Employee Status Could Determine HOA Liability

Employee Status Could Determine HOA Liability

Q: I manage a community association through a property management company. The association itself has some employees—namely, a superintendent for repairs—but I am the person who controls his workload. The employee had an accident on the property and filed a workers’ compensation claim. He’s also trying to sue the association and the management company for a second recovery. I was under the impression that there couldn’t be a double recovery for an injury in this type of case. Is it possible that the employee could prevail if he files his lawsuit?

A: That depends on what type of employee he is. If he’s deemed a “special employee” of the property management company, then he would be limited to whatever he has gotten from workers’ comp. A court would weigh certain factors to determine employment status. For example, in a situation where an employee of one entity is borrowed by another employer—like the association’s employee being borrowed by the property management company—that employee may prevail in a common law action against the borrowing employer depending on whether the employer is determined to be a “special employer.” If the borrowing employer is determined to be a special employer, then the borrowed employee is precluded from bringing an action against the special employer. A special employment relationship exists where: (1) the employee has made a contract of hire, express or implied, with the special employer; (2) the work being done is essentially that of the special employer; and (3) the special employer has the right to control the details of the work.

Courts also use two additional factors in determining special employment: Whether the special employer pays the lent employee’s wages, and has the power to hire, discharge, or recall the employee. The most significant factor is “whether the special employer had the right to control the special employee.”

For a case on point and an explanation of the court’s decision, see “Determining 'Special Employee' Status for Association Employee's Recovery,” available to subscribers here.