Over at Yale's alumni magazine, Carole Bass writes that Yale University incorporated a ban on sexual relationships between faculty and undergraduate students in its January faculty handbook:
Previously, the university had prohibited such relationships only when the faculty member had “direct pedagogical or supervisory responsibilities” over the student. That remains the rule for affairs between faculty and graduate or professional students, and between grad students and undergrads.
The faculty-undergrad policy came under review last fall as Long undertook a periodic update of the faculty handbook. “We discussed it with a large number of faculty people” before approval by the Faculty of Arts and Sciences’ steering committee and executive committee.
Overall this seems to be taking the "don't shit where you eat" approach to its faculty. Workplace relationships -- especially where the power dynamic is unbalanced is always tricky and many workplaces have adopted similar policies to Yale's own faculty-undergraduate ban. For instance, many workplaces require notifying a supervisor of a relationship that traverses the manager-subordinate line.
Yale's policy seems much stricter than that and seems pretty much unenforceable. Although it's great to coach your faculty not to cross into inappropriate relationships with students, it makes a lot of assumptions about the ages of undergraduates and faculty members (non-traditional students may sometimes be older than graduate students assisting with classes). As a general guideline it's a good policy, but what would Yale do when encountered with an age-appropriate relationship between two consenting adults?