Fired manager cleans up in more ways than one

Question: I’m a board member of my association. Four years ago, a prior board hired a manager whom this board just fired. We gave her two weeks to “clean up loose ends.” Soon we heard the shredder churning more than usual but didn’t think anything of it. When she returned our keys, all the files appeared to be in place in the drawers and cabinets, and nothing looked unusual.

It wasn’t until after the directors signed a “hold harmless” release saying that everything was in order that we noticed many file folders, original documents and their contents were missing, including confidential papers. Nothing was as we first thought, and we have no idea what she took or destroyed because we don’t know what we had.

After her termination, we got an astronomical telephone bill showing calls made overseas for two weeks. When she was first hired, we didn’t have the manager sign a confidentiality agreement, and on departure we didn’t secure any protection agreements not to discuss our association business with others. We have reason to believe she took copies of personal dossiers accumulated by various boards on certain homeowners and has shared those with several vendors. We paid the manager a generous severance package and an additional bonus for the good cleanup job. What recourse do we have against her?

Answer: Some homeowner association boards of directors’ duties can’t be delegated, meaning, a board’s duties and obligations do not end when a manager is hired. The board remains responsible for the manager’s acts, and the failure to supervise or oversee those acts does not excuse any board directors from their duties.

At the heart of this issue is the board’s failure to supervise the manager and to obtain periodic assurances that she was competent. When a board does not provide proper supervision, it bears the blame, and recourse or recovery may be limited.

Signing the agreement offered by the manager after termination was an act of irresponsibility on behalf of the board. At the very least, counsel should have been consulted before signing such a document.

Because of the board’s decisions in this situation, the association should hire an experienced labor attorney to facilitate a resolution. Schedule an appointment with the board, the labor attorney and the ex-manager. Have the attorney explain the consequences if the manager decides not to cooperate with the board in resolving this issue amicably. Explain that confidential material belonging to the association is missing and ask for its return. Request the return of all personal dossiers along with written assurances of nondisclosure. Then present the telephone bill and ask for reimbursement. If necessary, implement a payment plan in exchange for not filing a police report.

When terminating an employee, especially one in a position of authority with the ability to do great harm, it is best to end the employment quickly.

Cancel any credit cards that may be outstanding and scrutinize bills; collect all keys and other related items on the day of termination.

Change combination locks and passwords to which the manager may have access.

Boards cannot shift their obligations and duties to a manager. A policy for protecting owner privacy and safeguarding association documents containing members’ confidential information should be put in place at the time of hiring.

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