Dating a Vendor

marc

[font size="1" color="#FF0000"]LAST EDITED ON 11-18-04 AT 05:10PM (CST)[/font][br][br]We have a nepotism policy that basically prohibits RELATIVES from having a direct reporting relationship. A couple of years ago our IT Director developed a serious relationship with an IT consultant in another state. He worked for one of our software vendors, but not on our account. A few months later he moved in with her and opened a consulting business. He now consults with us for about 10 hours per week, reporting directly to our IT Director. Our Exec Dir is aware of the issue and manages it through the budget process, basically limiting the number of hours - the software by the way, is complex and not a lot of experts out there are familiar with it, so we get great value and a discounted rate out of the relationship - but still the conflict of interest exists, it is just ignored by saying because they are not related by marriage or blood, the letter of the policy is not violated.

Fast forward. Another department hired the live in of one of our Case Managers. No real issue because the reporting relationship did not exist. She has just been promoted and now he would report to her. I have opened the door to discussion by pointing out that the reporting relationship violates the spirit of the Nepotism policy.

Of course, the new supervisor pointed at the relationship in the IT department and asked why it was OK to happen there and not for her.

Are we hoisted on our own petard?

POPEYE

Yep!!!!!

Parabeagle

Sorry, Marc. It doesn't look good. I think you've been folded, spindled and mutilated.

We, too, have a nepotism policy that applies to marriage/blood relations; however, we also have a conflicts of interest policy that specifically addresses romantic relationships with vendors, between employees, etc.

It says, in part, "...an actual or potential conflict of interest occurs when an employee is in a position to influence a decision that may result in a personal gain for that employee or for a friend or relative as a result of this company's business dealings..." and "...personal or romantic involvement with a competitor, supplier, coworker or subordinate employee of the company which impairs an employee's ability to exercise good judgment on behalf of the company, creates an actual or potential conflict of interest."

The upshot of the whole policy is that the affected employee is required to disclose relationships such as those you have described to management for a determination about whether a potential or actual conflict of interest exists and, if so, the company reserves the right to take appropriate corrective action (reassignment, etc.). Failure to disclose such relationships can lead to disciplinary action against the employee as well.

marc

I like your policy language and might shamelessly incorporate a portion in our "in progress" rewrite.

About the only out I see is a provision in our policy that allows the Board of Trustees to waive the requirement if we can prove a hardship on the business. Of course, this has been ignored to date. Still... a possibility to consider for the IT relationship. Then I would have a leg to stand on for that one. All in though, the conflict exists in the new relationship and I don't see how we can get around the perception of a lack of fairness.

In truth, forcing a change in the IT situation would cause a hardship and could have some significant ramifications - you know, "...like a pebble in a pond."

It may be possible to restructure the Case Managers reporting relationship. While causing some inefficiencies, might still be workable. Just thinking out loud.

Don D

Marc: Speaking of vendors, can you get your procurement person to check the prices on medium sized tubs of vaseline. I think you need one. x:-)

marc

I am still chuckling through the pain!x;-)

Crout

The real answer as to why it's okay for them is that Case Managers are a dime a dozen while good IT people are much harder to come by, but I guess you shouldn't share that with them. I don't think they're comparing apples to apples. The IT guy is a consultant, not an employee, and his hours are monitored by a third party (the Ex. Dir.) It's just not the same thing, and so should not be used by your case managers to violate the policy with impunity. I once supervised six people who began relationships with each other. We all had to sit down and figure out all the transfers that would be necessary to accommodate the relationships and stay within the policy. About a year and a half later I was a guest at three wedddings.

NM _Tom

Hold off on the vaseline... I would argue these are two separate and destinct issues.

A consultant is managed through deliverables identified in the contract. I assume that the Director of IT isnt the only individual required to review/approve the contract? In any case, the contract supercedes the relationship- He must meet the contract terms and deliverables or be terminated.

As for the Case Manager, there is no contractual relationship to determine if favoritism or preferential treatment exists. I also would discuss the potential for sexual harassment with the Manager of the Case Manager- there is more at risk here than just the nepotism policy.

Thoughts?

marc

There are differences between the consultant and the case manager that one could use to justify the disparate treatment. The consultant possesses familiarity and knowledge of a sophisticate software system that is unique in Northern Nevada. His expertise could be developed in another, but the time and cost would be significant. And while the relationship is monitored by the Exec. Dir., it is done from the view at 30,000 feet, which leaves the opportunity for some abuse to occur. The IT director is an ethical person and while the potential for significant abuse exists, I don't believe it happens.

While I do not know the CM's supervisor well, I would give her the same ethical head nod based on her departmental managers word - a difference does exist with the degree of influence the CM's supervisor has. Her paramour is one of 5 CM's she supervises, while the IT situation is just one person - so no favortism could show up in the IT situation, but could show up in the CM situation.

And the liability exposure is different. If the relationships both soured, I think our liability exposure is greater in the supervisor/employee relationship than the customer/vendor relationship.

In both cases the couples are living together. The IT lady already owned her house while the CM and supervisor have just bought a house together - giving at least the assumption of long term relationships - if that makes any difference.

I am going to sit with the Exec Dir and explore her appetite for either getting board sign-off on the situations, or to eliminate the policy. Why have a policy you won't enforce.

Don't get me wrong, the policies are valid and should be in place, but I think we are fooling ourselves if we think this won't continue to bite us in the butt.