Co-worker romance: Set a policy that balances rights, liability
Jess McCavitt claims his company withheld a promotion and then fired him for being romantically involved with another officer in the company. He said their relationship had no effect on their work and the company had no written anti-fraternization policy.
McCavitt claimed protection because New York is one of the few states that prevents companies from discriminating against workers because of their legal, off-duty "recreational activities." But the 2nd U.S. Circuit Court of Appeals said that law doesn't include dating. (McCavitt v. Swiss Reinsurance America Corp., No. 00-7391, 2nd Cir., 2001)
Advice: There is no one-size-fits-all advice on setting a policy about office romance. Prohibiting employees from dating one another may prevent situations that could deteriorate into sexual harassment. On the other hand, a dating ban is hard to enforce and may scare off job candidates.
If you feel the need for an anti-fraternization policy, don't ban interoffice dating, but require managers to tell you or other top company officers if they get involved in a "power-differentiated" relationship (i.e. with a subordinate). You can have that worker report to a different manager.
Also, consult an attorney about state and local law.