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The employer is automatically liable if the supervisor implements a tangible employment action once that relationship turns sour.
This time, a second female direct report, Lynette Gilming, was involved.
Michael unwisely told three other supervisors he was having an affair with Lynette.
They asked him directly if he was having an intimate relationship with Lynette. The court could also have mentioned that Lynette, as far as we know, never lied about the relationship.
Michael was told Eaton was concerned about potential sexual harassment liability if his reported relationship with Lynette turned sour. Michael’s principal argument was that a female supervisor also violated this company policy by having “intimate relationships” with her subordinates, but was never disciplined.
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Thereafter, his supervisor, Ron Fowler, heard “rumors” Michael was having an intimate relationship with Ann Ables, one of his direct reports. Ron told Michael he was happy to hear that since Eaton had a policy against such relationships.