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Human Capital Risk Series: The Employer’s Role in Negligent Hiring and Retention

byLowers & Associates | November 10, 2016
negligent hiring and retention

 

Demonstrated due diligence is your first line of defense against negligent hiring and retention lawsuits. Sometimes this is easier said than done, especially if you are trying to fill positions for which there is a lack of talent.

Be aware that dialing down the due diligence in making a hiring decision can backfire with exorbitant cost. In one case, a jury awarded $7 million to the family of a truck driver who was killed in an accident caused by a second truck driver. The second driver, who was hired without a background check, had been on the job only 19 days when the accident happened. The plaintiff was able to show that a background check would have revealed that the second driver had had his license revoked twice for driving infractions.

In another more recent case, a hospital in Denver was sued for negligent hiring in a class action suit because it had hired a surgical technician with a record of having been fired from four previous positions, and who also had a Navy court martial for the theft of the powerful synthetic opioid, fentanyl. After being caught again stealing a syringe of fentanyl, the defendant tested positive for a blood-borne disease, making him an infection risk to the 2,900 surgical patients the hospital had during his tenure. Plaintiffs counsel argued that the terminations and court martial were easily discovered with a background check. All 2,900 patients are part of the class action lawsuit.

Duty of Care in Hiring and Retaining Employees

Let’s go back to the legal concept of “negligence.”

According to one definition, you are legally negligent if you fail to act like a reasonable person would in preventing harm to others. You have a duty of care. A reasonable person knows, or ought to know, pertinent facts about the situation at hand. In hiring, this includes knowing the characteristics of the employee that are relevant to the job in question.

The best way to learn about an applicant is to do the background research needed to address the potential human capital risks associated with the job. These risks vary from job to job, so the type of background checks you do are necessarily job-related. A well-designed background screening process will yield the information you need to mitigate risks associated with the duties of the job in question.

On a closely related issue, one commentator has claimed, with respect to Ban the Box laws, that hiring anyone with a criminal background inevitably exposes the employer to a charge of negligence if anything goes wrong. This claim exaggerates the risk of negligence in these cases for two reasons.

First, the employer is trying to mitigate multiple risks, one of which is to avoid a legal charge of discrimination if he or she uses a blanket policy to exclude all ex-offenders. Our recommended approach to reducing the risk of discrimination is to use an individualized assessment that takes all relevant job-related circumstances into account. It is important to note that the preventative defense against hiring negligence is exactly the same thing: thorough and effective background research on factors related to the job in question.

Second, the defendants in the cases described above were perfectly free to exclude the truck driver and surgical tech who caused the damages. Professional background checks would have discovered the flaws in both applicants, and these flaws were certainly job-related. Employers are not required to hire ex-offenders whose backgrounds include risky behaviors that are relevant.

The good news about negligence in hiring or retention is that employers have many tools to show they have performed due diligence in making a hire. Using the process described by the Equal Employment Opportunity Commission and the Fair Credit Reporting Act, which includes individualized assessments and a transparent method for exclusion, creates a strong foundation for a defense against a charge of negligence.

Are you taking steps to protect your organization against claims of negligent hiring and retention? Talk to a Proforma Screening Solutions expert about the status of your background screening program.

 

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Lowers & Associates

Lowers & Associates provides comprehensive enterprise risk management solutions to organizations operating in high-risk, highly-regulated environments and organizations that value risk mitigation.

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