Simply put, the definition of nepotism is favoring relatives. Nepotism in the workplace occurs when employers favor relatives in making employment decisions, with little to no regard for anything but kinship.
An example is hiring or promoting relatives solely because they are family members, with no consideration of the qualifications or merits of other job candidates or employees.
Nepotism in the Workplace
Workplace nepotism is not unusual, especially at smaller companies and non-profits in the private sector.
The obvious reason aside, it's not unusual likely because there is no universal "nepotism law" at the Federal level that prohibits it in all states. Several state legislatures and city councils have passed nepotism laws (or anti-nepotism laws, as they're sometimes called), but typically only in regard to public-sector employment.
However, the consequences of nepotism might constitute illegal employment discrimination under Federal discrimination laws or state equivalents, in either the private or public sector.
For example, it might constitute illegal discrimination on the basis of race or sex, if an employer with 15 or more employees consistently hires relatives of a particular race or gender to the exclusion of non-relatives of other races or the opposite gender.
The consequences might constitute wrongful termination too. For example, if a boss fires employees solely to create job opportunities for relatives who have the same religious beliefs as does he or she, then the boss might have illegally discharged those employees based on religion discrimination, if their religious beliefs were not the same as his or hers.
If a reasonable employee quits solely because a recent change as a consequence of nepotism made working conditions extraordinarily intolerable, then it might constitute constructive discharge, a form of wrongful termination.
If the act of nepotism or its consequences were not illegal (or relief is not worth pursuing through legal means), then there's little that an adversely-affected employee can do, but try to win the favor of the "family clique" or quit for a better job.
To discover whether or not the state or municipality in which you work has enacted public-sector anti-nepotism laws, contact the state legislature or the municipal equivalent (such as the city council), or consult an attorney.
Employers may create anti-nepotism policies to avoid employee discrimination charges. However, employers who don't do so with the legal advice of an appropriate attorney might not avoid the employee discrimination charges that they tried to avoid in the first place.
For example, some states consider employer anti-nepotism policies to be discriminatory on the basis of marital status, if they prevent qualified married couples from working together.
If you think that your employer has illegally discriminated against you as a consequence of nepotism or an anti-nepotism policy, consult an attorney or file a charge with the EEOC to seek legal relief.
A private lawsuit through an attorney might win more award for you than can the EEOC. Attorneys often take winnable discrimination cases on a contingency basis. Regardless, whether you first file a charge with the EEOC or consult an attorney, don't delay for long. There is a statute of limitations for taking legal action.