Grenades

For awhile, I forgot while running through the missions that grenades were part of your offensive arsenal, but when I tried using them (and this was after upgrading them to max blast radius and damage) I find myself killing off my fellow Space Wranglers more often than not. I seem to be able to remedy this by making sure they are set to Defend rather than Attack (so basically they are all in my view and I know where they are before chucking grenades), but since the other weapons appear to have "friendly-fire" disabled I assumed grenades might be treated the same.

I guess I'm asking if the grenades are working as intended (that they can kill your squadmates, and yourself, if thrown to the ground in close proximity) or if maybe they are just a little too deadly to yourself and your squad.