Photographer: Emile Wamsteker/Bloomberg News.
Photographer: Emile Wamsteker/Bloomberg News.

What Happens When a CEO and a GC Fall In Love?

When Fannie Mae CEO Timothy Mayopoulos and Fifth Third Bancorp chief legal officer Heather Russell began dating earlier this year, both executives revealed the relationship to their respective employers.

The ramifications for the two have been starkly different.

While Mayopoulos remains in charge of the nation’s largest mortgage lender — indeed, the company has backed him publicly, arguing he followed company procedures and, in spite of the business done between the two companies, the relationship doesn’t present a conflict — Russell was fired in July.

Headquartered in Cincinnati, Fifth Third is the largest bank in Ohio. The company does a significant amount of its business with Fannie Mae, according to the Wall Street Journal.

Contacted Thursday, a Fifth Third spokesman provided the same statement the company issued upon Russell’s departure, saying that “a personal matter” was brought to the company’s attention “that Fifth Third believes represents a conflict of interest.”

A handful of experts interviewed by Big Law Business about the episode expressed dismay at the differing outcomes for Mayopoulos and Russell, but said each company typically has its own policy, and that policy is the final word.

“My initial impression is that, although it seems really unfair, there is likely no legal barrier to what her employer did,” said Marcia McCormick said, a law professor at St. Louis University.

McCormick explained that Russell is unlikely to have recourse against the bank, unless there is a provision in Russell’s employment contract that protects her. Federal law doesn’t forbid firing someone based on a relationship as long as the firing doesn’t also implicate a protected category like race or religion.

More than one expert did however give a tentative nod to another glaring difference between the two executives, aside from the size of their companies: the male kept his job, and the female was fired.

“If I were representing [Russell], the question I would want to ask her is: ‘Are there male co-workers who were in relationships that the company treated better than you?'” said Charles Sullivan, who studies labor and employment law at Seton Hall.

Russell could not be reached for comment, but she told the Wall Street Journal: “During my time at Fifth Third, I never had any interactions or dealings with Fannie Mae in any regard, and there was never any conflict of interest.”

Russell joined Fifth Third as GC in 2015, according to her LinkedIn profile. Previously, she worked at BNY Mellon and Bank of America, and was counsel at Skadden Arps.

Mayopoulos and Russell were previously co-workers at Bank of America, where Mayopoulos was general counsel from 2004 to 2008. 

Several experts also pointed to the unintended consequences that sometimes stem from an overly harsh policy on relationships. McCormick explained that when employees hide romantic relationships, sometimes it leads to actual conflicts of interest, where there wouldn’t have been any, had the employees been open.

“Employees may not realize they’ve gotten themselves into a situation or found out information accidentally. Because there were no disclosures, and the relationship was forbidden, they couldn’t structure their work to make sure that wouldn’t happen,” she said.

Joseph Seiner, a law professor at the University of South Carolina, agreed: “When it’s this high profile — you’re firing your GC — what’s going to happen next time? Are people not going to get involved in a relationship? No, they’re going to hide it. That’s when things get really bad.”

Asked whether being fired over a similar romantic relationship typically hurts a professional’s career going forward, McCormick said no.

“I think another financial services company will probably snatch her up,” she said of Russell. “She did exactly what she was supposed to. She disclosed. She was following the rule.”

With additional reporting from Casey Sullivan.

Related posts

Top