Tag Archives: due diligence

The Use of Home Operators

Some screening firms use home based operators to perform employment and education verifications.  That of course represents a big financial advantage for the screening firm.   They get cheap labor, and may even classify them as independent contractors in order to get even additional savings by not paying workers’ compensation, benefits or other costs associated with employees.    However, it does very little to help employers.  Below are the top 10 reasons NOT to utilize a background firm that sends your applicants’ personal data to home operators working from kitchen tables and dorm rooms across America.


  1. Privacy: A screening firm would be directly responsible for making private information viewable and printable on people’s home computers.
  2. Professionalism: A screening firm would have difficulty accurately claiming that at-home researchers are “professionals” when they are unsupervised, unregulated and acting as cheap substitutes for what is supposed to be a professional service. Ask yourself how the sound of barking dogs, crying babies and television sets in the background may strike those asked to provide verifications.
  3. FCRA Defensibility: A screening firm would  have difficulty defending the practice of using at-home researchers against a claim under FCRA section 607(b) concerning reasonable procedures for accuracy.
  4. IC Classification: A screening firm cannot classify someone as an Independent Contractor (IC) when they work only for you, when you tell them exactly how to do their job, and when they are providing the same core services provided by your in-house staff.
  5. Training/QC: A screening firm cannot train and discuss production issues in real time. It is also difficult for at-home researchers to learn from each other when everyone is working in isolation. Furthermore, since everyone works alone it is harder to enforce quality rules across the entire organization.
  6. Supervision: Unsupervised at-home researchers are very difficult to supervise. In addition, since they are paid by the completed verification, they may be more tempted to fake orders since there is no one supervising them in real-time.
  7. Reliability: A screening firm would  be dependent entirely on the researcher’s priorities, which may not be your own. They may put a hair appointment ahead of your forty new verifications that have to be called today. You want load balancing to be under your control and not secondary to at-home researcher’s personal schedules.
  8. Hidden Costs: There are hidden costs to managing and maintaining multiple remote researchers as opposed to a central pool of talent. Take, for instance, the time lost to the unreliable performance of at-home researcher’s internet connections, home computers and printers.
  9. Due Diligence: A screening firm and employer could face significant legal exposure if the  at-home researcher’s performance falls below a professional standard of care due to lack of training and supervision.
  10. Disclosure: Would you want to disclose to your applicants that the sensitive, personal data and professional service they’ve entrusted you with was being performed by unsupervised home workers?


ESR does not utilize any home based or offshore operators in order to  provide you with critical employment and education verifications.  All work is done in a professionally supervised call center dedicated to the highest level of customer service, privacy, accuracy and speedy turnaround time.

Negligent hiring and retention leading causes of employment lawsuits

A recent article in the Connecticut Law Tribune re-enforces what ESR has been telling employers for some time—that lawsuits for negligent hiring and negligent retention are among the most common claims against employers.

Per the articles, “The difference between the hiring and retention claims is when the employer became aware of a threatening employee; often, the arguments are that employers inadequately screened job applicants or failed to act on complaints about an employee who later committed a violent act.”

The story concern workplace violence and employee behavior that can be hostile, threatening or violent.  This can lead to lawsuits seeking damages for emotional distress, a hostile workplace all the way to damages stemming form violence where a person is the victim of a workplace crime.  The article noted that, “In a bad economy, stress increases and people’s fuses get shorter.”

The article cites a study in the 1990s, where “liability expert Norman D. Bates conducted a study that found workplace violence tort cases averaged $500,000 per settlement and a $3 million per jury verdict.”

According to the article:

“The potential for litigation seems to be high, based on U.S. Department of Labor statistics. On average, more than 2 million acts of violence occur in the workplace every year. When it comes to assaults, women are targeted at a much higher rate than men, both in Connecticut and nationally. From 2005-07, the U.S. Department of Labor tracked 1,250 non-fatal workplace assaults in Connecticut, and women were the targets in 77 percent of those cases. On the national level during the same period, women were targeted in 63 percent of the more than 47,000 non-fatal assaults.”

The article discussed that while many employers are focused on preventing workplace homicides, there are many lesser acts of hostility, such as workplace intimidation, bullying, sexual harassment and psychological abuse that can be red flags for future violence that also need to be addressed.

The article suggested solution that employers can utilize to minimize the chances of a lawsuit stemming from workplace hostility and violence.

See:   Taking Aim At Workplace Disputes at http://www.ctlawtribune.com/getarticle.aspx?ID=35073

Selecting an employment background screening firm

An essential element of any due diligence plan is a yearly audit of your current practices.  In the event of a worst case scenario, and an employer hires someone that is unfit, unsafe or unqualified, the best defense is that the employer exercised due diligence in its hiring practices, including the choice of a screening firm.  ESR has developed a checklist, provided below, that can be used to send to a screening provider every year to document your due diligence and to measure the effectiveness of your current screening program.  For a Word version, contact Jared Callahan at 415-898-0044 or email him at jcallahan@esrcheck.com.  More information is at www.ESRcheck.com .

This is a yearly process to document that our company is utilizing due diligence in its employment screening processes.  Please fill out and utilize additional paper if necessary.

  1. Have there been any material changes in the past year that would adversely affect your ability to provide industry standard employment screening reports?
  2. Is all work performed in the USA to protect privacy and control quality (i.e., nothing sent offshore to India or other places)?  If not, please explain in detail how privacy is protected. (See: http://www.concernedc ras.com/)
  3. Are all employment and education checks conducted by professionals in a controlled, call center type environment, so that nothing is sent to at-home workers?  If not, please explain how data privacy and the quality of work are monitored.
  4. For employment verifications, are anti-fraud procedures in place, such as independent verifications of all past employer phone numbers instead of relying upon an applicant supplied number?
  5. For education verifications, are steps taken to verify whether a college or university is accredited and to watch out for Diploma Mills?
  6. Are criminal searches conducted using the most accurate means, which normally means on-site (no database substitutes)? (See: http://www.concernedcras.com/)
  7. Do you search for both felonies and misdemeanors when available?
  8. When a criminal hit is reported, does a knowledgeable person in your firm review the findings to determine whether there are any legal issues in reporting the findings to the employer (as opposed to having the information entered by a court researcher)?
  9. When there is a criminal “hit”, do you contact the employer immediately to advise that there is a potential problem?
  10. Does your firm take measures to ensure that ALL legal and relevant criminal records are searched, as opposed to just going back “seven” years?
  11. If a client orders a “multi-jurisdictional” database search, do you re-verify any criminal “hit” at the courthouse level for maximum accuracy, instead of relying on notifying the applicant of a potential hit? 
  12. Do you notify your clients of changes in the FCRA and other applicable laws?
  13. Do you at least, on a yearly basis, conduct an internal FCRA compliance audit?
  14. Do you offer international background checks? If “yes,” please describe
  15. Is your firm “Safe Harbor Certified” to perform screenings of applicants from the EU (European Union)?
  16. Do you have data protection, privacy security and data breach policies?  If so, please provide information.
  17. Are you a member of the background screening trade association, the National Association of Professional Background Screeners (NAPBS), and does your firm actively participate and support professionalism in the screening industry?
  18. What is your average turn-around time?
  19. If there is a delay for reasons that are out of your control, are your clients notified online with in-depth notes and the anticipated ETA of information?
  20. Are your clients provided with written documentation and resources on safe hiring, due diligence and legal compliance issues?
  21. Are your clients provided with upgrades in technology that would enhance workflow, such as the ability to have applicants consent online or integration with an ATS or HRIS system?
  22. Please describe your initial training program for team members that work on our account, as well as any ongoing training.

Debate: Can a business connection site be more valuable then a resume?

According to some bloggers, the suggestion has been made that using business connections sites is more accurate then resumes, since a candidate is not as likely to lie on an online service where many friends and colleagues may see it.

Looking at business connection sites during the recruiting or selection stage can certainly be another tool for HR or recruiting to try to differentiate a large group of candidates and whittle it down to a smaller group. Even then, there are significant issues to keep in mind, such as the potential for discrimination. In addition, if a person lies on a social networking site, there is no direct consequences. These sites do not contain a comment area where others can disagree, or to warn employers that qualifications are overstated. In addition, colleagues may not even know that an applicant has lied. If an applicant has listed a certificate or educational accomplishment that is not true, exactly how are colleagues suppose to knew that, much less bring it to anyone’s attention.

In addition, the suggestion without metrics that people do not lie on a social network site because others will view it will likely be much of a defense in court if a firm hires a fibber, and it turns out a background check costing a few dollars would have revealed it.

The bottom-line once again: There is nothing as effective as actual verification of a candidate’s claimed experience.

For more information on the use of social newtwork sites and employment, see: http://www.esrcheck.com/articles/Caution-Using-Search-Engines-MySpace-or-Facebook-for-Hiring-Decisions-May-Be-Hazardous-to-Your-Business.php

Texas Lawsuit Accuses Apartment Owner of Negligence in Hiring Register Sex Offender as Maintenance Worker that Raped 14 Year Old Girl

According to a storey in the Southeastern Texas Record, a lawsuit has been filed against an apartment building owner in the rape of a tenant, a 14 year old girl, by a maintenance worker that was a registered sex offender.  It was alleged that the employee repeatedly sexually assaulted the victim at knifepoint for an unspecified number of hours. The victim apparently went to the offenses apartment for a tattoo.   The offender has been arrested and is now in jail.   

See: http://www.setexasrecord.com/news/219599-apartment-management-knew-of-sex-offender-on-staff-victims-mother-alleges  

According to the story, the plaintiff has alleged  that the apartment owners “ knew or should have known of Juan Lauderdale’s dangerous and exploitative propensities as a child sexual abuser, and despite such knowledge, negligently retained (Juan) Lauderdale and failed to warn those coming into contact with him, including minor plaintiff and the minor plaintiff’s family, of (Juan) Lauderdale’s propensities.” 

The plaintiff has also alleged that, “ As a direct and proximate result of the sexual assault and the negligent conduct of the defendants, minor plaintiff suffered severe and permanent emotional distress, physical manifestations of emotional distress, embarrassment, loss of self-esteem, and other psychological injuries.” The suit says, “These affects are permanent and will abide with the minor plaintiff for her entire life.” 

Keeping in mind that this case is only at the beginning stage, and no factual determinations have been made or any issues litigated, this type of case once again underscores that a higher risk position requires a higher degree of due diligence.  Negligence is essentially a violation of the duty of care, and that duty increase where there is a greater foreseeable risk.   

One of the classic areas where a greater duty of care is needed is apartment buildings where it reasonably foreseeable that great harm can occur if a person with an unsuitable criminal record is entrusted with keys, or has access to tenant under some sort of color of authority.  Based just upon the allegations in the paper, this case may be complicated by an argument that it is not reasonably foreseeable that a worker would entice a young tenant to an apartment, or that such actions were independent of the job duties so that any negligent hiring was not the proximate cause of the injuries.  

These cases can become very complicated depending upon the exact facts that are established through discovery.   Regardless of the final outcome, it does appear that an ounce of prevention can keep this type of situation from occurring the fist place.  

It should be noted that the maintenance worker according to the story was on the sexual offender list due to a sexual offense on young girl in 1996, some 12 years ago.  See the preceding blog about a study that suggests that after a few years, a person is not likely to represent a greater risk then a member of the general population that never offended.

Why Interviews Are Not an Effective Means to Tell if a Job Applicant is Lying on their Resume or Job Application

Even if Diogenes had found an honest person, there is a body of modern evidence that suggests it is difficult for anyone, from ancient philosophers to modern day employers, to use an interview to determine who is really who. Employers have a distinct challenge when it comes to spotting liars; industry statistics suggest that as many as 30% of all job applicants falsify information about their credentials, but trying to spot liars at interviews is, well, difficult, if not impossible.

There are lists of so-called “tell-tale signs” that a person is lying . For example, employers might observe if a person is avoiding eye contact, fidgeting, or hesitating before answering. Unfortunately, it can be a costly mistake for an interviewer to think lying can always be detected by such visual clues by relying upon one’s own instinct or intuition, since some of the so-called “visual clues” can simply be a sign of nervousness about the interview, or stress, and not an intent to lie. In fact, accomplished liars are more dangerous because they can disguise themselves as truthful and sincere. An experienced liar will often show no visible signs.

The problem is further complicated because many people feel they can detect who is lying and who is not. Studies have demonstrated that most people are poor judges of when they are being told the truth and when they are being deceived. Paul Ekman , a psychology professor in the Department of Psychiatry at the University of California Medical School in San Francisco , is the author of thirteen books, including Telling Lies. Ekman has tested about 6,000 people who are professionals trained to spot liars, including police officers, lawyers, judges, psychiatrists, and agents of the FBI, the CIA and the Drug Enforcement Administration, to determine if they can tell if someone is lying. According to his research, most people are not very accurate in judging if a person is lying. The average accuracy in studies is rarely above 60%, while chance is 50%. Even among professional lie catchers, the ability to detect liars is not much better than 50%. In one study, customs agents who interviewed people at customs stations did not do any better than college students.

Some interviewees tell lies they have ingrained in their life story. They have created identities and legends of their own and, when they tell their stories, they are not fabricating on the spot. They put “it” on their resumes and talk about it and tell their friends about it. It becomes part of their personalities and personal histories because they have told it so often. It becomes second nature as they retell it again and again.

Conversely, even if a hiring manager does have an inkling a person is lying at an interview, a hiring manager may squash that instinct as just a feeling and not act on it.

That does not mean that some liars cannot be detected at interview. Some firms offer a one-day course specifically designed around interviewing of applicants. However, for most people, it’s a flip of the coin.

Employers, HR and Security professionals should remember that as valuable as instinct may be, it does not substitute for factual verification of an applicant’s credentials through employment screening  background checks and other safe hiring techniques.

Employment Screening Resources (ESR) Releases New Training DVD for Background Checks

ESR has released a press release today announcing the release of a professionally produced 36 minute video re-enactment of portions of a negligent hiring trial.

As the press release states,” The DVD of a negligent hiring trial, filmed in an actual courtroom, demonstrates opening statements, cross-examination of an HR professional, testimony from an expert witness, closing arguments, and jury instructions. The DVD includes re-enactment of a crime as caught on a surveillance camera. Part of the training process is for viewers to act as jurors and to deliberate in order to reach a “verdict” based upon the DVD. ”

The press release can be found at: http://www.prleap.com/pr/134931/