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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. (Reading time: Less than 5 minutes) ESR Newsletter and Legal Update
1. Negligent Hiring and Retention a Leading Cause of Employment Lawsuits A recent article in the Connecticut Law Tribune re-enforces what ESR has been advising employers for some time; that lawsuits for negligent hiring and negligent retention are among the most common claims against employers. Per the article, "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 concerns 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. See: Taking Aim At Workplace Disputes at http://www.ctlawtribune.com/getarticle.aspx?ID=35073 Employers have a substantial incentive to ensure that they are hiring qualified workers. One bad hire can create a legal and financial nightmare. Without conducting due diligence in hiring, an employer risks hiring someone with an unsuitable criminal record, false credentials, workplace violence, business interruption, embezzlement and a host of other issues. If an employer hires someone that they either knew or should have known, in the exercise of reasonable care, was dangerous, unfit, unqualified or dishonest, then that employer can face a lawsuit for negligent hiring if that hire caused damages or commits a crime. Negligent hiring is the opposite of due diligence. Of course, employers do not intentionally go out of their way to hire a bad employee. If an employer makes a bad hiring decision, and someone is harmed, then the jury is usually faced with the issue of whether the employer reasonably "should have known" that the applicant represented a risk. Many employers feel they are at a disadvantage when sued for negligent hiring or retention. Cases will normally have some sort of serious harm (death, assault, rape, sodomy, child molestation, theft, embezzlement, identity theft). That is because the lawyer for the plaintiff (the injured party that is suing) often is working on a contingency fee, and will normally only invest time and money in serious cases. Jurors are often employees themselves and may not feel overly sympathetic to an employer that had the ability, duty and resources to prevent harm through due diligence. As a rule of thumb, unless an employer has a compelling reason why an injury is not its fault, the employer has a tough job defending these suits. Even if the employer wins, it is at the expense of negative publicity and a great deal of time, money and effort spent involved in the litigation. (For potential employer defenses that can effective, see the next article) As every human resource professional knows, the major source of employee problems are problem employees. Efforts at minimizing the hiring of problem employees go a long ways towards creating a safe and profitable workplace. 2. Defenses That Do and Do Not Work in Negligent Hiring Cases If an employer is sued for negligent hiring on the basis that they hired someone that they either knew or in the exercise of reasonable care should have know was dangerous, unqualified, unfit or dishonest, and it was reasonably foreseeable that some of harm could occur, employers have some potential defenses in a court case, but they are far from a sure thing. The best defense is that the employer did in fact exercise due diligence and reasonable care, but despite those best efforts, a bad hire fell through the cracks. An employer would have to show that they took a number of steps designed to avoid bad hires. An employer can review the adequacy of their hiring efforts by taking the safe hiring audit offered by ESR. See: http://www.backgroundchecktraining.com/Safe-Hiring-Audit.asp Another defense that had been successful is that the crime or injury was too remote or unconnected from the employer's negligence, or was not foreseeable. An example is the California case ESR recently reviewed where a plumber with a criminal record was hired, meet a woman on the job that he started dating, was terminated by the employer and then murdered the girlfriend two years later. The victim's family's argued that but for the negligent hiring, the two would not have met in the first place and the murder would not have occurred. The court found that the murder two years later and long after termination was not sufficiently connected to the hiring to hold employer legally responsible. See: http://www.esrcheck.com/newsletter/archives/September_2009.php#T1 Another defense that a background checks would have not have revealed anything anyway so that the employer's failure to conduct an adequate pre-screening was not the cause of the injury. Some defenses that do not work? Employers have not been very successful in defending lawsuits on the basis that due diligence and background checks cost too much, especially considering how inexpensive it is to screen. Another argument that may not go far with a jury is that the employer did what every other employer did in their industry. The fact that all employers in an industry engage in the same practice does not mean that the employer has meet the legal duty of due diligence, since a "standard practice" is not the same as a "standard of care." The least successful defense is the argument that the employer is also the victim as well, or that they were victimized by an applicant lying. The bottom-line: Exercising due diligence in hiring and conducting background checks is a small price to pay to avoid the "Parade of Horribles" that can befall an employer that makes bad hiring decisions. 3. E-Verify Rule for Federal Contractors Now in Effect After a series of delays, the rules that require many federal contractors to utilize the E-Verify system to verify eligibility to work is in full force and effect as of September 9, 2009. See: http://www.dhs.gov/files/programs/gc_1185221678150.shtm#2 According to a publication from the Department of Homeland Security:"
More than 96 percent of E-Verify verification queries receive immediate employment authorization. Employees who do not receive instant authorization and choose to correct their government records to confirm their employment authorization must be allowed to continue to work during this process." For more information on the use of E-Verify for federal contractors, see: http://www.ilw.com/immigdaily/news/2009,0910-federalcontractors.pdf ESR is authorized to act as a designated agent for employers to process E-Verify requests. For more information, contact ESR customer service. ESR Articles (click for more info) The FCRA in 4 Easy Steps Criminal Records and Employment Applications 10 Safe Hiring Tools Negligent Hiring 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) |
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