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Axel Springer plans to force disclosure of employee relationships after Bild scandal

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German publishing giant Axel Springer plans to require its nearly 16,000 employees to disclose sexual relationships between managers and subordinates, in the wake of a scandal that led to the ousting of the editor of its flagship newspaper Bild.

Chief executive Mathias Döpfner, facing questions over his handling of the incident, wants to impose such rules for the first time in the media group’s 75-year history.

But the plan has been met with scepticism from the company’s powerful worker representatives in Germany. It also stops short of prohibiting the company’s most powerful executives from pursuing relationships with junior staff.

Döpfner said the company has come to realise the standards regarding workplace relationships were stricter in the US, a critical market for Axel Springer as it aims to become a global media player.

“We cannot accept double standards. We are going to apply a global rule that is based on the Anglo-Saxon versus looser, lower European standards,” he told the Financial Times.

Yet an outright ban on top executives pursuing relationships at work is increasingly common in the US. Chief executives of companies including McDonald’s, Intel and Boeing have been forced to resign over consensual affairs with subordinates. Axel Springer said it would seek to address potential conflicts of interest by moving people to different roles.

The German media group has come under heavy scrutiny since female employees earlier this year accused Bild editor-in-chief Julian Reichelt of having frequent affairs with interns and subordinates, and handing out promotions in return. Springer mandated law firm Freshfields to investigate the allegations.

Der Spiegel made the probe public in March in an article headlined “Screw, Promote, Fire”. Reichelt was briefly suspended from Bild, but returned to work after he was cleared of criminal misconduct. He was fired last month, a day after The New York Times revealed details about his alleged conduct.

Axel Springer said the dismissal was based on “new insights”, saying Reichelt “did not clearly separate [his] private and professional affairs” even after the investigation.

Julian Reichelt was fired as Bild editor last month © Clemens Bilan/EPA/Shutterstock

Around the same time, the company finalised its $1bn acquisition of Politico, part of its efforts to become a major player in the US. “Our goal is to become the leading digital publisher in the democratic world,” Döpfner said. 

The Bild scandal, however, has underlined how diverging workplace cultures between Axel Springer’s German operations and the US companies it has acquired could prove an obstacle to fulfilling its global ambitions.

Döpfner said workers’ representatives prevented the company from introducing a company-wide policy on disclosing relationships four years ago, adding they were still resisting it. 

“We just learned today that our labour representatives still do not approve a formal rule on romantic and sexual relationships in a hierarchy,” Döpfner told the FT last week. If a compromise could not be reached, “what we simply would then do is say: there is a code of conduct principle we expect from our employees around the world. Whoever is not behaving appropriately needs to leave the company.”

Linda Paczkowski-Diering, head of Axel Springer’s workers’ council, confirmed that talks were ongoing but would not comment on the union’s position.

“We will soon sit down with the management board to discuss the ideas, concepts and suggestions that are best suited to shape the company’s future tasks,” she told the FT, adding that diverse business models and internal culture at Axel Springer’s 260 different global business units needed to be considered.

Forcing disclosure of personal relationships across an entire company is difficult in Germany, where employee representatives wield significant power and where the right to privacy ranks high in employment law.

“For German employers, it is legally all but impossible to impose a blanket ban on relationships between managers and subordinates,” said Peter Krebühl, a Frankfurt-based labour lawyer, pointing to a landmark ruling from 2005, in which a German court struck down Walmart’s code of conduct that prohibited consensual relationships between staff. 

Employers in Germany are legally obliged to protect employees from predatory bosses, but according to Krebühl sometimes still have a tendency to look the other way. “Sexually abusive employees who are deemed important for the company — for instance because they generate a lot of revenue — are often deliberately protected,” he said.

In the US, the Me Too debate has fundamentally changed employers’ attitudes. There is increasingly a zero tolerance for relationships between senior bosses and subordinates, said Davia Temin, who runs a crisis-management company in New York.

“The world is changing,” she said. “What is acceptable is changing, abuse of power and the concept of that is changing.”

At a growing number of US companies, top executives now had clauses in their contracts saying there can be no relationship whatsoever with more junior colleagues, said Jennifer Kennedy Park, a partner at Cleary Gottlieb, who has written about “anti-fraternisation” policies.

“At the most senior level, the argument about consent becomes the hardest to judge because the person at the top of the organisation has power over everyone,” she added. 

While requiring disclosure across entire workforces could raise questions about intrusion into employees’ private lives, she said, a growing number of companies had decided “you can justify intrusion into senior people’s lives because it’s the cost of being very senior”. 

Additional reporting by Arash Massoudi in London

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