By Lester Rosen, President of ESR
(Originally Published on HR.Toolbox.com)
It’s a sobering thought, but every time a recruiting professional makes a placement, there is the possibility that new hire can put them out of business.
Why? Because if a dangerous, unqualified, unfit, or dishonest candidate is placed in a job and harm occurs, the hiring firm risks a lawsuit for negligent hiring. Perhaps just as importantly, a bad placement can result in loss of business and damage to a professional reputation that may have been years in the making.
The root of the problem, of course, is that some candidates lie on their resumes and applications. Industry statistics suggest that up to 10% of applicants can have criminal records. Fraudulent misrepresentations as to education and employment occur in as much as 40% of the time, according to some studies.
Individual recruiters can, in fact, be sued for negligence if harm occurs, and if she or he knew or should have reasonably foreseen that a bad placement could cause a problem. At that point, the heart of the staffing professional may sink when those dreaded words echo across the courtroom: “Ladies and Gentleman of the Jury.”
Those are words you never want to hear, and a situation in which you never want to be. Your protection and your best defense is to exercise “due diligence,” which means to verify the representations and qualifications of the candidate.
The allegation in a “Negligent Hiring” lawsuit (or “Bad Hire” lawsuit) would be that the staffing professional placed someone that they either knew or, in the exercise of reasonable care, should have known was unfit or dangerous. Of course, since a staffing professional would not intentionally place someone who was dangerous or unfit, the question before the judge or jury is whether the staffing professional reasonably should have known that the placement was bad if they had only exercised a greater degree of care in screening the applicant.
In such a lawsuit, a staffing professional would need to show, for example, whether credentials and education were verified, whether past employment was checked, and whether a criminal background check was done.
Lawsuits occur usually in cases where there is some sort of serious harm either to a business, such as embezzlement, or theft, or to an individual, such as assault, rape, child molestation, identity theft, or even homicide.
A staffing professional who is responsible for a bad placement can be sued by a number of parties, including the business entity that relied upon the professional judgment of the recruiter or staffing firm. Certainly, a co-worker or member of the public who was injured by the bad hire can sue for damages.
The worst case scenario would be that the bad hire resulted in the death of a fellow worker, and the victim’s family is suing for wrongful death. This is just what happened in a highly publicized case in California. A 28-year-old female winery worker was stabbed to death by a co-worker who was a convicted murderer and had been placed at the winery by a temp agency. The agency did NOT conduct a background check. The jury awarded the family $5.5 million.
If a recruiter is sued, it may well be an uphill battle to win in court. The jury will hear evidence that the recruiter recruited, recommended, or placed the offender. In most cases, the staffing professional probably makes representations about the quality of their services. The staffing professional’s website and sales literature may suggest that they provide only the best candidates who are carefully screened. However, in the world of recruiting, “screening” really only means that resumes have been reviewed to determine a good fit as opposed to “background screening” for criminal records and verification of facts represented on the resume.
The employer, hoping to lay the blame onto someone else, will of course claim that they relied upon the professional abilities of the staffing professional to send them qualified and safe candidates. There would likely be evidence that the recruiting or staffing firm made a fee on the placement. In the end, the attorney for the injured or deceased employee would ask jury members, “Didn’t the staffing professional have not only the resources and opportunity, but also the duty to conduct employee screening on the potential employee before approving their introduction into the workplace?”
In this scenario, it is not likely that the jury members will have much sympathy for the hiring firm or staffing professional.
Some recruiting professionals have resisted the idea of background checks because they feel that with their years of experience, they are good judges of people. That is no longer a defensible position, nor is it even accurate. A growing body of scientific evidence suggests that even the most experienced recruiters cannot eliminate potential bad hires by detecting lies and evasions at the interview. Studies show that even though people believe they can detect liars, most people have only a 50-50 chance at best of detecting a liar. According to one recent study, even trained law enforcement officers are only right a little over half the time. The traditional means of reading body language, for instance, to screen out liars are useless against an accomplished con artist who can tell stories very convincingly.
Some recruiters may be concerned that background checks add to the cost of their services or hinder placement with unneeded delays while screening results are obtained. However, in today’s litigious world, recruiters and staffing professionals need to make a risk-management assessment: Is saving a few dollars and a little time worth playing Russian Roulette with each candidate you send out? Which one of these candidates will land you in court, or on the front page of the newspaper? Will your professional reputation be tarnished forever, perhaps beyond repair?
The bottom line is that due diligence and background checks go to the very integrity of the product being sold by recruiting and staffing professionals — workers who are qualified and fit for the job. Selling staffing services without knowing who you are sending to a client’s business would be like selling medicine with no idea of what is in the bottle.
Staffing and Search professionals have traditionally focused on Sourcing and Sales. It is worth noting that at some recruiting conferences, there are a large number of sessions devoted to making money through finding candidates and selling services. However, there are few sessions, if any, on the subject of how to ensure the integrity of the very product being sold. Recruiting and staffing professionals can protect their own business, their clients, and the public by shifting their focus from just Sourcing and Sales to Sourcing, Verifying and Sales.