Negligent hiring lawsuits — a serious risk for employers

Lawsuits for negligent hiring are one of the fastest growing areas of tort litigation. Employers are being hit with multimillion dollar jury verdicts and settlements, as well as enormous attorneys’ fees.

By Lester S. Rosen

Every employer carries around a considerable burden when they hire. That burden is the duty to exercise reasonable care for the safety of others. The legal description of the duty of care is called “due diligence.” The employer’s duty to exercise due diligence means the employer must consider if a potential new employee represents a risk to others in view of the nature of the job.

Question: What is a term that can be used to describe an employer who fails to exercise due diligence in the hiring process?

Answer: The term “ defendant,” as in a party who is sued in a civil lawsuit for damages for failure to perform a legal duty.

When an employer fails to exercise due diligence and a person is harmed by an employee, that employer can be sued. The name of the legal action is called, “negligent hiring,” sometimes referred to as the “negligent hiring doctrine.”

Negligent hiring is the flip side of “ due diligence.” If an employer hires someone who they either knew, or in the exercise of reasonable care should have known was dangerous, unfit, or not qualified for the position, and it was foreseeable that some sort of injury could happen to someone as a result, the employer can be sued for negligent hiring. This is called the “knew or reasonably should have known” standard.

Obviously, most employers will not hire someone they know is dangerous, unqualified or unfit for a job. It is the “ should have known” part that gets employers into trouble.

Due diligence is a must
The threat of being sued for negligent hiring is far from theoretical. Lawsuits for negligent hiring are one of the fastest growing areas of tort litigation. Employers are being hit with multimillion dollar jury verdicts and settlements, as well as enormous attorneys’ fees. Firms that do not perform hiring due diligence as part of their standard risk mitigation processes are sitting ducks for litigation.

A program of due diligence also protects the employer in case a bad hire slips through. If an employer can convince a jury that the employer exercised due diligence and acted in a reasonable fashion, then the employer has a powerful defense against a lawsuit.

What if the employer was not aware that a potential hire had a criminal record, or the potential hire lied about not having a record?

Claiming that an employer had no duty to conduct a background check because the employer was not aware of a criminal record or the applicant hid it or lied about it was rejected in a case decided by the Fourth Circuit Court of Appeals in 2004. The Appellate Court, citing an earlier court decision, determined an employer can be liable for the acts of an employee on a theory of negligence, when:

“an employer in placing a person with known propensities, or propensities which should have been discovered by reasonable investigation, in an employment position in which, because of the circumstances of the employment, it should have been foreseeable that the hired individual posed a threat of injury to others.”

See Blair v. Defender Services., 386 F.3d 623 (4th Cir., 2004).

Avoiding a bad hire
Here are three steps an employer can take today as part of the application process to greatly improve their chances of avoiding a bad hire. An employer should make certain that:

STEP 1: All applicants understand there is a background checking policy and that a consent for a background check is required. This discourages applicants with something to hide from applying in the first place.

STEP 2: The employment application asks about criminal convictions in the broadest possible language allowed in your state.

STEP 3: The application contains language that if an applicant lies in the application or hiring process, or omits a material fact, that is grounds to terminate hiring or employment, no matter when discovered.

No excuses
To avoid liability, employers must be proactive in conducting background checks. If someone is harmed by an employee in a situation where it was foreseeable that a bad hire could cause damage, the employer cannot escape liability because it did not know about past criminal conduct. The fact that an applicant denies a criminal record or the employer does not know about it is not an excuse.

Lester S. Rosen is an attorney at law and president of Employment Screening Resources (www.ESRcheck.com), a national background screening company located in California. ESR was rated as the top screening firm in the United States in the first independent industry study. He is a consultant, writer and frequent presenter nationwide on pre-employment screening and safe hiring issues. He is the author of The Safe Hiring Manual-The Complete Guide to Keeping Criminals, Terrorists and Imposters Out of Your Workplace (512 pages, Facts on Demand Press), the first comprehensive book on employment screening.