There's no question that favoritism is a bad management practice: It breeds resentment, destroys employee morale, and creates disincentives for good performance. Once employees see that benefits flow from being on the manager's good side—rather than from doing a great job—there's little point in working hard. And favoritism leads to lost productivity, as employees who aren't getting the plum assignments spend more and more time gossiping and griping about how unfair the system is rather than doing their work.
But is favoritism illegal? Not always. It depends on why employees are being favored or disfavored. No law prevents companies from having lousy managers or running a workplace like a schoolyard. If favoritism is rooted in discrimination, harassment, or retaliation, however, it crosses the line from poor management to illegal behavior.
Illegal discrimination happens when employers make job decisions based on employees' protected characteristics—traits that federal, state, or local governments have decided should not be the basis for employment actions. Under federal law, for example, it's illegal for employers not to hire someone because of his race, to refuse to promote women, to relegate employees with disabilities to low-paying positions, or to lay off employees based on age.
If workplace favoritism is based on protected characteristics, then it is illegal discrimination. For example, if a manager promotes only men or gives the best assignments and shifts to employees who share his religious beliefs, that would be discrimination.
On the other hand, favoritism that's based on other factors may not be discriminatory, even if it's a sign of bad management. For example, if a manager favors employees who are her college buddies, who are fans of the same baseball team, or who love the same band, that is not illegal discrimination.
The Equal Employment Opportunity Commission (EEOC), the federal agency that interprets and enforces the laws prohibiting discrimination, has said that favoritism may be sexual harassment if it's based on submitting to a manager's sexual advances. For example, if some employees receive better assignments or other job benefits because they put up with a manager's harassment, the other employees may still have a legal claim against the company. Because putting up with harassment is a condition of getting job benefits, employees may have a valid sexual harassment claim, whether or not they were directly subjected to harassment or went along with it.
Some courts have gone further and found that favoring romantic partners in the workplace may constitute sexual harassment in some situations. Even if the romantic partners themselves are not facing harassment (because their relationships are consensual), other employees may believe that the only way to get ahead at the company is to have a sexual relationship with the boss. At some point, this type of behavior crosses the line from unprofessional to illegal harassment, particularly if a number of employees are involved.
For more information, see our articles and resources on Harassment.
If a manager's decisions are intended to punish employees who have complained of illegal behavior (such as discrimination, harassment, or unsafe working conditions), that could be illegal retaliation.
For example, if a group of employees have filed an OSHA complaint because their employer isn't providing them with required safety equipment, and their manager reserves the best assignments for employees who have not joined the complaint, that is a form of illegal retaliation.
Similarly, if a manager disfavors an employee (for example, by cutting back her hours, assigning her to the graveyard shift, or taking away prestigious clients) after she complains of harassment, that would also be illegal retaliation.
For more information, see Can I Sue for Employee Favoritism?
If your employer allows favoritism to run rampant, you may want to consult with an experienced employment lawyer. A lawyer can review your case and determine whether favoritism has crossed the line from ineffective management to illegal behavior.