Blood is Thicker Than Water: The Obligation To Bargain Over Nepotism Policies

It seems sensible for an employer to have a nepotism policy restricting the circumstances where an employee may supervise a family member (or make employment decisions such as compensation, discipline, evaluation, or promotional opportunities).  However, at least in the unionized workplace, and especially in the public sector, employers cannot let common sense get in the way of potential mandatory bargaining obligations.

In City of Hartford v. Connecticut State Board of Labor Relations, 2014 WL 2581034 (Conn Super. May 7, 2014), a female employee in the City Treasurer’s Office in Hartford married a gentleman who became the City Treasurer.  Subsequently, the City (1) adopted a new policy and ordinance governing nepotism, and (2) based upon this policy, transferred the employee  to another department in order “to eliminate any and all concerns regarding claims of nepotism or favoritism.” Specifically, the City mandated that the policy must be “taken into consideration when relatives of employees are being reviewed for new job assignments, transfers or promotions” and required that if “two existing employees of the City work together in a supervisory relationship…one of the employees may be transferred or otherwise reassigned.”

The employee’s union filed a complaint with Connecticut’s State Board of Labor Relations (“SBLR”) claiming that the City acted illegally in unilaterally implementing the policy without bargaining with the union.  The SBLR agreed, and determined that the unilateral adoption of the policy and the transfer of the employee were illegal as they constituted an illegal unilateral change in conditions of employment. The City appealed the decision to the Connecticut Superior Court, specifically challenging the SBLR’s determination that the City was required to bargain with the union before implementing the anti-nepotism policy.

The Court affirmed the SBLR’s decision. The Court noted that the City was not prohibited from adopting an anti-nepotism policy, stating that “a municipality’s adoption of a policy that prevents the influence of nepotism on the hiring, assigning, and promotion of its employees may well be both wise and admirable.” Rather, the issue was whether the Municipal Employees Relations Act requires a municipality to bargain in good faith with unions regarding the aspectsof its nepotism policy that impact its employees’ conditions of employment  –  in other words although the city had the right to implement the policy ,it nevertheless had to bargain over the policy’s impact on the employees.  The Court noted that “terms and conditions of employment” which must be bargained include transfers.  The Court noted that the policy expressly affected transfers.  As an employee was transferred pursuant to the policy, it affected a “condition of employment,” which normally requires bargaining.

The Court rejected the City’s contention that bargaining with the union regarding the nepotism policy would be illegal as against public policy.  The Court also rejected a claim by the City that the nepotism policy touched upon an area strictly within its managerial prerogative (and a matter of “local concern” committed to its discretion).  Although the City is empowered by state law to adopt a code of ethical conduct, to the extent that such a code affects conditions of employment, its provisions are still subject to mandatory collective bargaining.

Pointing out the absurd, the Court did note that a bargained-for “pro-nepotism” policy could be against public policy.  However, the SBLR and the Court stressed that just because the laws may require a certain modicum of ethics, an employer’s obligations under labor laws do not disappear.  The dichotomies offered by the existing labor caselaw (for example, while the decision to establish a paramedic unit is a municipality’s call, the terms of employment for the paramedics then require bargaining) remain instructive in assessing the obligation to bargain over the impact of a managerial decision, even those reflecting “good government.”

Topics:  Compliance, DOL, Family Businesses, Family Members

Published In: Administrative Agency Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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