Legal Question in Employment Law in New York

Yeah, that's a problem. You as a manager can be perceived as giving special treatment to the employee with whom you are friends. At a minimum, if you give the performance reviews to your friend, your performance reviews are likely to be tainted by the friendship, and the other employees can become resentful of the outside friendship relationship between you and your friend, especially if your friend advances through the company faster than they do. That will be seen as favoritism, even if it is entirely based on your friend's merit. You are absolutely fomenting bad employee relationships in your department.

Your company wants to prevent these problems from occurring. They are therefore likely have an HR policy in place that specifies that managers can't manage their family members or personal friends. This can be a terminal offense, depending on their policies, meaning that yes, this may give them cause to fire or demote you.

All that said, there's no problem with a manager being on friendly terms with ALL employees in the department s/he manages; just keep it professional. Department picnics happen all the time, and many of those picnics happen in the manager's back yard. This is an INclusive event; it differs from your friendship because the friendship is EXclusive.

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