Is this a Conflict of interest or discrimination?

Started by JamesA11 • 11 replies • 1246 views

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JamesA11 (Pennsylvania)
Posts: 5

Posted:

Here is part of my HOA's Bylaws.

(d) No full-time or part time employee of the association, EXCEPT as described below, can be related, Directly or through marriage, to any member of the association's Board of Directors.
"Related Directly" includes Parents, Children, Grand Parents, Grand Children, Siblings, and Cousins.

"Related by Marriage" Includes any Spouse's Parents, Children, Grand Parents, Grand Children, Siblings and Cousins.

This does not apply to relatives hired as Summer, Seasonal, Part-Time and Per Diem employees (i.e., Lifeguards, Boat tenders, Maintenance assistants etc.).

Now question here, If a elected Board members Sister in Law worked as a part time employee (2.5 hrs a day max, 5 days a week max appx. 13 hrs a week) during the School year ONLY. would the above bylaw prohibit her from working, or the Board member from serving on the Board?

Part two...If a seated Board member's WIFE was employed and worked every 3rd day on weekdays (12 hours 2x a week, plus 24hrs on a weekend total of 48 hrs.) . She is listed as a part time year round employee. Would the above bylaw prohibit her from working, or the Board member from serving on the Board?

Part Three, If the Wife was allowed and the sister in law was NOT allowed. can this be considered Discrimination, due to rule NOT being enforced on the wife, And enforced on the sister in law?

Can a HOA be held legally liable for the above, if one is enforced but not the other?

Thank you in advance
J.A.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By JamesA11 on 09/18/2017 5:47 PM

Now question here, If a elected Board members Sister in Law worked as a part time employee (2.5 hrs a day max, 5 days a week max appx. 13 hrs a week) during the School year ONLY. would the above bylaw prohibit her from working, or the Board member from serving on the Board?

A legal question that needs to be answered by an attorney.

Quote:

Posted By JamesA11 on 09/18/2017 5:47 PM

Part two...If a seated Board member's WIFE was employed and worked every 3rd day on weekdays (12 hours 2x a week, plus 24hrs on a weekend total of 48 hrs.) . She is listed as a part time year round employee. Would the above bylaw prohibit her from working, or the Board member from serving on the Board?

Again, another legal question.

Personally, I don't think any family member should be employed.

Quote:

Posted By JamesA11 on 09/18/2017 5:47 PM

Part Three, If the Wife was allowed and the sister in law was NOT allowed. can this be considered Discrimination, due to rule NOT being enforced on the wife, And enforced on the sister in law?

Again, a legal question that needs to be directed to an attorney who has access to all your governing documents and would be familiar with the applicable laws.

Quote:

Posted By JamesA11 on 09/18/2017 5:47 PM

Can a HOA be held legally liable for the above, if one is enforced but not the other?

The HOA can be held legally responsible for any decision a Board makes.
The business judgement rule is a good defense but there still may be consequences to any Board decision.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By JamesA11 on 09/18/2017 5:47 PM
Here is part of my HOA's Bylaws.

(d) No full-time or part time employee of the association, EXCEPT as described below, can be related, Directly or through marriage, to any member of the association's Board of Directors.
"Related Directly" includes Parents, Children, Grand Parents, Grand Children, Siblings, and Cousins.

"Related by Marriage" Includes any Spouse's Parents, Children, Grand Parents, Grand Children, Siblings and Cousins.

This does not apply to relatives hired as Summer, Seasonal, Part-Time and Per Diem employees (i.e., Lifeguards, Boat tenders, Maintenance assistants etc.).

Now question here, If a elected Board members Sister in Law worked as a part time employee (2.5 hrs a day max, 5 days a week max appx. 13 hrs a week) during the School year ONLY. would the above bylaw prohibit her from working, or the Board member from serving on the Board? If as you noted above your documents state ... "This does not apply to relatives hired as Summer, Seasonal, Part-Time and Per Diem employees (i.e., Lifeguards, Boat tenders, Maintenance assistants etc.). Then potentially NO; however, we are not attorneys and that is something you need to verify with your HOA attorney.

Part two...If a seated Board member's WIFE was employed and worked every 3rd day on weekdays (12 hours 2x a week, plus 24hrs on a weekend total of 48 hrs.) . She is listed as a part time year round employee. Would the above bylaw prohibit her from working, or the Board member from serving on the Board? Again ... you should consult an attorney. From layman term ... potentially 48 hours is NOT part time.

Part Three, If the Wife was allowed and the sister in law was NOT allowed. can this be considered Discrimination, due to rule NOT being enforced on the wife, And enforced on the sister in law? NOT if fall under different sections of the documents. The BIGGER QUESTION is WHY are you allowing BOD Member relatives or HOA Owners to fill these positions??? As you have noted this type scenario causes problems ... and YEP if you ever needed to FIRE one of them it potentially will cause even bigger problems within your HOA membership. In future ... avoid this scenario.

Can a HOA be held legally liable for the above, if one is enforced but not the other? Again, depends on document and State Law violations. You need to verify with your attorney.

Thank you in advance
J.A.

DaveD3 (Michigan)
Posts: 796

Posted:

A legal opinion would certainly be best.

The armchair version:
13 hours per week is part-time. No issue, no matter the relationship (per the excerpt that was posted)

48 hours is full-time by any measure. Potentially an issue. HOWEVER, "spouse" is not listed as a "direct family member" on your list.

JamesA11 (Pennsylvania)
Posts: 5

Posted:

Small update,

During closed work session the Issue was to be discussed. The President and Vice President told the Elected board member of the part time sister in law, He had to leave the room for the discussion. All remaining BOD members were told this is a confidential matter and can not be discussed with the BOD member asked to leave.

In email (to ALL BOD members) prior to the meeting, this BOD member requested a copy of the paperwork pertaining to this issue from the lawyer . He also requested to know when he can be scheduled to talk to the community's lawyer (Since he is a elected BOD member, and the lawyer represents him as a BOD). He said in the work session he still has not been given the opportunity to talk with the lawyer OR received the requested documents.

Now he was asked to leave the work session so said as per community lawyers advisory. The other BOD member whos wife works as well was allowed to stay. I feel this makes for a bad situation, how can this apply to one but NOT the other?

The BOD is going to possibly vote on the fate of this BOD member (sister in law , 15 hrs part time seasonal) . The Vice Presdient is the one pushing the issue because he does not want the guy here for his own personal reasons.
Should he abstain from voting since he is the one to make the resolution? And what about the other board member whos wife works 40+ hours, who is not being questioned at all to his BOD membership. Should they both Abstain from voting?

Thoughts?

Thank you Kindly,
James

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By JamesA11 on 09/24/2017 7:24 AM

In email (to ALL BOD members) prior to the meeting, this BOD member requested a copy of the paperwork pertaining to this issue from the lawyer . He also requested to know when he can be scheduled to talk to the community's lawyer (Since he is a elected BOD member, and the lawyer represents him as a BOD). He said in the work session he still has not been given the opportunity to talk with the lawyer OR received the requested documents.

On any given issue, your HOA's attorney has, as a client, the board majority on the issue. If this minority board member wants legal counsel, he has to find another attorney and pay for it himself.

As for the legal paperwork being turned over to the minority board member, I think I would vote no. But if a board majority wants to turn it over, then I would ask that the board as a whole get a legal opinion on this. What's at stake here is a wrongful termination yada legal complaint from the employee. Hence it is in the corporation's best interests not to share any of my HOA's legal strategy, including advice from the HOA attorney, in dealing with the situation. If the employee or minority board member start threatening legal action, then the HOA attorney might write a letter specifically to the employee or minority board member.

SueW6 (Michigan)
Posts: 814

Posted:

No need to bother a lawyer. Just read the bylaws.

'Seasonal' and "part-time' are the clue words here.

Tell me, doesn't your board have more important things to do?

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By JamesA11 on 09/24/2017 7:24 AM
Small update,

During closed work session the Issue was to be discussed. The President and Vice President told the Elected board member of the part time sister in law, He had to leave the room for the discussion. All remaining BOD members were told this is a confidential matter and can not be discussed with the BOD member asked to leave.

In email (to ALL BOD members) prior to the meeting, this BOD member requested a copy of the paperwork pertaining to this issue from the lawyer . He also requested to know when he can be scheduled to talk to the community's lawyer (Since he is a elected BOD member, and the lawyer represents him as a BOD). He said in the work session he still has not been given the opportunity to talk with the lawyer OR received the requested documents.

Now he was asked to leave the work session so said as per community lawyers advisory. The other BOD member whos wife works as well was allowed to stay. I feel this makes for a bad situation, how can this apply to one but NOT the other?

The BOD is going to possibly vote on the fate of this BOD member (sister in law , 15 hrs part time seasonal) . The Vice Presdient is the one pushing the issue because he does not want the guy here for his own personal reasons.
Should he abstain from voting since he is the one to make the resolution? And what about the other board member whos wife works 40+ hours, who is not being questioned at all to his BOD membership. Should they both Abstain from voting?

Thoughts?

Thank you Kindly,
James

Any BOD member who has any relative involved in any BOD vote ... needs to EXCUSE themselves from any such vote for the HOA.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By JanetB2 on 09/25/2017 11:08 PM
Any BOD member who has any relative involved in any BOD vote ... needs to EXCUSE themselves from any such vote for the HOA.

I'd go further. Not only should such a director not vote, they should leave the room while those who will be voting discuss the issue/contract.

SueW6 (Michigan)
Posts: 814

Posted:

If a MANAGER hired the company or firm, then the board is not involved at all. The manager should follow the hiring policies.

If the Board hires, it should have been blind bids or applications, so no one would know the names of these people.

JamesA11 (Pennsylvania)
Posts: 5

Posted:

Update..

The BOD member who has a sister in law was sent a letter from the community lawyer. It state he and his sister in-law are in violation of the bylaw. The BOD has determined that the BOD member and his sister in law to make the decision by a set day. If they DO not make the decision, the BOD has the right to make the decision as per the lawyers letter.

Upon further review of this situation the Lawyer says she is "PART TIME" please see original post, last paragraph of the bylaw . Then goes to say that unfortunately there is NO clear method to determine whether SHE should be terminated from her job, or the elected BOD member be removed.
Also found that the sister in law works about 18 hours a week average for the school season. The wife of BOD member works 56 hours a week average (BUT is said to not be in violation of the bylaw)

Current community employee hand book states the following.
FULL time employee work is scheduled to be more than 35 hours a week.
PART time employees work is scheduled to be LESS than 35 hours a week.
Per Diem employees are hired temporarily on a AS needed basis.

Thoughts?

JohnB83 (South Carolina)
Posts: 124

Posted:

Thank you, yes, I have thoughts.

So does the attorney who is handling this issue.

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