6 Ways to Protect Your Business from Negligent Hiring Claims
Imagine you own a small appliance repair shop. You send your new employee John to repair a long-time customer’s dishwasher one morning. That afternoon police officers arrive at your door looking for John. He is accused of sexually assaulting your customer while in her home.
Imagine instead that you own a gym. One evening two employees stay late to close. The next day, you learn that a violent physical altercation occurred between them, leaving one employee hospitalized.
Finally, imagine you own a small accounting firm. One day you receive a letter from a lawyer accusing your prior secretary of using your clients’ social security numbers to open credit card accounts in their names and making unauthorized purchases totaling half a million dollars.
If any of these allegations are true, as the business owner and employer, can you be liable for your employees’ criminal conduct? The answer will likely depend on whether or not you properly screened the employees prior to hiring them. If John had a prior sexual assault conviction, the gym employee a record of prior assaults, or the secretary a history of theft, your troubles are just beginning.
Businesses are increasingly being held liable for the acts of their employees as a result of negligent hiring claims. These claims are based on an employer’s failure to use reasonable care in the employee selection process of instant loans uk. A business can be liable for negligent hiring if an injured third party can show that the business knew or should have known about an employee’s dangerous or untrustworthy character. The law therefore places the burden on employers to provide their employees and customers with a safe environment, free from the risk of harm by an unfit employee.
There are certain lines of business that create a heightened need for protection from negligent hiring claims. These include any service industry where employees enter homes for installation or repair purposes. Employees who have access to private homes or apartments, such as maintenance personnel and real estate agents, and those that have access to financial information, such as a bookkeeper or administrative assistant, also create an increased risk of harm to third parties. Employees who are placed in positions of trust, such as security guards, personal drivers, counselors, and health care providers, also pose a significant risk.
The level of applicant scrutiny will depend on the position being filled. However, all employers should use due diligence in their hiring processes. The following are six considerations to help protect your business from hiring an unfit employee and to demonstrate your due diligence in your employee screening process:
- Create detailed employment applications. Potential employees should be required to complete and sign an application that asks about their education, prior addresses, prior employment, why the prior employment ended, and whether the applicant has ever been convicted of a criminal offense. The application should also indicate that by signing, the applicant is affirming the information provided is true and accurate, and authorizing the potential employer to obtain background information about the applicant.
- Conduct thorough interviews. The formal interview is used to determine whether the applicant can successfully perform the job duties for the position being filled. But it can also provide a wealth of information about the potential employee and answer any questions you may have about information contained in the written application. Employers can inquire about gaps in employment history, the applicant’s current illegal drug use or addiction, whether he or she has ever been fired, and whether there are any criminal charges pending against the applicant.
- Verify educational histories. This step is most important where the applicant may be too young to have a work history, or if certain training or certification is required to properly fulfill the position’s duties.
- Check references. Many employers have a policy to disclose only a former employee’s position and dates of employment. However, some may and do reveal information that could help future employers determine whether an applicant is a good fit for a particular position. You will only know if you choose to call.
- Conduct background checks. A background check can help to verify the information contained in the application and interview, find criminal convictions, and check credit and driving records. If conducting background checks, employers must comply with the Fair Credit Reporting Act and other applicable state laws.
- Require drug testing and/or physicals. A mandatory drug test by a reputable facility can eliminate drug users from your applicant pool.
Counsel can help you develop the best hiring procedures from your business. But even if you have the most comprehensive screening process in place, it is only helpful if all efforts are documented. Keeping a file on each employee is a small task to undertake for the protection it may one day serve.
Stacy N. Lilly practices in Philadelphia where she serves small businesses and entrepreneurs, providing legal advice and representation in litigation, commercial transactions, and business planning. Her website is www.thelillylawoffice.com.