Why your office romance is your employer’s business by Anne Fisher @FortuneMagazine June 7, 2013, 9:20 AM EST E-mail Tweet Facebook Google Plus Linkedin Share icons FORTUNE – Dear Annie: I will be a senior in the fall and just started a summer internship at a major financial services company, and something has come up that seems strange to me. A manager in the human resources department called me into her office and gave me a document to sign that said (among other things) that my relationship with my boyfriend is “voluntary.” One reason I chose this internship in the first place is because my boyfriend, who graduated last year, works here now, and we thought it would be great to spend the summer at the same firm, although we are in different departments. But why is the fact that we’re a couple any of the company’s business? Having to sign this agreement (which my boyfriend also signed) seems kind of intrusive, doesn’t it? What do you think? — Wondering on Wall Street Dear Wondering: I’m a little surprised that the HR person didn’t explain this to you, but what the company is doing is trying to prevent a potential sexual harassment lawsuit. The document you signed — sometimes called a “cupid contract” or a “love agreement” — probably spells out the firm’s policy on sexual harassment, including to whom you can turn for help if your romance goes sour and your boyfriend starts, for instance, stalking you at work or threatening to get you fired. (I know, that probably strikes you as wildly unlikely, but it’s been known to happen.) MORE: The age of the ‘recycled CEO’ Asking you to confirm in writing that the relationship is voluntary gives the company a defense later on if you try to sue on the grounds that you were coerced or intimidated into accepting your boyfriend’s amorous advances. “But a ‘cupid contract’ is partly for your own protection as well,” notes Merry Campbell, co-chair of the employment law practice at Shulman, Rogers, Gandal, Pordy & Ecker in Washington, D.C. “The agreement should indicate to you that, if the romance ends badly, it won’t affect your position at work, and you have the right to bring any repercussions — for example, retaliation on your boyfriend’s part — to management’s attention.” All this talk of contracts and lawsuits might come as a shock to anyone too young to remember a rash of high-profile sexual harassment suits in the ‘90s — not to mention a few more recent ones, like the 2011 case where a jury awarded $10.6 million to a Kansas City employee of UBS Financial Services whose supervisor had harassed her. In fact, a new poll by work-life and benefits consultants Workplace Options suggests the millennial generation is blissfully unaware of how messy, and how nasty, sex in the office can get. Consider: 84% of 18-to-29-year-olds say they’d date a coworker, versus 36% of Gen Xers (ages 30 to 45) and only 29% of Boomers (45-65). Almost three-quarters of millennials (71%) “see a workplace romance as having positive effects such as improved performance and morale,” the report adds. In some corporate cultures, that may be true. “It really varies a lot from one company to another,” Campbell observes. “In some cultures, half the employees are dating, or married to, the other half and it’s not a problem — at least not yet.” In many other companies, though, office romances are strongly discouraged, or even prohibited. MORE: Become a Most Powerful Women Entrepreneur Especially ominous for employers (and their lawyers) is that, as a group, the millennial generation is more than three times more likely to see no problem with dating their supervisors than all other age groups combined,the Workplace Options study notes: 40% of millennials would get involved with a boss, versus just 12% of older employees. “There is a lot of potential liability if one party in a relationship reports to the other,” Campbell says. “One concern is, what about the people who are not in the relationship? Employers are responsible for making sure there is no perceived, or actual, favoritism” — where, for example, the boss’ sweetie gets better assignments than everybody else. It’s a big reason why some companies have a policy of separating the lovebirds, either by moving one of them to a different part of the firm or, if that’s not possible, asking one or the other to resign. “That’s a best practice, not a legal requirement,” Campbell notes. “But it does minimize the company’s legal liability.” When a supervisor and a subordinate are involved with each other, she adds, the part of the cupid contract that says the romance is voluntary is especially important, from a legal point of view: “It establishes from the outset that there is no quid pro quo sexual harassment taking place.” That’s the kind where a boss tells an underling, for example, “You can have a raise if you sleep with me.” Of course, that doesn’t apply to you and your boyfriend — but I bet this whole subject is a bigger can of worms than you suspected. Considering all the various ways that office romances can turn ugly and litigious, having to sign a cupid contract might not seem so strange. Talkback: Have you ever been involved with a coworker, or a boss? If so, what effect (if any) did it have on your job, or your career? Leave a comment below.