Is Your Community Association Properly Terminating Employees?

By Sandra L.Gottlieb, Condo Lawyer and HOA Legal Expert, Senior and Managing Partner at SwedelsonGottlieb, Community Association Attorneys

We are often called upon to assist boards of directors with the termination of an association employee. All too often, however, we are called too late, after the board or manager has terminated the employee, and frequently we find that the termination was done incorrectly and problems have arisen. When terminating an employee, it is always best to consult with legal counsel first, as there are appropriate and inappropriate ways to terminate an employee. By talking first with legal counsel, the board and/or manager can ensure that termination is the appropriate remedy and ensure that it is done correctly to avoid exposure to the association as the employer, avoiding expensive and time-consuming litigation.

For example, one of our clients recently received a letter from an attorney making a discrimination complaint against the association and its board. When we reviewed the employee’s file, we saw little documentation, and what was there did not help the association. We learned that the manager terminated the employee after the employee had been out ill for a week. The former employee claimed that the termination directly resulted from the employee telling the manager that the employee was HIV positive; the manager claims not having known about this health condition.

In the letter from the employee’s attorney, it was alleged that the manager confronted the employee soon after the employee returned to work after being out sick for three days. The employee was purportedly asked whether or not their medical issues would prevent them from performing their job responsibilities. A few days later, it is alleged that the manager called the employee in, advised that the employee was not “fitting in” and was being immediatly terminated.

The attorney’s letter to the association alleges discrimination and wrongful termination, suggesting that the employee had never been written up and never had any negative comments on their job performance, and they had been working at the association for more than two years without complaint.

When asked for the manager’s notes regarding the meetings with the employee on the actual meeting where the employee was terminated, the manager indicated that there were none – no notes reflecting what was said and when it was said, etc. Clearly, this was not a good thing. And clearly, we would not have recommended termination of that employee, at least not until the appropriate steps were taken, the file was properly documented, etc.

It is likely we would have advised the board that the employee not be terminated at that time due to concern that the termination would lead to a discrimination complaint, considering the timing of the termination and the purported notification to the association of the employee’s health issues. Unfortunately, the lack of any contemporaneous notes regarding the termination would make defending a wrongful termination and discrimination complaint difficult.

Although most employees that community associations hire may be “at will” and can be terminated whenever the board wants to terminate them, there are a number of circumstances such as health issues that may make termination problematic. It is far less expensive to consult with legal counsel regarding when and how to terminate an employee than to have to deal with a discrimination and wrongful termination lawsuit, even if that lawsuit is covered by insurance. And we cannot stress enough how important it is to document the file with memos regarding employee issues and notifications and to have notes of discussions with the employee, especially when doing a termination or other job action. Now, the board of directors and the manager will be embroiled in a lawsuit having to present themselves for depositions, provide documents, and responses to interrogatories and the like. And of course, the association’s insurance rates will be impacted, and not in a good way. Many condo and homeowner associations may not have insurance coverage for these kinds of employment related claims.

Be careful out there!

Sandra Gottlieb is a recognized expert in community association law and has a background in employment legal matters as well. She can be contacted via email: slg@sghoalaw.com.