This article from Lexis Nexis contains some fantastic advice on prevention and defense of negligent hiring and negligent, retention. Below is a summary of main points of the article. We encourage you to read the article in its entirety to gain a comprehensive understanding of steps to take.
UNDER MOST STATES’ LAWS, AN EMPLOYER HAS AN obligation to use reasonable care in selecting and retaining employees. An employer violates this duty when it hires or retains an employee that it knows or should know is unfit or incompetent to perform the work required.
Avoiding Liability for Negligent Hiring or Retention
It is important to advise employers to perform reasonable investigations of their employees upon hiring to ensure that each employee’s past does not indicate a tendency that would render the employee unsuitable for his or her position. The nature and responsibilities of the position, the thoroughness of the investigation, and the extent of prior conduct indicating relevant tendencies will often determine the employer’s liability when an employee harms a third party. Employers must be mindful that certain positions will require more thorough investigations based on the level of responsibility and potential for injury. Keeping in mind the employee’s level of responsibility and potential to injure others while performing his or her duties, the employer should take reasonable precautions to investigate an applicant’s background.
In cases about negligent hiring or retention, courts evaluate the adequacy of an employer’s investigations based on several factors, such as:
The risks associated with the position
The extent of the employer’s investigative measures
You should advise an employer to be detailed and accurate in documenting its investigative practices and policies to demonstrate a record of consistently using reliable and adequate information in its hiring and retention decisions.
Prompt and consistent investigation of and discipline for employee misconduct can also help shield employers from liability for negligent hiring and retention. [R&A Comment – we wrote a previous blog post about the importance of continuous monitoring]
Elements of a Negligent Hiring Claim
Negligent hiring claims generally require the plaintiff to prove the following:
The employer did not exercise reasonable care in hiring the employee.
The employee had dangerous tendencies or was incompetent for the job in question.
The employee’s dangerous tendencies or incompetence would have been apparent to the employer had it exercised reasonable care.
As a result of the employer’s failure to exercise reasonable care, the employee or customer suffered injury.
In short, courts hold employers liable for negligent hiring if they fail to conduct a reasonable level of pre-employment screening and consequently overlook evidence of an employee’s dangerous tendencies, so you must advise employers to always conduct good pre-employment screening.
A claim of negligent retention requires essentially the same elements as a negligent hiring claim. The difference is the point at which the employer knew or should have known of an employee’s dangerous tendencies. The elements of a negligent retention claim include all of the following:
An employment relationship
Incompetence of the employee
Actual or constructive knowledge of the incompetence by the employer
An act or omission by the employee which caused the plaintiff’s injuries
Proximate causation (i.e., the employer’s negligent retention of the employee was the proximate cause of the plaintiff’s injuries)7
Negligent retention claims tend to focus on whether the employer knew or should have known that the employee was unfit for duty.
Cases Involving Individuals Who Have Frequent Contact with Minors
Additionally, once an employee is hired, it is important for an employer to promptly investigate and respond to any allegations of inappropriate conduct by an employee toward their fellow employees, customers, or clients.
Liability of Employers that Perform Background Checks
Depending on the nature of the position in question, you should advise an employer to take some or all of the following steps for conducting appropriate background investigations. As discussed below, if the employer uses a third party to conduct some or all of these types of background investigations, the Fair Credit Reporting Act (FCRA), which covers a wide range of background checks in addition to credit checks, may apply.
Criminal Conviction Record
You should advise employers that the rules for using arrest history and actual convictions to screen job applicants are different. An employer may consider an applicant’s criminal conviction record in its hiring decision provided it is job-related and consistent with business necessity. With regard to convictions, the federal Equal Employment Opportunity Commission (EEOC) emphasizes in its Enforcement Guidance on Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964 (No. 915.002, Apr. 25, 2012) that employers must consider (1) the nature of the crime, (2) the time elapsed since the conviction, and (3) the nature of the job. The EEOC’s Guidance further suggests that employers should conduct an “individualized assessment” of each applicant to determine if the policy as applied is job-related and consistent with business necessity. It states that “individualized assessment” generally means that an employer informs the individual that he or she may be excluded because of past criminal conduct; provides an opportunity to the individual to demonstrate that the exclusion does not properly apply to him or her; and considers whether the individual’s additional information shows that the policy as applied is not job-related and consistent with business necessity. The individual’s showing may include information that he or she was not correctly identified in the criminal record, or that the record is otherwise inaccurate.
In contrast, you should advise employers not to collect or use arrest history to screen job applicants. The EEOC has expressed concern regarding the potentially discriminatory impact of criminal background checks on certain minority populations. It asserts in its Guidance that it is never appropriate for employers to use arrest records to screen applicants because doing so may have a disparate impact on African Americans and other minorities.
Advise employers to review the driving records of applicants for positions that require employees to use a company vehicle or include a significant amount of driving as a job responsibility. Employers should check these applicants’ driving records before making a job offer, and then periodically throughout employment.