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The Boss Is Dating an Employee. Now What? Any owner, CEO or manager needs to tread very carefully when becoming romantically involved with an employee.

By Gael O'Brien

This story appears in the May 2015 issue of Entrepreneur. Subscribe »

Q: My business partner is dating one of his direct reports. To avoid the appearance of a conflict of interest, he wants her to report to me instead. He says that since both parties are single, and the relationship is consensual, it's a private matter. I told him I'd check with our attorney about potential legal issues, but I'm concerned that this is an ethics minefield. What do you think?

A: There are numerous ethical issues involved in an owner or CEO or, really, any manager dating an employee. You and your partner need to see your attorney as well as an HR expert, but first you need to have an owner-to-owner talk about leadership ethics.

This is no dating game—the relationship, whether or not they stay together, could wreak havoc on your culture and company. Playing musical chairs with direct reports does not solve the ethical issues that come with this interoffice romance. As owners, both of you are responsible for setting the tone for the organization and for modeling behavior expected of all employees. Your partner's expectation that you will now supervise his love interest isn't coming from a place of leadership or ethical awareness.