From a female Catholic employment lawyer:
Misinterpretation of secular law is probably the least of your worries right now, but your "stunned" reader is wrong about "Wrong #1"(see post below). (Although on everything else, I pretty much agree with him/her.)
The law doesn't prohibit consensual sexual relationships in the workplace, even if between bosses and their employees, as the many lawyers who've "pronged" each other, their paralegals, and their secretaries very well know. Sometimes they even end up getting married.
The law does prohibit sexual harassment (non-consensual sexual behavior in the workplace) and does give rights to the co-workers who missed out on legitimate work-related opportunities because they either were not "offered the chance" to be harassed or because they rejected the unwanted sexual behavior.
However, if the co-workers lost out on these opportunities because they were not parties to a consensual workplace sexual relationship, they have no legal claim whatsoever. The courts call that "favoritism." Poor management, yes, but not illegal.
And you thought Canon Law was technical!
I enjoy your blog.