Romance with supplier: Conflict of interest?

It has recently come to our attention that one of our managers might be involved in a romantic relationship with a woman who works for one of our suppliers

Colin Gibson
Question: It has recently come to our attention that one of our managers might be involved in a romantic relationship with a woman who works for one of our suppliers. This manager has direct say in what supplier we choose, and has a good deal of latitude in determining how much business our suppliers receive. How should we proceed? Can we simply confront him? We don’t have any concrete proof, but one of our employees (not in his department) saw the two at a movie theatre and they were acting like a couple.

Answer: All employees have a duty of fidelity that requires them to avoid placing themselves in a position where their personal interests conflict with the responsibilities they owe to their employer. Where an actual or potential conflict arises, the employee should disclose it to the employer as promptly as possible, so proper steps can be taken to address the situation.

Workplace romances can be difficult to deal with, because of the privacy rights of the employees involved, as well as challenges associated with defining when a relationship has reached the point where grounds for concern exist. Also, the human rights legislation in most Canadian jurisdictions prevents employers from discriminating against employees on the basis of marital or family status, absent a bona fide occupational requirement.

If an employee’s relationship with another individual (such as a subordinate, supplier or customer) may impair or conflict with the employee’s ability to discharge his employment duties faithfully and diligently, then a conflict of interest may be found to exist. For an employee’s private relationship to become an employment-related issue, however, there must be clear and proper grounds for the employer to conclude that such relationship may conflict with or prejudice its legitimate business interests.

In this case, your organization has grounds to be concerned about a potential conflict of interest, given the degree of influence the manager exercises over the choice of suppliers. If the manager has commenced a romantic relationship with the supplier, this may impair his ability to discharge his duties objectively and faithfully.

Having said that, the situation must be approached with sensitivity, with due regard to the interests of all concerned. A good starting point would be to discuss the situation with the manager to identify your concerns, and make sure he understands his obligations to disclose and avoid conflicts of interest. Through those discussions, you may be able to address the conflict if one exists (for example, by reassigning part of the manager’s duties) or perhaps satisfy yourselves there is no cause for concern.

Many employers find it useful to have a conflict-of-interest policy in place, so all employees clearly understand their obligations in this area.

Colin G.M. Gibson is a partner with Harris & Company in Vancouver.
He can be reached at [email protected] or (604) 891-2212.

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