In a competitive job market, it can be tempting to swoop up talented employees quickly, but failing to research a candidate’s background can result in what’s known as negligent hiring - and it can cost employers big. The costs of negligent hiring could come in the form of lawsuits, employee injuries or stolen money, not to mention the mark it could leave on an employer’s reputation. 

Research shows that more than half of those who apply for jobs include false information on their applications or resumes. Although some of those details may not harm the business, completing thorough research during the recruitment process is key to avoiding negligent hiring claims. Overall, states recognize negligent hiring as damaging to a business, its employees and its customers.

Negligent hiring scenario:

ABC Company hires James. James gets into an argument with another employee named Bob, which ends with James assaulting Bob. Bob is injured and files a negligent hiring claim against ABC. James’ background check reveals he was convicted of aggravated assault and serving probation during his employment at ABC. The company did not conduct a background check. Since James has a history of assault, ABC is liable for the damage done to Bob and putting other employees and clients at risk.

Under the doctrine of negligent hiring, an employer is liable for harm its employees inflict on third parties when the employer knew or should have known of the employee’s potential risk to cause harm, or if the risk would have been discovered by a reasonable investigation.

While federal courts and most states recognize a cause of action for negligent hiring, they apply different standards for deciding whether employers are liable for negligent hiring. Here are some specific examples according to the American Bar Association:

In Florida:

1. Employers are liable when they are required to make an appropriate investigation of the employee and fail to do so.
2. Employers are liable when an appropriate investigation would have revealed the unsuitability of the employee for the particular duty to be performed or for employment in general.
3. Employers are liable if it was unreasonable for the employer to hire the employee in light of the information he knew or should have known.

In California:

1. Employers are liable if they knew or should have known that hiring the employee created a particular risk or hazard and that particular harm materializes.”

In New York:

1. Employers are liable when they place an employee in a position to cause foreseeable harm, harm which the injured party most probably would have been spared had the employer taken reasonable care in supervising or retaining the employee.
2. Employers are liable when they know or should have known of the employee's propensity for the conduct that caused the injury.

Best Practices to Avoid Negligent Hiring Claims

• Conduct background checks
• Check employment references
• Enforce drug testing
• Verify education and professional licenses

Depending on the business, it might also make sense to screen medical, financial or driving records. Whichever pre-employment tests an employer decides to implement, the tests should be standard for every candidate and nondiscriminatory in nature. As a reminder, employers should not ask about criminal records on applications.

Learn more about the Ban the Box Initiative by clicking here.

The Equal Employment Opportunity Commission (EEOC) recommends that employers gauge whether candidates have the experience, education and skills to do the job before knowing things about the candidate’s past, like his or her criminal background.

At FrankCrum, our experienced team of HR Consultants help clients establish a pre-employment background check policy. As a bonus, FrankCrum provides the following pre-employment check background services to its clients:

• Employment
• Education
• Criminal Records
• Driver’s License Records
• Professional Licenses
• Credit History

Call 800-277-1620, ext. 7 for more information on pre-employment background check services at FrankCrum.