Dear Littler: What can we do (legally!) about broken hearts in the workplace?

Dear Littler: I’m a manager at a mid-sized company, and I overheard in the breakroom that two of our employees who were dating appear to have broken up, and another employee announced he is in the process of getting a divorce. Aside from refraining from wishing them a happy Valentine’s Day this year, are there any employment-related things I should keep in mind?

—Not Cupid

Dear Not Cupid, 

You do not say whether you have a policy requiring employees to disclose workplace dating relationships or whether the employees ever signed a form acknowledging their relationship, often called a “love contract.” Requiring employees to disclose dating relationships to HR and to sign a love contract can help protect against sexual harassment claims by documenting that both parties voluntarily entered into a mutually consensual relationship. The agreements typically provide also that the parties understand the company’s sexual harassment policy and that neither of them regards any aspect of the relationship as sexual harassment. Other important points to include in a love contract are agreement by the parties that they will not allow their relationship (or its potential dissolution) to interfere with their work or disrupt the workplace, and acknowledgment that the company may take action if interference or disruption in the workplace results from the relationship or its end.

You do not indicate the work relationship between the parties. To reduce the likelihood of harassment claims it is a good idea for company policies or handbooks to prohibit employees from having a romantic or dating relationship with any employee they supervise, directly or indirectly.

Issues related to retirement plans such as 401(k) and 403(b) plans can come into play following divorce. A Qualified Domestic Relations Order (QDRO) is a court order that requires a retirement plan to provide one ex-spouse with a portion of the former spouse’s retirement benefits. The retirement plan cannot legally divide such retirement benefits unless it has an official QDRO from a court specifying the amount to which the ex-spouse is entitled, and directions for maintaining a separate account or rolling over the benefits to the ex-spouse’s plan or IRA. 

Speaking of benefit plans, it is advisable to remind employees regularly that they should review and update their benefit plan beneficiaries. A federal court decision, Proctor & Gamble U.S. Business Services Company v. Estate of Rolison (M.D. Pa. Apr. 29, 2024), illustrates what can happen if employees fail to do so. The employee in that case had named his girlfriend as a beneficiary of the company savings and stock ownership plans, but neglected to remove her as beneficiary after they broke up. When the employee died 26 years later, the ex-girlfriend received the plan benefits. When the estate sued, the court ruled that the company had complied with ERISA by following the beneficiary designation on file with the plan administrator. The employee’s estate lost out on a substantial sum!

When an employee does try to change a benefit plan’s designated beneficiary, it is crucially important that they follow the specific instructions for doing so in the plan documents. A Seventh Circuit case decided this month, Packaging Corp. of Am. Thrift Plan for Hourly Emps. v. Langdon, __ F.4th __ (7th Cir. Feb. 2, 2026), exemplifies what can happen when an employee does not do this. In that case, following his divorce, an employee attempted to remove his ex-wife as his retirement plan beneficiary by faxing instructions to the plan’s benefit center. After the employee died and the plan notified the ex-wife that it intended to distribute the benefits to her as beneficiary, the estate filed suit. The court granted summary judgment to the estate, concluding that the employee had “substantially complied” with the plan requirements for changing a beneficiary. The Seventh Circuit reversed, finding that the employee’s fax “deviates materially from the Plan's terms and falls short of being ‘for all practical purposes similar to’ the procedures required by the plan documents.” Based on the facts in the case, the court held that the employee had not substantially complied with the plan's beneficiary-change requirements, so his ex-wife remained the primary beneficiary of his retirement plan. 

It is also important to remind employees that ex-spouses or ex-domestic partners are not eligible for coverage under employer sponsored group health plans as dependents. If the health plan is subject to the Consolidated Omnibus Budget Reconciliation Act (COBRA), or a similar state mini-COBRA law, ex-spouses may be entitled to continue coverage at their own expense for up to 36 months following a divorce. COBRA does not afford the same continuation of coverage rights to domestic partners, but a health plan may voluntarily extend continuation coverage to a former domestic partner if the sponsoring employer so chooses. Under COBRA, employees must notify the plan administrator within 60 days after a divorce or legal separation, and the plan administrator must give notice to the ex-spouse, within 14 days, of their right to elect to continue coverage under the employer’s group health plans. An employee’s failure to notify the plan administrator of the divorce, legal separation, or end of a domestic partner relationship may result in claims being denied by insurance carriers. Where claims are paid, the failure to give notice may constitute fraud. Unlike requiring coverage for an employee’s child, courts cannot require a health plan to cover ex-spouses, even if the employee is required to pay for the ex-spouse’s coverage as part of the divorce or separation proceedings. 

As a final matter, you may want to consider reminding employees of availability of the company’s Employee Assistance Program (EAP), if you have one. If your company does not have an EAP, you might look into providing one. EAPs offer free and confidential short-term counseling, referrals, and follow-up services to employees who have personal or work-related issues affecting mental and emotional well-being, such as stress, family and relationship problems, as well as alcohol and other substance abuse problems. EAP counselors can also work with managers and supervisors to address employee issues. 

Good luck with your lovelorn staff!¹