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When you’re trying to fill an essential role quickly, it may be tempting to skip background checks and screenings. Read on to see why this is never a good idea and how to protect your company from charges of negligent hiring.

What Is Negligent Hiring?

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.

Examples of Negligent Hiring

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.

The Truck Driver

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.

The Delivery Man

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

The Home Health Care Provider

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.

The Impact of Negligent Hiring

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.

Financial Impact

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.

Company Reputation

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?

Employee Safety

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.

How to Avoid Negligent Hiring

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.

Step 1: Check Criminal Records

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.

Step 2: Contact Previous Employers

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.

Step 3: Confirm Qualifications, Degrees, and Certifications

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.

Step 4: Consider Drug Testing, Motor Vehicle Checks, and Credit Reports

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.

The Legal Consequences of Negligent Hiring

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.

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Questions You’ve Asked Us About Negligent Hiring

Most states have some provision that holds employers liable for negligent hiring, but they apply different standards. It’s best to check the guidelines for the states in which you have employees.

If an employee causes harm to another employee or to the public in the course of their employment and this employee had demonstrated the propensity to cause similar harm in the past, the employer may be liable for negligent hiring if they didn’t take the steps to properly screen the employee before hiring them.

It’s extremely expensive financially when employers are found liable for negligent hiring. It’s also extremely damaging to the reputation of the company and can result in the loss of customers and employees who no longer feel safe doing business with or working for a careless employer.

Carol Eliason Nibley, SPHR, GPHR and Principal Consultant at PeopleServe, has more than 25 years of experience in human resources, most recently serving as Vice President of Human Resources for a technology company in Utah County. Carol has taught HR certificate courses at Mountainland Technical College and in other settings for more than 12 years.

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