Don’t Let Your Managers Fall Prey To Kickbacks
Kickbacks can cost both you and your clients, but your managers might not even know when they’re receiving one. Teaching your employees to recognize and sidestep such wrongful transactions can reduce the risks to your bottom line.
Just what type of arrangement qualifies as a kickback?
“It’s generally receiving something of value in exchange for getting a contract or a better deal and pocketing that money or gift,” says Jamie Dokovna, a shareholder in the Florida law firm Becker & Poliakoff who practices employment law and works in the community association arena. In other words, you pat my back, I’ll pat yours.
In the association context, Michael Kim, of counsel with the Chicago law firm Schoenberg Finkel Newman & Rosenberg, LLC, says kickbacks occur when a manager gets a benefit or some type of remuneration that could be considered a potential disadvantage to either the association client or an individual owner.
“Mutual referrals based on merit — for example, referring a board to an attorney or plumber you’ve had a good relationship with — that’s probably okay,” he says. “But you can’t recommend a vendor because you expect something in return.”
Vendors aren’t the only source of kickbacks, though. “It can come in the owner context, as well,” Dokovna says.
“I’ve seen where particular employees are on an owner’s dole. They do almost everything for an owner, like running up packages or turning on their car for them, and they’ll do it before they do anything for anyone else or even the association. Every owner should be getting the same level of treatment and services.”
Read the full story now and learn more, including the important role of intent:
Cornering Kickbacks: How to Help Your Managers Avoid Them