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that Owner and Management Company tried to defend, in part, by claiming Husband and Wife were terminated for poor job performance.
I do not know all the facts of the case or exactly what caused the jury to hammer Owner and Management Company. Nor do I know for sure that the jury’s verdict will stick, as the case still is ongoing and, as of when I write this, the verdict will be subject to various levels of challenge. Regardless of how the case turns out, however, the mere fact that a jury would award such a huge verdict should serve as a clarion call to anyone in this industry to try to understand the forces that can create this type of result.
I have to admit that in a perverse kind of way I find the verdict gratifying because it reinforces many of the themes I have preached in previous articles – but nothing brings a lesson home like someone else’s misfortune. Here are the takeaways from the verdict that I believe to be worth pondering and discussing:
Takeaway No. 1 – $7,500,000 is a boatload of money.
Takeaway No. 2 – A property owner can insulate himself or herself from liability to a resident manager and other employees by hiring a property management company – but only if the owner genuinely turns the reigns over to the management company.
Here, the court instructed the jury that there can be multiple employers; an employer “includes any person or entity who... employs or exercises control over the wages, hours, or working conditions of an employee ... even if it did not directly hire, fire or supervise the employees.” Translation – if a property owner hires a management company, but then determines how much the on-site manager works and gets paid or retains control over who the management company hires and terminates, then the owner, by virtue of the amount of control he exercises, may be deemed an “employer” – the very result he presumably is trying to avoid by hiring a management company. In the Garcia case, the jury found Owner to be an “employer” that had both employed and terminated Husband.
Conversely, if you are a property management company, you cannot escape liability merely by
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10 DECEMBER 2021 - APARTMENT MANAGEMENT MAGAZINE AMM2