This newsletter is sent to clients of Employment Screening Resources (ESR) as well as employers, Human Resources and Security professionals, and law firms who have requested information on pre-employment screening, safe hiring, the FCRA and legal compliance. Please note that ESR's statements about any legal matters are not given or intended as legal advice but only general industry information.  For specific legal advice, employers should contact their attorney.  If this was sent in error, you can be removed from this mailing by simply using the “remove" feature at the end of the newsletter and you will not receive any future newsletters.

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April 2009            Vol. 9, No. 4

ESR Newsletter and Legal Update

1. Ohio Case on Negligent Hiring Demonstrates that a Higher Risk Requires Greater Due Diligence

2. You are in Trouble When: Your Screening Firm Uses a Home Based Operator Network

3. Time for the Yearly Check-Up: Due Diligence 22 Question Check-Up

4. ESR Speaks Spring/Summer 2009 Speaking Schedule

1. Ohio Case on Negligent Hiring Demonstrates that a Higher Risk Requires Greater Due Diligence

According to the April 7, 2009 The Chronicle-Telegram, published in Elyria, Ohio, a negligent hiring lawsuit was filed on behalf of a sleep clinic patient that was sexually molested by a staff member.  The article is at:  http://www.chroniclet.com/2009/04/07/roundup-april-7-2009/ 
According to the article, the technician is currently facing gross sexual imposition and sexual imposition charges for allegedly molesting five victims.  The lawsuit “accuses the sleep clinic of negligence for hiring (the worker) and failing to properly supervise him.” 

Although the full facts of the case have yet to be determined at this stage, it does demonstrate a fundamental fact of life for employers. In deciding how extensively to perform background screening, employers need to consider the risks involved.  Patients in a medical facility are highly vulnerable and therefore at greater risk. Presumably, patients at a sleep clinic are even more vulnerable since they are there to sleep.

Examples where employers may have an increased duty of care are: 

• The workers have contact or responsibilities with groups at risk, such as the young, infirmed, or elderly.
• Jobs such as a security guard, supervisor, or =2 0 apartment manager where this is a degree of authority and responsibility.  The classic example is the apartment manager with a serious record that has the master key to all of the apartments.
• Jobs where a worker has access to sensitive consumer information, such as credit card numbers or Social Security numbers.
• Jobs where by statute, there is particular sensitivity.  An example can be safety sensitive positions such as workers at nuclear plants.  Sarbanes-Oxley compliance is another area where that may create a higher duty of care.
• Jobs where workers enter homes, or where other unique risks exist.  A person in their own home can be extremely vulnerable since they are shielded from the public and cannot obtain help easily.  In fact, an organization called the Sue Weaver Cause advocates greater due diligence where workers enter homes.  According to their website:
  “August 27, 2001, Sue Weaver was brutally raped and beaten to death by a twice convicted sex-offender hired to do service work in her home. Sue had contracted with a major department store to have the air ducts in her home cleaned.  (The department store) did not conduct criminal background checks on those workers they sent into their clients' homes.”   For more information, see:  http://www.sueweavercause.org/

To review the risk management considerations for your screening program, contact Jared Callahan at 415-898-0044 or e-mail him at jcallahan@esrcheck.com

2. You are in Trouble When: Your Screening Firm Uses a Home Based Operator Network

This is the first of a ten part series designed to alert employers of potential danger and hidden liabilities in their background checking processes.  Each month ESR will examine a different area that can potentially put unsuspecting employers in hot water. 

Some employers have assumed that all background firms are the same, so you may as well just select the cheapest.  That is the same thing as saying you should pick a lawyer or any other provider of professional service just based upon price. The reality is that background screening is a knowledge-based0A professional service, and what your background firm does not know can cost an employer dearly in legal exposure and financial costs down the road if the employer makes a bad hiring decision.

There are ways for background firms to cut costs that leave employers vulnerable. For example, some firms use "at-home" operator networks to perform employment and education verifications.  The advantages to the screening firm are numerous.  The screening firm gets cheaper labor on-demand, without having to hire workers, provide office space or computers, or pay benefits, vacation time, or workers’ compensation.  Since the cost of labor is one of a screening firm’s biggest costs, some firms see this as a way to lower their costs and to increase profits.

Unfortunately, this practice puts the employer at risk.  Employers should very carefully consider the dangers of using a screening firm that utilizes a home-operator network for domestic verifications. Do you want your job applicant's personal and private information spread out in living rooms, kitchen tables, and dorms across America?  What about the lack of quality control and standards? In addition, there is an issue as to how at-home operators are trained and monitored for quality control. Employers are strongly advised to avoid the use of screening firms who are willing to sacrifice quality and privacy just to increase their profits at your expense.

Another area of concern is whether such home workers are properly classified.  As a general rule, an employer cannot classify someone as an independent contractor when, in fact, they are essentially an employee.  Many of the arrangements that involve home-based operator networks can raise significant issues if the home workers are improperly classified as independent contractors, while in fact they are providing a core service of the screening firm, working under the control and direction of the firm, and are not, in reality, an independent business. In addition, failure to ensure a safe working environment or to pay into a state’s workers’ compensation fund can further compound a difficult situation.

3. Time for the Yearly Check-Up: Due Diligence 22 Question Check-Up

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

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.

4. See the ESR Press Release http://www.prleap.com/pr/124407/ on our New Book, The Safe Hiring Audit (click within this headline)

May 19/22, 2009 -- Las Vegas, NV
Ten Practical and Proven Tools to Qualify and Hire the Best KennedyInfo Recruiting Conference 

June 24, 2009 -- Webinar
“The Essentials of Background Checking: An Introduction."  Presented as an educational webinar for members of the National Association of Professional Background Screeners (NAPBS)

July 1, 2009 -- New Orleans, LA
“Negligent Hiring Mock Trial"   SHRM 61st Annual National Conference and Exposition. 

July 13-15, 2009 -- Las Vegas, NV
Extreme Caution Advised: Legal and Effective Pre-employment Screening. 20th Annual Fraud Conference. 20th Annual Fraud Conference

September 21, 2009 -- Anaheim, CA
ASIS Annual Seminar "Negligent Hiring Mock Trial."

November 8-11, 2009 -- Tampa, Florida
Annual Pre-Employment Screeners Conference sponsored by the Background Investigator (I ntended for background firms and record retrievers) "The Pre-employed Screening Industry--The Good, the Bad and the Ugly." 

ESR Articles (click for more info)

The FCRA in 4 Easy Steps
Find out how to be in compliance with the FCRA

Criminal Records and Employment Applications
What questions should employers be asking?

10 Safe Hiring Tools
These tools don’t cost anything and promote a safe and profitable workplace

Negligent Hiring
What occurs when Due Diligence is not performed

Please feel free to contact Jared Callahan at ESR at 415-898-0044 or jcallahan@esrcheck.com if you have any questions or comments about the matters in this newsletter. Please note that ESR's statements about any legal matters are not given or intended as legal advice.

Employment Screening Resources (ESR)
www.ESRcheck.com
7110 Redwood Blvd., Suite C
Novato, CA 94945
415-898-0044

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