An Employee’s Side Hustle Could Lead to Legal Tussles

December 28, 2021New York Law Journal

Herrick partner Andrew B. Freedland  and former partner Deborah Koplovitz wrote an article for the New York Law Journal outlining the Dec. 1, 2021 decision in Gundlach, Plaintiff, v. Jaehon Kim, et. al., 73 Misc.3d 1227(A) (N.Y. Sup. Ct. 2021). In this matter, a condominium unit owner asked a building employee, Raul Funes, to help her install a ceiling fan. Unfortunately, one of her guests sustained an injury from this fan and sued his host, who in turn sued her condominium (called the Kalahari), managing board and the employee himself.

Deborah and Andrew explained that the unit owner claimed "Mr. Funes improperly installed the fan too low in her living room, and because he was acting within the scope of his employment for the Condominium, it and its board were vicariously liable for his negligent actions and for failure to properly supervise him." The condominium building argued that they were not liable, as the employee was acting outside his scope of employment. 

Deborah and Andrew highlighted the outcome of the matter and it's implications for other condominium boards: "Justice McMahon found a material issue of fact as to whether 'Mr. Funes’ conduct was … a natural incident of the employment.' Gundlach, 73 Misc.3d 1227(A). This conclusion was made due to statements that the Kalahari was aware that its employees were performing 'side jobs' for unit owners pursuant to a policy which included: (1) charging unit owners for work done by the employees, and (2) submitting unit owner work requests through the building’s informational platform. Permission to perform work for unit owners during normal work hours, provided a basis for the court’s conclusion."

Deborah and Andrew concluded with suggestions for condominium boards to avoid such liability: "a board should strictly limit such 'side jobs' to being performed only outside of an employee’s workday. Moreover, employees should be required to: (1) obtain a home improvement contractor’s license as required by the New York City Administrative Code §20-385 et seq., (2) obtain insurance, including workers’ compensation policies, and (3) sign a contract with the resident indemnifying the board and acknowledging that the work is being done solely as an independent contractor and not as an employee of the cooperative or condominium. Finally, under no circumstances should payments by residents to staff be processed with the assistance of the condominium or cooperative or its management company."

This is discussed in the full analysis that originally appeared in the December 28, 2021 publication of the New York Law Journal. Access may require a subscription.

For more information on condominium and cooperative law matters, please contact:

Andrew B. Freedland at +1 212 592 1623 or [email protected]