Case Study - Apartment Complex

Could This Have Been Avoided?

Oct 14, 2021

In my quarterly newsletter I referred to a headline which recently caught my eye:

A Los Angeles jury has ordered an apartment building owner and property management company to pay $7.6 million to two former live-in apartment managers who claimed to have been wrongfully terminated and discriminated against based upon a medical condition and disability (thyroid cancer).

September 2021

That same month, I mediated a case where the putative plaintiff was a woman who had been a resident manager of a large apartment complex for over 22 years. This was the first mediation in quite some time where I detected that providing an opportunity for her to air her “real” concerns (as opposed to those translated by counsel into potential legal claims) directly to her boss would be productive. It was. As we only had half-day, the matter has not yet settled. I devised a potential solution and asked the parties, both of whom were initially reluctant, to seeing if they could negotiate something along the lines I suggested. They agreed. The case ultimately settled based on my proposal.

Oh yeah. The real issues? Dignity and respect, not discrimination.

The Facts According to the Plaintiff

Jane began working for Defendant on or around January 3, 2000, as a Resident Manager. She has worked more than forty hours per week and earns $36,000.00 per year. Jane is sixty-eight years old.

In 2020, Jane began noticing that she was being treated disparately on the basis of her race. Specifically, Jane was given a harder time changing her schedule than Caucasian employees and was made to report to her general manager daily.

In January 2021, Jane was required to take a medical leave to tend to her arthritis, chronic obstructive pulmonary disease (COPD), and congenital heart failure. While she was out, Defendant attempted to replace Jane with a younger, healthier employee. Upon Jane’s return, Defendant retaliated against her by putting her on a six-day probationary period.
Defendant misclassified Jane as an exempt employee. Defendant also failed to provide Jane with the appropriate meal periods and rest breaks. Defendant further failed to provide Jane overtime wages and accurate and itemized wage statements.

When Jane returned to work, Defendants were visibly upset as her return made it more difficult to give her position to the younger employee. Jane was called into a meeting with representatives of Defendant. During the long meeting Jane was told how inconvenient it had been for her to take her medical leave, as it had increased others’ workload. Defendant largely disregarded that her health had been in jeopardy. Instead, immediately upon her return, her boss told Jane that she was being put on a thirty-day probationary period.

Jane had no choice but to abide by the thirty-day probationary period. She met with her boss the end of it. He gave her an arbitrary list of twenty-nine things to grade herself on, which Jane completed honestly. Rather than accepting her self-grade or giving her clear feedback, the boss decided to further discriminate against Jane and extend her probationary period for an additional thirty days.

At the completion of the sixty-day probationary period, Jane’s health deteriorated again. She was forced to take another medical leave in June 2021 for approximately three weeks. Upon her return from her second medical leave, Defendant further retaliated against her by increasing her workload, targeting her, and pressuring her to complete an unreasonable number of tasks. When the employee who was meant to help Jane with her task list quit, Defendant failed to hire someone else, leading to greater stress for Jane.

Jane often was required to work more than forty hours per week to complete her work. When she discussed overtime pay with her boss, he stated that he did not believe in paying overtime wages. Employees were required to get permission to work overtime hours. As a Resident Manager, Jane often had to work overtime for emergencies and was unable to wait to get permission from her boss. The boss maintained that he would not pay her for overtime hours worked, and Jane felt she was unable to add the overtime hours she worked to her time sheets.


Jane’s Legal Claims

Jane asserted claims for Discrimination, Retaliation and Harassment under the FEHA. CFRA/FMLA Violations and Retaliation and Wage/Hour Claims.


The Mediation

I spent most of the mediation asking questions of the parties in separate rooms to understand what was really underlying this dispute. The building owner was adamant that Jane was not able to do the work required and had numerous examples. Not surprisingly, there had been very little documentation of any problems over Jane’s 20-year career. The truth is, the owner actually liked Jane, thought she was good with the tenants, and had tolerated her less than stellar performance for 20 years. Even Jane admitted that she was not able to keep up with all the work. She attributed this failure to her health issues.

After several hours, it appeared to me that both parties could benefit if Jane was permitted to “speak her mind” to her boss outside the presence of the lawyers. I persuaded counsel that this would help the process. I then moderated the discussion between the principals to make sure it stayed on track and that the parties spoke respectfully, If candidly, to each other.

That dialogue seems to open the door to a solution I proposed that allowed both parties’ interests to be served and avoided a lawsuit. After a week or so of consideration, the parties signed an agreement based on my proposal.

Moral of the story. Use mediation to uncover underlying interests, not positions and craft a solution that addresses as many of the interests as possible.

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