict of interest, as in Barbee |
Many companies ask both people to sign a short acknowledgment confirming the relationship is voluntary and that each knows how to report harassment. It isn’t a waiver, and it won’t stop a later claim. It does make it harder to argue later that the relationship was coerced from the start.
Be careful about who gets moved. If the company reassigns the subordinate, cuts her hours, or moves her to a worse shift while the manager stays put, the reassignment itself can look like sex discrimination or retaliation. Moving the supervisor is usually the cleaner choice.
The FEHA’s prevention duty applies throughout. Section 12940 says, “An entity shall take all reasonable steps to prevent harassment from occurring.” A disclosure policy that HR actually enforces is part of meeting that duty.
Steps to take once a favoritism or relationship claim arrives
- Put a litigation hold on the records: both personnel files, any relationship disclosure or acknowledgment, the promotion and scheduling decisions at issue, internal investigation files, and emails and texts on company systems and work phones.
- Calendar the deadline on the CRD complaint, EEOC charge, demand letter, or summons. Check for an arbitration agreement and for an employment practices liability (EPLI) policy that requires prompt notice.
- Identify the decision-makers and the coworkers who saw the conduct. Stop any change to the complaining employee’s job that could look like retaliation, and make sure the supervisor involved has no role in it.
- Pull the documents the claim turns on: the dating or conflict of interest policy and every version of it, the anti-harassment policy and training records, and the paperwork behind each promotion or assignment the plaintiff says was favoritism.
- Talk to a lawyer before responding, interviewing the supervisor, contacting the employee or their lawyer, or offering anything to settle.
Favoritism claims usually rise or fall on what the company knew and when, so the internal record carries most of the weight. Experienced employer defense in California employment cases starts by reconstructing that timeline from the company’s own documents.
FAQ
Can we fire an employee for dating a coworker?
Sometimes. Barbee upheld a termination of a manager who kept dating a subordinate after being warned, under a written conflict of interest policy. Firing someone for dating a peer in another department is riskier, because the conflict rationale is weaker and privacy claims get more traction. A written policy, advance notice, and even enforcement across men and women make any termination easier to defend.
Is a single promotion given to a supervisor’s partner sexual harassment?
Usually not. Miller relied on the EEOC’s position that isolated instances of sexual favoritism don’t violate Title VII, and it required widespread favoritism severe or pervasive enough to change working conditions. A passed-over employee may still claim the decision was discriminatory for other reasons, so the company should be ready to show the business reasons for the promotion.
Do we have to investigate rumors of a supervisor’s relationship?
Rumors alone don’t prove anything, and Miller said mere office gossip isn’t enough to show widespread favoritism. But FEHA requires employers to take all reasonable steps to prevent harassment. Once a credible report reaches HR, a quiet, documented inquiry is safer than ignoring it, above all when the relationship crosses a reporting line.
Does a relationship acknowledgment protect the company from a later harassment claim?
It helps but doesn’t end the case. The acknowledgment is evidence that the relationship began voluntarily and that both employees knew how to complain. It doesn’t cover harassment that happens after a breakup, and it doesn’t waive FEHA rights. Its main value is in a later dispute over whether the relationship was coerced from the start.
If a relationship or favoritism claim has been filed
If your company has received a CRD complaint, demand letter, or lawsuit claiming favoritism or harassment tied to a workplace relationship, the internal record of what the company knew and did usually decides the case. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including claims involving workplace relationships and sexual favoritism. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
The decisions are Miller v. Department of Corrections (2005) 36 Cal.4th 446; State Department of Health Services v. Superior Court (2003) 31 Cal.4th 1026; and Barbee v. Household Automotive Finance Corp. (2003) 113 Cal.App.4th 525. The statutes are Government Code section 12940 and Labor Code section 96.
This post is general information about California and federal employment law as of November 7, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.