If your employee injures a co-worker or customer while on the job, your company might be on the line.
Employers can face negligent hiring charges if a hiring decision results in an employee injuring or harming any person they come in contact with through the job. Not only can negligent hiring result in exorbitant financial costs, but it can also damage the organization’s reputation.
According to Clint Robison, a partner at Hinshaw & Culbertson, employers lose negligent hiring cases 75% of the time, and the average settlement of such claims is $1 million.
There are many elements needed to form the basis of a legal action for negligent hiring or retention. They include:
- Existence of an employment relationship.
- Employee's incompetence.
- Employer's actual or constructive knowledge of such incompetence.
- Employee's act or omission causing plaintiff's injuries.
- Employer's negligence in hiring or retaining the employee as the proximate cause of plaintiff's injury.
Duty of Care and Foreseeability
The key standards assessed by the courts in a negligent hiring claim are duty of care and foreseeability.
Duty of Care
For the employer, there is "the requirement to act toward employees and the public with reasonable watchfulness, attention, caution, and prudence as dictated by the circumstances. If an employer’s actions do not meet this standard of care, then the acts could be considered negligent, and any damages resulting may be claimed in a lawsuit for negligence".
The courts commonly assess two things when determining an employer’s duty of care:
- Does the employer owe a duty of care?
- How much care does the employer owe?
Employers are expected to take reasonable care .The level of care depends on the nature of the job and the severity of the risk to third parties.
An act is reasonably foreseeable if the employer knew or should have known that the employee had a propensity to engage in similar criminal, wrongful, or dangerous conduct.
Negligent Hiring Cases: Employer Found Guilty
There are vast amounts of negligent hiring cases in which the employer was found guilty.
- A furniture company was found liable for $2.5 million for negligent hiring and retention of a deliveryman who attacked a female customer in her home. (Tallahassee Furniture Co., Inc. v. Harrison)
- A 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. (Deerings West Nursing Center v. Scott)
- An employee with a criminal record sexually abused a child and his employer was found liable for $1.75 million for negligent hiring and retention. (Doe v. MCLO)
- A vacuum cleaner manufacturer was found liable for $45,000 because one of its distributors hired a door-to-door salesperson with a criminal record who raped a female customer in her home. (McLean v. Kirby Co.)
Compliance with the EEOC
Employers should demonstrate due diligence and the duty of care by performing background checks on potential employees. Criminal background checks can be used as tools for employers to determine foreseeability with regard to employment decisions.
However, the (EEOC) requires that background checks must be performed equitably and in a manner that does not result in discriminatory practices. Employers cannot automatically exclude someone with a criminal record, for example.
To keep background check usage fair and legal, the following practices should be observed:
- Background checks of candidates for the same job should be performed identically for each candidate.
- A clear connection must exist between the background check conducted and the requirements of the job.
- Employers must consider relevant details about past negative behavior, including the nature and gravity of offenses.
Is Your Company at Risk?
Employers are most vulnerable to negligent hiring claims if they fail to:
- Do a criminal background check on potential employees.
- Check employment and references.
- Check employment history and attempt to speak with former supervisors.
- Validate college degrees.
- Perform drug screening in particular industries.
- Require physicals for some occupations.
- Perform credit checks for some occupations.
- Check driving records and history for some occupations.
At GMS, we perform background checks; employment and education verification; credit checks; motor vehicle records; drug screening; and adverse action notifications compliant with the Federal Credit Reporting Act (FCRA). We can help protect your company. Find out more about our HR services.
Would your company be ready if faced with a negligent hiring action? What are your thoughts about duty of care and foreseeability?
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