A DISASTER ON THE TIP OF CUPID’S ARROW :

A Legal Review of the Affair-After Effect at the Workplace

Prologue

People who live in 21st century have spend one-third of their life in the area called “the office”. Back to 1980’s people traditionally meet each other at school, family events, religious service, neighborhood or even at leisure time. There were where men and women built relationship, date and turned to marriage. Nowadays, when most people spending 40 hours per week working, workplace become a natural place where person can meet other individuals that share similar backgrounds and interests. As a result, many end-up dating people they work with, which certainly comes as no surprise.

The workplace also has become the first place for married people who engage in infidelity to meet the other person. As women make advances everywhere in society, the old cliché about the boss and the young secretary carrying on an affair has been overshadowed by an increase in the number of men and women who work together – by means being peer, subordinate and superior or a colleague in the same industry, was equals becoming romantically involved. The old separation of the sexes has passed and old boundaries to interaction have been replaced by no boundaries. Hearing about the “guys from work” or the “girls at the office” has transformed in the “gang at work”. As we all know, people begin to get to know one another well when working together. The coed workplace offers lots of interaction, teamwork, travel, projects and longer work hours, all of which lead to members of the opposite sex who share many common attributes growing close.

The unavoidable closeness, commonalities in life and the amount of time together can lead to friendship. They end up spending a great deal of time, on occasion more time than they spend at home, with this new “friend” so the friendship can become very deep. These friendships can quickly lead to strong emotional attachments. Strong emotional attachments with the opposite sex can often lead to romance. The most noticeable theme is that they work together, grow to understand one another and “relate” better to this co-worker than they do to their spouse. The co-worker friend offers someone who relates to talk with the topic that known by both of you, someone who empathizes with them and does not bring any of the stress that home often has, making them all the more attractive.

This paper would show us how this kind of romance at the workplace, a lovey-dovey secret story, which later culminated with unpredictable result, a sacking, a sued filed or even months in jail. How a simple conversation with the loves one can drag and drop a prospective chief executive officer (CEO) into two waves insider trading scandal. Another story even showing the tragic story of a golden CEO, happy before with his wife and two-kids, was sacking in just a blink of an eye only because a sexual harassment allegation that later stated as something without facts.  This paper will discuss those cases by the legal point of view also considering the policy and ethics and its impact in each business. Last but not the least, this paper also gives a brief comparison about how if those cases happen in Indonesia.

Company Policies

Some companies have policies that discourage its employees from dating one another or having a workplace romance even with business partner from different office, while other companies do not have a problem with any employee personal relationship at the workplace. Even if their companies regulate employee relationship, they only manage the marriage relationship and not covered the dating or affair, for the married employees. Basically all businesses, whether have policies or not, only interested in productivity and commitment to of their employees to deliver expected outcomes. A company has no said in how is the employee arranging their personal life. But when people start to become attracted to each other, the workplace can become a place where productivity may become affected by personal drama. Developing a policy on dating or affair for employees can become a very touchy subject as some employees feel their company cannot dictate how their employees conduct their lives outside the workplace. But when the potential exists for personal lives to interfere with productivity or a possibility of harmed the company material information and secret, then the company may be justified in stepping in and creating a policy against people dating their co-worker or making an intimate relationship with business partner. The point is, regardless of the situation and what reason behind company policy related with romance issue, personal relationships in the workplace should not be taken lightly, as sometimes that relationship can lead to a long list of complications, not to mention that they can also cause a valuable employee to leave the company for insignificant reason.

Speaking of policies, for more than decade, many big-public companies in the United States awoke to the suppressed problem of sexual harassment in the workplace. Companies have become increasingly aware of the cost of harassment. According to one study, sexual harassment costs a typical Fortune 500 company approximately $7 million annually in turnover, absenteeism, reduced productivity and in-house complaint procedures. Firms that fail to prevent sexual harassment can face exorbitant legal expenses, penalties and damage awards. A typical case costs a company at least $150,000 to defend, and the average verdict in favor of a victim is approximately $350,000. What important is many companies had enhanced their policies by adding this harassment issue and put them into company code of conduct in order to avoid any liabilities – penalties, bad reputation and bad impact to company’s stock price, related to sexual harassment at the office or company’s plant.

In order to take an active role in the prevention of insider trading violations by its officers, directors, employees and other related individuals, almost all public or even private companies have adopted the policies and procedures described in insider trading policy (depend on each company). Basically, prohibits trading based on material, nonpublic information regarding the company ("Inside Information"). This kind of policy applies to all transactions in the company's securities, including common stock, options for common stock and any other securities the company may issue from time to time, such as preferred stock, warrants and convertible debentures, as well as to derivative securities relating to the company's stock, whether or not issued by the company, such as exchange-traded options. It applies to all officers of the company, all members of the company's Board of Directors (BOD), and all employees of, and consultants and contractors to, the company and its subsidiaries, as well as family members of such persons, and others who receive or have access to material nonpublic information regarding the company.

A Disaster No. 1 : When Sharing Information Culminated in Prison

At 7:30 in the morning on October 16th, 2009, Robert Moffat had already been at his desk at International Business Machines Corporation's (IBM) headquarters in Armonk, New York for an hour and a half. As he had almost every day in his 31-year career at the company, he had left home at 5:30 AM to get a jump on work. At the same time, five FBI agents stood on the porch of his home. "Open the door," one of the agents said to Mrs. Amor Moffat. "We're here to arrest Robert Moffat."

Moffat, 54, the senior vice president of IBM's systems and technology group, was the most prominent tech executive that considered a candidate to succeed Samuel Palmisano as IBM’s CEO. He whom pleaded guilty in the Galleon Group LLC insider-trading scheme, had an “intimate relationship” with accused tipster Danielle Chiesi, 43. Chiesi, a former teenage beauty queen, was a woman for whom business information was the ticket to gratification. She arrested on the same day as Moffat, maintained a stable of highly placed sources at the tech companies she covered for New Castle,  a hedge fund company.

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The ballad of Moffat and Chiesi is a classic tale of desire and betrayal. Chiesi had an affair with Moffat, but the person she truly loved was her boss, Mark Kurland, 60, the co-founder of New Castle. But Kurland wouldn't leave his wife and ultimately renounced Chiesi.

In the summer of 2008, Advanced Micro Devices Corporation (AMD) was in talks to spin off its manufacturing business, Fabco, creating a joint venture that would be 50% owned by a Middle Eastern sovereign wealth fund. IBM was involved in the discussions because it had been asked by AMD to provide a license ...

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