Employee Evictions And How To Handle The Issue

The issue of employee evictions can come up because many communities require their employees to live on-site, and the often include an apartment as part of their compensation.

As in any business, management must sometimes terminate employees.  This article will examine the acceptable grounds for termination and the procedures to require terminated workers to vacate the premises.

Most employees are “at will.”  This means they work at the pleasure of the employer.

The law presumes every employment contract for an indefinite term to be terminable at will.  As an “at will” employee, his or her employment is for an indefinite term at sufferance.  Either party could terminate employment at will for no cause or any cause.  Another term for this is the employment-at-will doctrine.

Management can fire an employee for good cause or no cause, but not for “bad” cause.

For example, an employer and employee agree that the employee will do the required work and employer will provide the necessary working conditions, as well as pay the employee for the work done.

However, there cannot be a guarantee of continued employment or tenure.  The very nature of the “at-will” precludes any claim for a prospective benefit.  Either employer or employee may terminate the contract at any time.

Good cause for handling employee evictions and termination

Good cause for termination includes lying, fighting, destroying company property, inability to perform the duties of the job, and insubordination.  The employer can terminate the employment if he or she makes a subjective determination that the employee’s work is unsatisfactory.

Often times, multi-housing employees receive housing as part of their compensation.  The Arizona Residential Landlord and Tenant Act does not protect these individuals in employee-termination situations.

A.R.S. § 33-1308 states in part:

Exclusions from application of chapter

Unless created to avoid the application of this chapter, the following arrangements are not covered by this chapter…

5. Occupancy by an employee of a landlord as a manager or custodian whose right to occupancy is conditional upon employment in and about the premises.

Management should draft a written agreement stating that employees are not residents; the agreement is not a lease and the time frame for vacating the unit following termination.  If the employee is a current resident, the landlord should cancel their lease agreement and inform the individual that the employee agreement takes precedence over the lease.

Once management terminates an employee, it should personally deliver to him or her a five-day notice to vacate under the conditions of A.R.S. § 12-1173 (the forcible detainer statute).  However, if, at the time of hiring, the employee signed an agreement specifying the amount of time he or she has to vacate, this takes precedence over the statute.

Additionally, it is a good idea to issue this notice at the time of termination.  Although lockouts are permissible as long as they do not cause a breach of peace, most courts do not look favorably on them.  For example, a judgment has in the past awarded $5,000 in punitive damages to a former employee because of a lockout situation.

At the end of the notice period, management may file a forcible detainer eviction requesting possession of the unit, fair rental value from the termination date, attorney fees and costs.  This procedure is identical to a normal eviction for nonpayment of rent.  Following the hearing and judgment, the constable can evict the employee under a writ of restitution after five days.

Consider the following example on handling employee evictions

Clydesdale Apartments hire Miller Tyme and his girlfriend, Amber Lager, to perform maintenance and housekeeping duties.  Apartment manager Bud Wizer requires that the two sign an employee agreement stating they must move out within 48 hours in the event of their termination.

After a few weeks, Bud Wizer smells alcohol on their breath, frequent absences and poor work performances.  The property owners, Mr. Brew and Mr. Stout, elect to terminate Miller Tyme and Amber Lager.  They verbally request that the two vacate within the 48-hour period stated in their contract.

Miller Tyme and Amber Lager refuse to move and the owners file eviction proceedings against them.  At court, Judge Fosters dismisses the eviction because management did not deliver written notice.  On the way out the courthouse, Miller Tyme tells Amber Lager, “It doesn’t get any better than this.”

About the author:

Andrew M. Hull, Esq., Hull, Holliday & Holliday, PLC, www.doctorevictor.com • 602.230.0088