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  • 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.

    Negligent Hiring

    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.

    Does Outsourcing HR Functions Mean You Lose Control of Your Business?

    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:

    1. Does the employer owe a duty of care?
    2. 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.

    Foreseeability

    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 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 Creative Commons Attribution 2.0 Generic license.

  • An employee causing an incident can be bad news for a business, especially if that employee ends up hurting someone else. Negligent hiring is a case where an employee injures a co-worker or customer while on the job, leaving you and your company in a difficult position.

    Avoiding negligible hiring cases.

    What Counts as Negligent Hiring

    Employers are expected to take reasonable care with their employees. The level of required care depends on the job itself and how much the hired individual may come into contact with third parties. Another factor is foreseeability, or whether the employer should have been able to foresee if the potential employee is a threat to engage in dangerous conduct. The necessary legal elements of negligent hiring or retention 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

    If all of the above factors are present, it can lead to a guilty verdict for employers. Companies lose roughly 75 percent of negligent hearing cases, costing them upwards of millions of dollars in settlements. 

    Keeping Compliant and Avoiding Negligent Hiring

    When you add an employee to your team, you need to ensure that they’re the right individual for the job. That includes making sure that you are running criminal background checks to avoid hiring the wrong person.

    Group Management Systems can help your company perform necessary background checks through risk management strategies designed to strengthen your business. Contact us today to see how working with a Professional Employer Organization can benefit you and your business.