Can Businesses Enact Anti-Nepotism Rules?

Can Businesses Enact Anti Nepotism Rules? image NepotismCan Businesses Enact Anti Nepotism Rules?

As frustrating as it may seem, nepotism – favoring friends and family – is not illegal in most cases. Promoting or hiring family members is perfectly acceptable, even if the individual is less qualified than other employees. While the public sector is open to much more scrutiny, private sector businesses retain the right to hire and fire whomever they please. While the promotion of a boss’ family member may be annoying, it’s not illegal.

There are, however, several factors to consider when relatives work in the same company. Although nepotism itself doesn’t violate any laws, discrimination does. If members of a business owners’ family are being hired exclusively, and are all of one religion, ethnicity, or gender, the company could be unfairly discriminating against other workers. Businesses must ensure that, while who they hire is up to them, they are not making decisions based solely on factors that could be grounds for legal action. Using national origin as a basis for hiring is also prohibited by federal law. While you can hire someone because they’re related to you, you can’t choose not to hire someone because they are of a certain nationality. The key is in your intention and the justification for making your decisions.

While nepotism is allowed by law in the U.S., many companies still choose to enact their own anti-nepotism or anti-spouse policies. In general these are company-wide policies that restrict employees from working with family or husbands and wives. No-spouse rules in particular have become increasingly common and are often brought in to ensure favoritism – or merely accusations of it – is avoided. A situation where one spouse chooses to promote another could easily be perceived as unfair and lead to problems at work; thus, some companies prohibit the hiring of spouses or close family members of current employees. While some have argued that this imposes limitations on an individual’s basic right to marry, businesses generally respond that the rules say nothing about marriage – they simply affect employment.

A no-spouse or anti-nepotism policy must be carefully handled. Firstly, of course, it must be applied fairly and across the board. From the company owner to the newest employee, all must be equally affected. Twenty states have laws specifically prohibiting employers from hiring or firing a worker because of his or her marital status. The most complicated situations involve cases where two employees marry, creating a paradox – you can’t fire someone for getting married, but no-spouse policies mean they shouldn’t work together. A case in Hawaii involving hotel staff in this exact situation saw the state’s Supreme Court reinstate one employee who lost their job. The ruling noted that employees who cohabit would never be fired, and as such, it was illegal to take action simply because they were married.

So, what if an employee’s spouse joins the company?

One solution to this problem would be to transfers the current employee to another department. It is always better to adapt than to risk an unfair termination lawsuit and there’s nothing inherently problematic with spouses working side-by-side – rather, the possibility of a conflict of interest makes many businesses wary. If family members will have nothing to do with each others’ work, and have no say in promotions or project leadership, then companies may be far more accepting of these individuals working together.

Treated carefully and with adequate legal advice from a qualified attorney, companies can enact workable policies to ensure that fairness and cooperation remains the focus of their business. Individual cases are always different, and it’s human nature to want to help those we know. This is fine, as long as you stay the right side of the law.

Image via Shutterstock

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