It’s easy to forget, but HOAs are similar to businesses. So when a major change is made in the business world, it often affects HOAs. The recent National Labor Relations Board (NLRB) decision regarding joint employer liability is one change that may affect future HOA decisions with respect to their ability to work with personnel companies.
The National Labor Relations Board Decision
Recently, the NLRB issued a decision in a case regarding Browning-Ferris Industries, which affects joint employer liability. The case revolves around Browning-Ferris Industries of California and Leadpoint. Leadpoint, a staffing agency, supplied Browning-Ferris Industries with employees for various tasks. The NLRB decision declared that Leadpoint and Browning-Ferris Industries were joint employers.
Before the decision, joint employer liability was only imposed if the two businesses had directly co-determined matters regarding employment, such as hiring, firing, etc. Now, businesses can be considered joint employers if they have indirect control over the employees.
The exact decision uses long-established principles that state two or more companies can be considered joint employers if they are both employers within the meaning of common law and they share/codetermine those matters governing employment. It is designed to affect large businesses that avoid liability and engage in unfair labor practices.
What’s Wrong With Joint Employment?
Joint employment has many disadvantages. When two businesses are considered joint employers, they may be both held liable for the employees’ employment matters (firing, labor practices, etc.). In some instances, one employer may not even have control over some of the employment matters, but they can still be held responsible.
How It Affects HOAs
Unfortunately, the decision doesn’t just impact large business. It may affect HOAs. Associations that contract with professional employment organizations or management companies for hiring personnel to help run the community are the ones in danger. The relationship between the HOA and these personnel businesses is similar to that of Browning-Ferris Industries and Leadpoint. Therefore, the HOA may be responsible for things they can’t affect. Moving forward, HOAs will need to be cautious when negotiating with these types of companies.
HOAs should always be careful when working with management companies or professional employer organizations, but now it’s more important than ever. Associations need to take steps to protect themselves, so they aren’t held liable for decisions they can’t control.