Understanding if favoritism in the workplace is illegal: what every HR leader should know

Defining favoritism in the workplace

What Does Favoritism Look Like in Today’s Workplace?

Favoritism in the workplace happens when an employer or manager gives preferential treatment to certain employees or groups, often based on personal relationships rather than job performance or merit. This can take many forms, from giving a family member a promotion over more qualified candidates, to consistently assigning the best projects to a favored person. Sometimes, favoritism is linked to nepotism, where family members receive special treatment, or to personal connections such as friendships or even a sexual relationship.

Workplace favoritism can also intersect with issues of discrimination and harassment. For example, if an employer favors employees based on protected characteristics like race color, national origin, age, sexual orientation, or pregnancy, this can cross the line into illegal discrimination. Similarly, if preferential treatment is given to someone in exchange for or because of a sexual relationship, it may be considered sexual harassment under employment laws.

• Examples of favoritism include promoting a less qualified employee because they are a family member, or giving better shifts to friends.
• Favoritism can be subtle, such as consistently overlooking certain employees for training or advancement opportunities.
• It may also involve retaliation, where an employee is penalized for not participating in favoritism or for complaining about it.

It’s important to note that not all favoritism is illegal. However, when it overlaps with protected characteristics or leads to illegal retaliation, it can violate employment discrimination laws. Understanding the difference between poor management and illegal employer conduct is essential for HR leaders. For a deeper dive into the legal and ethical complexities of favoritism workplace issues, check out this resource on navigating the complex world of legal and ethical HR skills.

Recognizing favoritism is the first step. The next sections will explore the legal perspectives, risks, and the skills HR leaders need to address these challenges effectively.

Legal perspectives on favoritism at work

How the Law Views Favoritism in the Workplace

Favoritism in the workplace can be a complex issue from a legal perspective. Not all acts of favoritism are considered illegal under employment law. For example, an employer might prefer one employee over another for reasons unrelated to job performance, such as personal rapport or shared interests. While this can create frustration and lower morale, it is not automatically against the law. However, favoritism crosses a legal line when it involves discrimination or harassment based on a protected characteristic. Employment discrimination laws in the United States, such as Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, and the Americans with Disabilities Act, prohibit employers from making employment decisions based on race, color, national origin, sex, sexual orientation, pregnancy, age, religion, or disability. If favoritism is shown to a person because of a sexual relationship, family member status, or other protected characteristic, it may be considered illegal discrimination or even harassment.

• Nepotism—favoring family members—can be legal unless it results in employment discrimination against others based on a protected category.
• Sexual favoritism—such as preferential treatment due to a sexual relationship—can lead to claims of sexual harassment or create a hostile work environment.
• Retaliation is illegal if an employer punishes an employee for complaining about favoritism that involves discrimination or harassment.

Laws also vary by state, and some states have additional protections that go beyond federal law. For instance, certain jurisdictions specifically address workplace favoritism or expand the list of protected characteristics. Consulting a lawyer directory or legal expert can help clarify local requirements. Employers should be aware that even if favoritism is not technically illegal, it can still expose the organization to legal risks if it appears to be linked to discrimination, harassment, or retaliation. For more details on how legal requirements intersect with HR practices, you can refer to this guide for HR professionals. Understanding the legal boundaries is essential for HR leaders to ensure fair treatment of all employees and to avoid the pitfalls of illegal employer practices. This knowledge also supports the development of effective policies and training to prevent workplace favoritism from escalating into a legal issue.

Recognizing the risks of favoritism for organizations

How Favoritism Impacts Organizational Health

Favoritism in the workplace can quietly undermine the foundation of an organization. When an employer gives preferential treatment to a person or a group—whether due to family ties, a sexual relationship, or shared background—it can erode trust and morale among employees. Even if favoritism is not always illegal, it often leads to perceptions of unfairness, which can have far-reaching consequences.

• Decreased Job Performance: Employees who witness or experience workplace favoritism may feel demotivated. When promotions, raises, or job assignments are based on relationships rather than merit, high performers may disengage, leading to lower productivity and increased turnover.
• Legal and Compliance Risks: Favoritism can cross into illegal territory if it results in employment discrimination or harassment based on protected characteristics like race color, national origin, age, sexual orientation, or pregnancy. For example, if an employer consistently favors family members or those with whom they have a sexual relationship, it could be seen as nepotism or even sexual harassment, both of which may violate employment laws and codes.
• Reputation and Culture Damage: Persistent favoritism can damage an organization’s reputation, making it harder to attract and retain talent. Employees may turn to external resources, such as a lawyer directory, if they feel their complaints are ignored or if illegal retaliation occurs after raising concerns.
• Increased Risk of Complaints: Favoritism often leads to more complaints about discrimination, harassment, or unfair treatment. Handling these complaints requires careful adherence to the law and internal policies to avoid further legal exposure.

Organizations that fail to address favoritism risk not only legal consequences but also a decline in employee engagement and overall effectiveness. Developing robust policies and ensuring transparency are essential steps. For HR leaders seeking to strengthen their approach, mastering policy development skills is crucial. You can learn more about this topic in our article on policy development skills for HR leaders.

Key skills for HR leaders to address favoritism

Essential Competencies for Addressing Favoritism

When favoritism or even nepotism appears in the workplace, HR leaders need a specific set of skills to address these challenges effectively. The ability to recognize and respond to preferential treatment, especially when it borders on illegal discrimination or harassment, is crucial for maintaining a fair and compliant work environment.

• Legal Acumen: Understanding employment law is fundamental. HR leaders must be able to distinguish between favoritism that is simply unfair and favoritism that crosses into illegal territory, such as when it involves protected characteristics like race, color, national origin, sexual orientation, pregnancy, or age. This knowledge helps prevent violations of state and federal laws regarding employment discrimination and harassment.
• Analytical Thinking: Evaluating patterns in job assignments, promotions, or rewards is key to identifying workplace favoritism. HR professionals should be able to analyze whether decisions are based on job performance or if a person is receiving preferential treatment due to a family member, sexual relationship, or other non-merit factors.
• Communication Skills: Open, clear communication with employees and management helps surface concerns about favoritism. HR leaders must be able to explain the code of conduct, anti-discrimination policies, and the consequences of illegal employer actions in a way that everyone understands.
• Conflict Resolution: Addressing complaints about favoritism, sexual harassment, or illegal retaliation requires tact and impartiality. HR leaders must manage sensitive conversations and mediate disputes to ensure all employees feel heard and respected.
• Ethical Judgment: Upholding fairness means making tough decisions, even when it involves a high-performing employee or a person with close ties to leadership. HR must consistently apply policies to avoid the perception or reality of workplace favoritism.
• Confidentiality and Trust: Employees need to trust that their concerns about favoritism or discrimination will be handled discreetly and professionally. Maintaining confidentiality is essential for effective investigations and for building credibility within the organization.

By developing these competencies, HR leaders can better identify and address situations where favoritism may not be explicitly illegal but still undermine morale, create legal risks, or lead to claims of employment discrimination or harassment. This skill set is also vital for handling complex cases involving sexual harassment, illegal retaliation, or when an employee feels they have been overlooked due to a protected characteristic.

Best practices for promoting fairness and transparency

Building a Culture of Equity and Trust

Promoting fairness and transparency in the workplace is essential for any employer aiming to prevent favoritism and illegal discrimination. Employees need to feel confident that their job performance, not personal relationships or protected characteristics, drives employment decisions. Here are practical steps HR leaders can take:

• Establish Clear Policies: Develop and communicate a code of conduct that explicitly addresses favoritism, nepotism, and preferential treatment. Make sure these policies cover all forms of discrimination, including those based on race, color, national origin, age, sexual orientation, pregnancy, and family status.
• Transparent Decision-Making: Document and share the criteria for promotions, raises, and job assignments. This helps employees understand how decisions are made and reduces the risk of perceived or actual workplace favoritism.
• Consistent Enforcement: Apply rules and policies equally to all employees, regardless of their relationship to management or their family member status. Consistency is key to avoiding claims of illegal employer behavior or illegal retaliation.
• Regular Training: Provide ongoing training for managers and staff on recognizing and preventing favoritism, discrimination, harassment, and sexual harassment. Include real-world examples of what constitutes illegal discrimination or preferential treatment.
• Open Communication Channels: Encourage employees to report concerns about favoritism or discrimination without fear of retaliation. Make sure there are confidential ways to raise issues, and that every complaint is taken seriously.
• Monitor and Audit: Regularly review employment decisions and workplace practices for patterns that could indicate favoritism or illegal practices. Use data to identify areas for improvement and take corrective action when needed.

By embedding these practices into the organization’s culture, HR leaders help ensure that employment decisions are fair, legal, and based on merit—not on personal connections, sexual relationships, or other inappropriate factors. This approach not only protects the employer from legal risks but also builds trust and engagement among all employees.

Handling complaints and investigations related to favoritism

Steps for Addressing Complaints of Favoritism

When an employee raises concerns about favoritism or related issues like discrimination, harassment, or illegal retaliation, HR leaders must act with diligence and neutrality. The process should be clear, consistent, and in line with employment laws and the organization's code of conduct.

• Receive the complaint confidentially: Employees should feel safe reporting favoritism, whether it involves nepotism, preferential treatment based on a protected characteristic (such as race, color, age, sexual orientation, national origin, or pregnancy), or a sexual relationship affecting job performance.
• Document all details: Record what the employee reports, including dates, persons involved, and any evidence. This documentation is crucial if the situation escalates or if legal action is taken.
• Assess the nature of the complaint: Determine if the issue is about workplace favoritism or if it crosses into illegal discrimination or harassment. For example, favoritism becomes illegal if it results in employment discrimination against a protected group or illegal retaliation for reporting misconduct.
• Initiate a fair investigation: Assign a neutral party to investigate. This may involve interviewing witnesses, reviewing employment records, and examining if the employer’s actions align with the law and internal policies.
• Protect all parties: Ensure there is no retaliation against the person who reported the issue or anyone participating in the investigation. Illegal employer retaliation can lead to further legal risks.
• Take corrective action: If favoritism, discrimination, or harassment is confirmed, act promptly. This could mean disciplinary action, policy changes, or training to prevent future issues.
• Communicate outcomes: While respecting confidentiality, inform the involved employee of the investigation’s conclusion and any steps taken.

When to Seek Legal Guidance

Sometimes, workplace favoritism cases intersect with complex legal issues, especially when they involve family members, sexual harassment, or protected characteristics. Consulting with a lawyer or referencing a lawyer directory can help ensure compliance with state and federal laws. This is especially important if the complaint suggests illegal discrimination or if the employer’s actions may be considered favoritism illegal under employment law.

Building Trust in the Process

Employees are more likely to report concerns if they trust the process. HR leaders should:

• Regularly train managers and employees on anti-discrimination, anti-harassment, and fair employment practices
• Review and update policies to reflect current laws and best practices
• Foster a culture where job performance, not personal relationships, drives advancement

By handling complaints and investigations with transparency and fairness, organizations can reduce the risks associated with favoritism workplace issues and demonstrate a commitment to legal and ethical employment standards.