It doesn't matter if there was an actual abuse of power, or if they were completely consenting adults.

When anyone in the company is fucking the boss and get a raise or promotion, or a good project, everyone in the company who isn't fucking the boss now have a legitimate grievance to sue the company over - that they are being passed over for these things because they aren't fucking the boss.

It doesn't even have to be true. The sheer possibility that it is true is cyanide.

This is part of every sexual harassment training 101 that any manager has ever gone through. (If you haven't gone through it, your employer's opening itself up to a lot of liability...)