The recent scandal involving US company Astronomer CEO Andy Byron and Head of HR Kristin Cabot, reportedly in an affair, has sparked headlines. But behind the Tik Tok investigations and memes, this incident prompts important enquiries.
Can employers regulate employees' private lives? When does a personal relationship become a professional liability? How far should companies go to avoid potential reputational harm arising out of workplace relationships?
Under New Zealand law, there is no general ban on consensual relationships at work. The Employment Relations Act promotes good faith and mutual trust between employer and employee, and does not extend into the personal domain without justification.
Similarly, the New Zealand Bill of Rights Act 1990 protects individual privacy and freedom of association, meaning employers must tread carefully when intervening in employees' personal lives.
But, these rights are not absolute. Employers can act when personal conduct, even if lawful and outside work hours, significantly impacts the employment relationship or business.
In particular out of work conduct can justify disciplinary action if it harms the employer’s reputation, undermines the employee’s ability to perform their role or raises issues of trust and confidence.
For example if a personal relationship compromises decision making or creates a conflict of interest, this would be a legitimate cause for concern for an objective employer.
This situation may arise where one party could influence the other’s remuneration, promotion, or disciplinary outcomes or where the parties are jointly responsible for decision making or accessing bank accounts.
There may also be situations where a relationship, if made public, could damage the company's reputation with investors, clients, or employees.
In the case of Byron and Cabot the fact that they were the CEO and Head of HR, with responsibility for culture and ethics, would increase the likelihood of reputational harm and damage to the company’s credibility.
The risk is potentially magnified when one party works in HR. The Head of HR is expected to oversee ethical practices, handle grievances impartially, and implement company policy.
An undisclosed relationship with the CEO may raise the spectre of bias, not only in how HR processes are applied, but also in whether complaints involving leadership would be taken seriously. Failure to manage this properly could damage staff confidence and undermine internal processes.
In short, an employer can’t discipline an employee simply for having an affair. But if the relationship becomes a source of workplace dysfunction, raises legal risks, or violates company policies, it may turn into a disciplinary issue.
The question then arises: Can employers require staff to disclose romantic relationships at work?
In New Zealand, there is no statutory duty to disclose personal relationships. However, employers can establish reasonable disclosure requirements through company policies or contractual terms. These must be clear, proportionate, and designed to manage genuine business risks, such as conflicts of interest or reputational harm.
In this regard, it is likely to be reasonable to require disclosure where a reporting or managerial relationship exists between the two parties or where one party is involved in employment decisions affecting the other.
Compulsory disclosure is also likely to be reasonable where a party holds a fiduciary position (such as a director or CEO) given the inherent responsibility and power invested in these roles. Generally, the more senior the position holder the more likely it is that there will be a need to disclose a workplace relationship.
The key is proportionality. A blanket rule requiring all personal relationships to be declared would likely be seen as excessive and an unjustified intrusion into employee privacy.
But a narrowly defined obligation, focused on need or conflict of interest, will likely withstand legal scrutiny.
If such a policy existed at Astronomer, and was breached by either Byron or Cabot, that could amount to misconduct or even serious misconduct, not because of the relationship itself, but because of the failure to comply with policy and act in good faith.
This incident underscores the importance of clarity, integrity, and having clear policies when it comes to workplace relationships. While the law respects individual privacy, it also empowers employers to manage conflicts, protect organisational culture, and uphold professionalism.
Workplace relationships are not uncommon, and it is not for employers to be the morality police. But when they occur at the highest levels, without transparency, oversight, or clear boundaries, the consequences can be far-reaching.
This article was originally published in The Post
