Negligent hiring occurs when an employer hires someone it knew (or should have known) was unfit for the position. At times you may feel some desperation to fill jobs quickly, perhaps bypassing pre-employment background screenings. Unfortunately, some candidates misrepresent their credentials, capabilities, and criminal histories on their resumes and application forms. If hired, these employees may cause harm to other employees or to customers, and you could be liable.

Negligent hiring can lead to a costly legal claim for companies that hire someone without taking proper care to investigate their criminal and work histories as well as their competence for a position. Here are a few examples that show how costly negligent hiring can be.

A truck driver was involved in multiple accidents, terminated from several companies, and convicted of felony reckless aggravated assault, but he was hired anyway by a company that decided to accept his “marginal” record. Unfortunately, he was involved in yet another accident that caused lasting disabilities for another driver, and his company was forced to pay $54 million dollars in a court verdict.

A furniture delivery man attacked a female customer in her home. A jury awarded the customer $2.5 million dollars.

A “healthcare professional” was hired to care for a home health patient but had never attended nursing school as he had alleged. He also had several felony convictions. The agencies that placed this caregiver never conducted a background check on this employee, who caused the death of his patient. A jury awarded the patient’s estate $26.5 million dollars.

Not only is negligent hiring potentially costly to employers in terms of money, but it can also be costly in other ways. Let’s explore some of the consequences of negligent hiring.

Expensive jury awards remind employers that they can be financially responsible for the actions of their employees if they didn’t exercise reasonable care in screening them for fitness. Besides jury awards, the cost of defending a negligent hiring lawsuit can be very expensive.

Companies may struggle to regain their reputation after an incident of negligent hiring becomes publicly known. Imagine the fallout if a daycare center has an incident of child abuse because of their poor screening practices! How many parents will send their children to this facility in the future? Or if someone with a history of credit card theft has access to the financial information of his employer’s customers and fraudulently uses this information for personal gain—how likely is it that these customers remain loyal to the company?

Employees want to work for companies where they feel safe and respected. Companies that aren’t careful in their hiring practices put their employees at risk and damage the trust employees have in their employer. Harassment, assault, rape, and other types of aggression are a few of the dangers employees may experience when companies fail to screen their candidates properly. Unfortunately, great employees may leave for other opportunities when their employers fail to protect them.

A few simple practices can greatly reduce the risk of negligent hiring claims, thereby avoiding some of the unfortunate consequences of negligent hiring. Having consistent practices and documenting them well will be valuable if it becomes necessary to defend a negligent hiring claim.

Employers should get a criminal record check for candidates prior to or immediately after extending an offer of employment. This allows employers the opportunity to review which criminal histories are relevant to the position and make appropriate decisions moving forward. Because of certain “ban the box” laws that prohibit criminal history inquiries in the early stages of the application process, employers should exercise care to follow the laws of their jurisdictions. Employers also need to comply with EEOC guidelines to avoid disproportionately impacting protected-class applicants. It’s important to comply with the Fair Credit Reporting Act to allow candidates the chance to correct any misinformation in their records. The practice of checking criminal histories is one of the best ways to defend against claims of negligence.

Checking references, especially those of previous employers, can be helpful to determine if the employee has a history that would make him unsuitable for a position in your company. Under the doctrine of negligent referral, companies have a duty to provide information to prospective employers about any serious behavior problems the candidate may have engaged in that could possibly be repeated (such as stealing, harassment, or violence). Don’t be tempted to skip this step thinking it won’t yield anything but a neutral reference. The previous employer may be liable for not providing this information if you requested but didn’t get it. Additionally, look for gaps in someone’s employment history and verify legitimate reasons for them.

While it may not be necessary for every position, confirming a candidate’s credentials is critical in certain roles and industries. Hiring a doctor or nurse could involve life-threatening injuries if someone misrepresents their education. Hiring a professor requires validation of their previous education, and so on.

Some positions require more background screening than others. Candidates who will operate machinery or work in safety-sensitive positions should be drug tested. Candidates who will be driving as part of their duties should have a motor vehicle check. Candidates who will have access to company financial information may need a credit check. Some candidates may need a medical exam if their health and fitness are relevant to the position. The nature of each position and severity of risk should guide employers in creating policies for validating the competence of candidates in a consistent and fair manner.

Employers have a duty of care to ensure the well-being of other employees and the public with whom their employees will interact. If an employee is shown to have a propensity for engaging in inappropriate or dangerous behaviors and the employer could have known about this risk with proper precautions–sometimes called foreseeability–the employer will likely be liable for negligence.