From the January 2006 issue of Entrepreneur

They say love is a many-splendored thing. Today, it's an on-the-job thing as more employees gaze longingly at each other from across crowded cube farms. In a 2005 Career-Builder.comsurvey, some 56 percent of workers revealed that they have dated a co-worker, and 31 percent have had an office romance more than twice. Longer workdays have made the office as much a social environment as it is a work environment, says John Challenger, CEO of Chicago-based outplacement firm Challenger, Gray & Christmas. "Companies have almost no choice but to accept office romances," he says.

Office romances are leading to new legal battles. Consider Miller v. Department of Corrections, in which the California Supreme Court overturned two lower court decisions by ruling that workers may sue for sexual harassment when they lose promotions to co-workers who are dating supervisors.

Prior to Miller, third parties suing over co-workers' consensual office romances didn't get very far, since courts didn't see any direct harassment. While entrepreneurs can't outlaw office romances, they should now be very careful with promotions that involve romantically involved people, says Diana P. Scott, co-chair of the National Labor and Employment Practice at Greenberg Traurig in Los Angeles. "You have to change the channels of supervision," she says. For example, third parties should conduct annual reviews to minimize morale problems.

D. Gregory Valenza, managing partner at Jackson Lewis LLP in San Francisco, sees the Miller ruling as an overreaction that may be impossible to enforce. "The [California Supreme Court also] said if you're having a relationship and there's an isolated instance of favoritism, that's not going to be a sexual harassment claim," he says. A suit has to show a pattern of favoritism to be considered harassment.

Where California goes, other states follow. "[Miller] probably will be used as an initial jumping-off point," Scott says. And with the Equal Employment Opportunity Commission receiving over 13,000 complaints of harassment last year alone, it's time to check your HR policies.