If your sister is pressuring you to hire your nephew for that much-coveted summer internship position so he can get his “foot in the door,” don’t give in to temptation. Nepotism, the hiring of family members, is not a recent societal development. The term originated in the Middle Ages when popes and bishops assigned important church positions to their nephews (from the Italian, nepotismo). The word is almost always used in the pejorative sense and with good reason.

As discussed below, the practice of nepotism creates immediate legal exposure creating unnecessary risk for your business. The hiring of friends may do the same, especially if the “friend” is or becomes the romantic interest of his or her supervisor over the term of employment.

What Are the Dangers of Hiring Friends and Family in the Workplace?

While there are few laws and regulations preventing nepotism in non-government businesses, there are laws against discrimination. Risk peaks where discrimination and nepotism cross paths.

So, what’s the big deal?  Decisions not based on performance and/or job duties can provide a disgruntled employee with grounds for a discrimination lawsuit under Title VII of the Civil Rights Act (protecting race, religion, sex, age, and national origin) and/or under the Equal Pay Act (“EPA”).  

How? People are fallible and emotions run high in the workplace, even absent friend and family issues, especially where money is involved. Familial relationships necessarily carry a lifetime of history and baggage which become part of the decision-making mix, like it or not. No matter how much a manager may strive to be objective in deciding on how raises and promotions are allocated, she may see her family member through rose-colored glasses or quite the opposite. She may see a family member as that goofy uncle the family jokes about who could turn gold to hay in any given situation.

For example, if a manager, under pressure from her sister-in-law, decides to give her nephew a bump in salary because she knows the nephew is saving to buy himself a car, such a decision immediately creates exposure for the company.

If the nephew is a male caucasian file clerk, and his co-worker is a female caucasian file clerk, and they are performing exactly the same duties and have the same job title, but the male is being paid more, the supervisor has unintentionally created twin causes of action under Title VII and the EPA.

The issue is even more volatile when a supervisor hires or promotes a friend with whom he or she is romantically involved. Newspapers and magazines are full of stories of plaintiffs awarded thousands in sexual harassment lawsuits when formerly good relationships go south in the workplace.

How Can I Protect My Business from the Inherent Risks Involved with Nepotism?

1. All hiring and promotion decisions should be competence-based. Human resources departments should craft detailed job descriptions annotated with the education and experience necessary to perform the essential job functions. Decision-making should begin with panel interviews to weed out unqualified candidates in the first round and spread the responsibility for decision-making. Interview notes and ratings justifying hiring and promotion decisions should be maintained in the hiring records so that the company can easily prove that every decision is rationally based on objective job requirements and unbiased evaluations.

2. Consider creating a policy prohibiting nepotism in the workplace. Many companies take the family pressure off of managers by simply making and consistently following a company policy that hiring managers cannot hire relatives.

3. Consider maintaining a company policy that prohibits managers from supervising any company worker with whom he or she has a personal relationship.  When such relationships develop, allow your human resources professionals to handle the situation and to make the appropriate changes according to objective company policies.

4. Encourage employee engagement with your human resources department. Conduct frequent anonymous employee surveys about workplace issues and concerns to keep your finger on the pulse of challenges that may be simmering in the workforce. Make certain that you hire professional, qualified HR employees who understand discrimination laws, proper competence-based hiring structures, and the psychology of motivating employees.

Wells Law, LLC is here to assist you in the development of cost-efficient, compliant policies and procedures for your professional practice or business. Click on the hyperlink to contact us or to learn more about the services we can provide to reduce risk for you and your business.

Need more information about hiring your friends? Join us for our upcoming supervisor workshops! Click on the image for more information.