Why perform background checks? The primary reason is to protect your employees, clients/customers, suppliers and anyone who interacts with your employees. You have a duty to provide a safe working environment. Done legally, background checks can be an effective screening tool to find relevant information about job candidates. And employers have a duty to provide a safe workplace.
Beyond the obvious issue that you want to avoid – any incident in which an employee causes a problem – the trouble extends beyond the incident if one occurs. The company could face a negligent hiring claim, costing thousands (if not millions) of dollars.
Even without the aspect of keeping everyone safe, the financial risk and return makes it make sense to know who you're hiring. Background checks help to achieve this goal and help to keep higher risk individuals out of inappropriate positions.
"For an employer who doesn't perform a background check, and it turns out that one of their employees does something terrible to somebody else (that they should have caught in the background check), the liability for negligent hiring claims are on the rise—and they're astronomical." Sara Hutchins Jodka told us in a recent CER webinar.
Negligent Hiring Case Examples
Negligent hiring claims are on the rise. Here are some case examples:
- Tallahassee Furniture Co. Inc. v. Harrison. This furniture company was found liable for $2.5 million ($1.9 million compensatory and $600,000 punitive) for negligent hiring and retention of a delivery man who attacked a woman customer in her home.
- Deerings West Nursing Center v. Scott. The nursing home was found liable for $235,000 for the negligent hiring of an unlicensed nurse with numerous prior criminal convictions who assaulted an 80-year old visitor.
- Doe v. MCLO. MCLO is an organization that cares for children. An employee with a criminal record sexually abused a child; his employer was found liable for $1.75 million for negligent hiring and retention.
- Stephens v. A-Able Rents Company. The defendant's delivery driver was addicted to crack cocaine. While making a delivery, the driver entered plaintiff's residence, beat, and attempted to rape her, resulting in permanent physical and psychological injuries. A-Able Rents failed to do a reference check. The jury awarded $3,350.000.
Negligent hiring: Don’t let it happen to you
Negligent hiring litigation is expensive—it is estimated that average settlement of a negligent hiring lawsuit is nearly $1 million. And employers lose 79 percent of all negligent hiring suits. Why?
"For some reason, the public at large – which constitutes your juries – believes that employers are performing competent and effective background checks to screen out employees, whether or not that's actually true." Jodka explained. In other words, there is an expectation that this will be done and is being done.
On top of that, certain jobs or industries require heightened obligation, such as:
- Working in close contact with children, supervision of children, or with the elderly.
- Any situation that requires access to personal residences or personal property.
- Roles which include responsibility of providing safety for others.
- Anything involving driving and transportation.
- Many roles within the financial and insurance industries.
Employers should take the duty to provide a safe working environment seriously, especially if they fall into one of the above categories.
The above information is excerpted from the webinar "Conducting Legally Sound Background Checks: FCRA Requirements, EEOC Guidance, and Other Recent Developments." To register for a future webinar, visit CER webinars.
Attorney Sara Hutchins Jodka of Porter Wright has significant experience representing employers in all facets of employment-related litigation. Ms. Jodka has drafted company handbooks, workplace policies, and more.