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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. California Case Demonstrates Outer Limits to Negligent Hiring Exposure A 2009 case by the California Court of Appeals demonstrates the outer limits of liability for employers for negligent hiring. In that case, the employee met a girlfriend while on the job, and then committed murder after he had already been terminated. The issue before the court was whether an employer could be sued for negligent hiring on the basis of conduct that occurred post-termination. The case involved a plumber that was hired in 1999, even though the plumbing company knew the person had been convicted of domestic violence and/or arson involving the plumber's ex-wife. Four years later, in 2003, the plumber performs a service call at the victim's home. The plumber and the victim started a relationship that eventually turned romantic in nature. About a month after the service call with the victim, the plumber was terminated for misuse of a company vehicle, drug and alcohol use and an allegation of threatening a co-worker. By 2005, the victim apparently had enough and ended the relationship and applied for a restraining order against the plumber. The plumber shot and llilled her and was convicted of her murder. The victim's daughter brought a lawsuit for negligent hiring against the plumbing company. The case was dismissed by the trial court on a motion for summary judgment, and it was appealed. The Appeals court upheld the dismissal, for two reasons: First, the court ruled that an employer no longer has liability for negligent hiring after terminating and the end of the employer-employee relationship. As an additional grounds, the Court also ruled that the was insufficient causation between the employer hiring the plumber and the murder of the victim, so that the employer's hiring was not the proximate or legal cause of the murder. In reaching its ruling, the court reviewed California law on negligent hiring. Essentially, an employer can be held liable when it hires someone that causes harm where the employer either knew, or reasonably should have known, that the person was dangerous or unfit, and it was foreseeable that harm could occur, and the injury to victim was caused by the employer's act. In this case, the court determined that the duty of care does NOT extend to acts committed by a former employee AFTER terminating. The logic was that a reasonable person could not foresee that an ex-employee would injure a party two years after termination. The California found that: "[B]ecause the employer-employee relationship ends on termination of an employee's employment, we conclude an employer does not owe a plaintiff a duty of care in a negligent hiring and retention action for an injury or harm inflicted by a former employee on the plaintiff even though that former employee, as in this case, initially met the plaintiff while employed by the employer." As additional support for its decision, the Court also relied on a lack of causation. The court noted that there must be some "nexus or casual connection between" the employer's negligence, and the harm suffered. Without sufficient connation, there is a lack of proximate or legal cause, and there fore the employer would not be liable. The Court noted that the plumbing firm could be the guarantor of the safety of all customers or other persons whom the employee incidentally meet while performing plumbing work, especially given that the relationship began outside of the plumber's duties, and the romantic relationship did not even start until AFTER the plumber was terminated. Employers may not want to assume however, that this case announces a firm rule that essentially creates immunity from negligent hiring lawsuits every time a bad hire is terminated. As the Court noted, the existence of a legal duty of care has to be analyzed in the particular factual situation in question. A different argument could be made for example if the employer had hired someone for a position where it was foreseeable that a work related relationship would continue even after termination. This could occur where the job entailed working with vulnerable patients, for example, where there is a higher duty of care, and it is foreseeable that once the introduction is made, that ongoing relationships that are work related could be established. The above is not given as legal advice but only as an education article that may be helpful The case is, Phillips v. TLC Plumbing, Inc. (2009)172 Cal.App.4th 1133. For more information or a copy of the case, contact Jared Callahan at 415-898-0044 or by e-mail at jcallhans@ESRcheck.com 2.Privacy and Background Screening Reports Because background reports and background release forms contains sensitive and confidential information, all efforts must be made to keep the contents private and only available to decision-makers directly involved in the hiring process. Identity theft experts for example, note that the majority of identity theft problems emanate from the workplace. The Background Report itself, along with the Release and Authorization forms signed by the applicant, should be maintained separately from the employee's personnel file. They should be kept in a secured area, in the same fashion that medical files or sensitive employee matters are kept, and only shown to individual directly involved in the hiring process. For example, an employer would not want a supervisor to have access to background check related information when doing a six-month employee evaluation. For background screening firms with advanced internet systems, there is no need to physically print or electronically download the report. It is available online and can be archived indefinitely. However, an employer needs to be assured that good internet security practices are in place and being utilized such as strong password protection. It is important for example that authorized users do not share passwords with those not authorized, nor reveal the password in any manner such as keeping the password posted near the computer. Some screening firms require the user to change passwords periodically as a security measure and to engage in other security practices. Typically, background reports are returned to either Human Resources or Security Departments. Reports are reviewed for any negative information. If the report is clear, then the hiring manager is notified and the hiring can proceed. If there is a red flag or derogatory information, then the information itself is shared with the appropriate decision-makers. The physical or electronic copy of the actual background report, however, should normally stay with HR or Security. This protects against Personal and Identifiable Information (PII) accidentally or wrongfully being made known to unauthorized individuals if reports are transmitted between departments either by means of a paper copy or electronically. The question arises as to how long records and documents should be maintained after a report is completed or after the applicant, if hired, leaves the company. Unlike Canada where privacy laws encourage the destruction of confidential data when no longer needed, there are no U.S. requirements that materials related to background screening be destroyed. In fact, there are a number of state and federal laws that control document retention, and labor attorneys will typically advise employers on how long various documents must be retained. However, for purposes involving safe hiring and background screening, the recommendation by ESR is six years after the person is either not hired, or after leaving the company. The FCRA was amended in 2003 to lengthen the statue of limitations under the act up to five years. In addition, state laws often allow a one-year period to file and serve a lawsuit. As a workable general rule, a six-year retention period should serve employers - the six years run from the end of employment or, if not hired, from the time the decision was made not to hire the applicant. If disposing of any information in a consumer report, it is important to follow regulations set out by the FTC pursuant to FCRA Section 628. Paper or electronic reports must be destroyed, pulverized or erased so it cannot be read or reconstructed. An employer must also show due diligence when a shredding firm is hired. See: www.ftc.gov/bcp/conline/pubs/alerts/disposalalrt.shtm For best practices when it comes to protecting privacy in the workplace and for best practices when it comes to handling documents that contain PII, see the recommendations from the Privacy Rights Clearinghouse available at: www.privacyrights.org/ar/SDCountyIT.htm 3.Top Ten Mistaken Assumptions Made by the Higher Education (and other Employers) When It Comes to Background Checks When it comes to hiring employees, institutions of higher education bear the same risk as any other employer. Due diligence in hiring, including pre-employment background checks, has become mission critical for any organization seeking to avoid workplace violence, lawsuits for negligent hiring or the fallout from hiring employees with unsuitable criminal records or false credentials. In fact, colleges and universities may even have a higher duty of care when it comes to hiring given their special role in society. Parental, alumni, trustees, legislators and others are entrusting colleges and universities to provide a safe place of learning for young people. Although there is some controversy over whether background checks are appropriate or even cost-effective for students or faculty members, when it comes to staff members, any college or university that fails to exercise due diligence in hiring is playing Russian Roulette with not only its own reputation, but with the welfare of students, staff, faculty and the public. Below are the ten biggest mistaken assumptions that higher education HR professionals make when it comes to the area of background screening of staff members and safe hiring procedures. These mistakes may well apply to employers in other areas as well. The full explanation for eaah mistake can be read in-depth online at http://www.esrcheck.com/higher_education_background_checks-common_mistakes.php No. 1 - Assuming all screening firm are the same: That mistake would be like saying that all schools are the same and a degree form a diploma mill is as good as a degree from a school that has a legitimate accreditation. Background checks are not a commodity and not all screening firms are not all the same. No. 2 - Assuming that database searches for criminal records are adequate protection: One of the biggest fallacies to befall higher education human resources departments is the untrue premise that database searches are real criminal checks. Unless you are have access to the FBI databases through fingerprinting your applicants (which is only permitted in certain circumstances), any database being utilized is not the real thing. Even the FBI database searches can result in records being missed, since the FBI database relies in great part upon the accuracy and timeliness of reports make by state and local jurisdictions. No. 3 - Assuming that an applicant's privacy is always protected and that information is kept within the borders of the United States: Now here is something that probably has not even occurred to higher education HR professionals: many background firms ship your applicant's data outside of the U.S. for processing in order to save money. Theft of confidential data that can lead to identity theft is rampant oversees. A related issue is that some firms actually rely upon a network of home-based workers to process personal data. Employers should very carefully consider the dangers of using a screening firm that utilizes a home network of operators for domestic verifications or processing. Such a practice puts the school at risk of disclosing confidential data from the applicant. Do you want your job applicant's personal and private information spread out in living rooms, on kitchen tables, and in dorms across America? The bottom-line: Ask any vendor specifically whether they offshore personal data or use home operators. No. 4 - Assuming that you need to have applicants sign a physical piece of paper: There is a green solution to the significant logistical challenges faced by institutions of higher learning that are hiring across numerous departments of large campuses, or even across multiple campuses. With the new technology available right now, background screening can be a completely paperless system. For example, if a school uses an Applicant Tracking System (ATS), a button can be added that says "Perform Background Check." Releases can be handled online as well with a legally valid E-Sign electronic signature, so that no paperwork is involved whatsoever. No. 5 - Assuming that any temporary employees have already been screened by the staffing firm: Another mistakes employers can make is to assume that a staffing firm or temporary agencies are screening applicants. When a staffing firm uses the term "screening," it can simply mean that they are trying to match up applicants with your list of needs - not that they are performing due diligence background checks. It is crucial for you to have the staffing firm clearly specify what types of checks they are doing, if any, including: who is ordering them, what searches are being conducted, who is reviewing reports, and what criteria is being used to decide who is eligible to work for you. Another best practice is to ask the staffing firm to include your school in the language of the background release so that you, the HR professional, can review the completed reports as well. No. 6 - Assuming that contacting past employers is not beneficial: Not checking those businesses or institutions where the applicant has worked for the past seven-to-ten years can be a big mistake for the HR professional. Some HR professionals assume that since past employers are reluctant to give detailed reference information that such calls provide little value. In fact, there are many instances where past employment verifications can be just as valuable as a criminal records search. No. 7 - Assuming that international background checks are too difficult: With the mobility of workers across international borders it is no longer adequate to conduct due diligence checks just in the United States. Because of the perceived difficulty in performing international employment screening, some employers have not attempted to verify international credentials or to perform foreign criminal checks. However, the mere fact that information may be more difficult to obtain from outside of the U.S. does not relieve an employer of their due diligence obligation. No 8 - Assuming that "one size fits all" for background checks: Human Resources processionals live by the rule that similarly situated people must be treated in a similar fashion. That does not mean, however, that all employees need, or must undergo the same background checks. It is perfectly acceptable to screen directors more intensely than janitors. As long as all directors are screened the same and all janitor workers are screened the same, there is a rational basis for the different level of screenings. No. 9 - Assuming that the internet and social networking sites can be used without limitation: Many employers have discovered that the internet can provide what appears to be a treasure trove of information when it comes to recruiting and hiring. By using search engines and social networking sites, recruiters are often able to source candidates for positions. In addition, there are many stories about employers using the internet to pre-screen applicants. However, there are many traps for the unwary, and such searches can get a college or university in hot water for allegations of discrimination or invasion of privacy. No. 10 - Assuming that it costs too much to do real due diligence: Although it is important to obtain competitive pricing, it is usually not advisable to choose the lowest-cost provider for a professional service. As the old saying goes, you get what you pay for. Although some firms can reduce some costs through efficiency and technology, one of the ways a screening firm cuts costs is by hiring fewer and cheaper employees. Since screening is a knowledge-based profession that is heavily regulated, key criteria for selecting a firm should be the knowledge, training, and experience of the staff member serving your account. 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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