I have, for many years, been defending employers and homeowners against lawsuits brought by their resident managers or former resident managers. These lawsuits often involve wage and hour claims based on alleged inadequate payment, but many also include claims of wrongful termination or discrimination (reinforcing the notion that “Hell hath no fury like a resident manager scorned”). As you can probably imagine, although every case has its own unique facts and circumstances, there exists some common themes in the legal theories usually asserted.
Lately, though, I have noticed a trend towards a new type of “wrongful termination” claim. Because plaintiff lawyers tend to be copycats (although, in fairness, the same probably can be said of other types of lawyers, too), I expect I’ll be seeing more of this. I, therefore, want to bring it to your attention; if you employ a resident manager, you should give thought to how you can best protect against these claims.
By way of background, Labor Code 98.6 prohibits employers from discharging or retaliating against an employee in violation of Labor Code section 1102.5 which, in turn, prohibits retaliation against an employee for disclosing “information” to a government agency (including law enforcement) or “a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance.” What “information” are we talking about? Anything the employee reasonably believes “discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation, regardless of whether disclosing the information is part of the employee’s job duties.”
In other words, the Legislature is prohibiting firing an employee for reporting to his supervisor or manager a practice or condition the employee believes might be illegal or violates some Code. Information that falls under this umbrella would seem to be practically limitless, including alleged overcharging rent, a security deposit being owed, having maintenance perform repair work without proper licensing or permits, etc.
The Legislature also recently also added a provision that if an employer terminates an employee within 90 days after the employee engaged in this “protected” activity (for example, disclosed “information” to a supervisor), then a presumption exists that the employee’s wrongful termination or discrimination claim is meritorious. Really?
I am now seeing more plaintiff’s lawyers asserting this theory as part of their wrongful termination claims. And it’s easy to see why. It’s a simple claim to make because, with a little imagination and poetic license, almost any property issue reported by an on-site manager can be portrayed as a violation of the law (kind of like, in my mind at least, virtually every routine property inspection will turn up a violation of some kind). For example, reporting mold or termites or water leaks can be characterized as reporting a “habitability” issue. The list is endless. Keep in mind the employee does not need to prove the legal violation actually existed; he need only prove (1) he reported a problem and. (2) he reasonably thought it was a legal violation.
The first part – showing that he made a report to a supervisor – is easy. Resident managers often report problems because it’s their job to report problems. And it also is easy for a resident manager to claim – especially after-the-fact –that he believed the problem constituted a legal violation, even if he made no such claim when he reported it. So, in essence, you are left defending against having fired someone because he performed his job.
So now that I (hopefully) have explained the issue, let’s talk about what you can do about it. I would start with the resident manager’s employment contract. You may want to include language that you can reference, should you ever confront a claim like this, to demonstrate how you, the employer, want and expect and pay your on-site manager to report the very problems he is now claiming you fired him for reporting. What possible sense does that make?
More importantly, it is critical you document in real-time any significant performance deficiencies you experience with your on-site manager. Because if you don’t, and you one day need to justify terminating him in the face of a claim that you are unlawfully retaliating, then you may not possess the evidence needed to demonstrate the true reason you fired him – his poor performance. A jury may wonder why no such documentation exists if, as you claim, he was not doing a good job. I will add, anecdotally, that, too often, I am told after-the-fact by employers that the on-site manager they were just sued for terminating never performed satisfactorily – but they never bothered to document it.
Lastly, if you are thinking about firing your on-site manager and even sniff potential problems, call a lawyer to strategize. The best defense to wrongful termination claims is, of course, to avoid the problem in the first place.
Gary Ganchrow Chairs the Litigation Department at the 111-year-old downtown Los Angeles law firm of Parker Milliken Clark O’Hara and Samuelian, has served as an Adjunct Professor at the USC School of Law, and is a frequent contributor to AOA Magazine. He regularly advises on, litigates and writes about a variety of employment, property management and business matters, and can be reached at 213-683-6535 and gganchrow@pmcos.com. This article is for informational purposes only and should not be considered legal advice or establishing an attorney-client relationship.