Negligent Hiring/Negligent Retention

Compliance Matters

Definition of “Negligence”

The failure to use reasonable care

Failure to use a reasonable amount of care when such failure results in injury or damage to another

Failure to exercise the degree of care considered reasonable under the circumstances, resulting in an unintended injury to another party

What is Negligent Hiring?

The potential liability of an employer for the actions of an employee who was selected for employment without adequately determining the person’s qualifications for the job.

What is Negligent Retention?

The prospective liability an employer faces by retaining employees who it knows (or should know) are not qualified to perform their job task or have mental or physical conditions or propensities that result in them being hazards to themselves or others.

Good Interview Techniques

Effective job applications Good interview techniques Background and reference checks Drug testing Consistent enforcement of employment

policies

What would I find if I ran a background check relative to the use of illegal drugs?

Have you ever been fired or asked to resign from a job?

Do you work well under pressure?

Interviewers can ask these questions

Interviewers can ask these questions

How well do you get along with your current or former supervisor/co-workers?

How do you think your current or former supervisor will respond to my request for a reference?

What are your strengths/weaknesses?

Who’s background should you check?

All employees can do damage

30% to 40% lie on applications/resumes

42% of education credential checks revealed “discrepancies”

Average cost of a negligent hiring settlement: $1.6 million

Basic rules

Make it a pre-employment check Always get a consent form signed by the

applicant prior to conducting the background check and/or drug screen

Check references by talking to former employers

If obtaining a credit report, make sure consent is also received from applicant

Do not obtain medical records (except for ADA accommodations)

Improving information accuracy

Advise applicant that accurate information is essential

Make sure that your company has a disclosure statement that is signed by all applicants

Advise applicant that all information provided will be verified.

– Previous employment

– Previous education (when necessary)

– Background check and drug screen

Meet Dave Edmondson

Former Radio Shack CEO Lied about college DWI charges Resigned; asked for $1.5MM severance

Meet Meredith Turner

Hired by a Staffing Company Attacked supervisor Staffing Company could be liable;

complete hiring check was not deemed “thorough”

Meet Marilee Jones

Dean of Admissions, MIT Claimed degrees from 3 colleges Actually attended one school part time for

one year

Integrity

Holding integrity is sometimes very hard to do because the temptation may be to cheat

or cut corners. But just remember that “what goes around comes around,”

meaning that life has a funny way of giving back what you put out.

Avoiding negligent hiring and negligent retention

How can employers avoid negligent hiring and negligent retention claims?

– By understanding their elements and executing a preventative maintenance plan on a consistent basis.

The Case of Mary Foley

Owner of a small temporary staffing company

Mary’s downfall

– Hired a retired military man as a night watchman at a warehouse.

Was he a retired military man?

Is Mary liable?

Criteria for demonstrating negligent hiring

1. The existence of an employment relationship

2. The employee’s incompetence

3. The employer’s actual or constructive knowledge of such incompetence

4. The employee’s act or omission causing the plaintiff's injuries

5. The employer’s negligence in hiring or retaining the employee as the proximate cause of plaintiff’s injuries

Employment relationship and employee’s incompetence

Mary’s firm hired the employee, tells the employee where he/she must work, pays the employee, therefore Mary is considered his/her employer.

In Mary’s case, the plaintiff will have little difficulty demonstrating to the court that the employee’s past record and untruthful job application made him a risk for the position in which he was placed.

Employer’s knowledge of employee’s incompetence

Mary escapes liability on this issue, did not know of the felon’s previous criminal record.

Had Mary known and assigned anyway without warning client, criteria would have been met.

This however, does not get Mary off the hook.

The plaintiff will argue that had Mary properly screened this employee, she would have known.

Employee’s acts as proximate cause of the injury

Assessing whether or not an employee is the cause of an injury and whether the employer’s negligent hiring or retention of the unfit employee proximately caused the injury are essentially issues for a jury to determine.

Effective screening process

Where did Mary go wrong?

How much screening is enough to avoid liability?

The greater the risk, the more effort must be made to investigate a potential employee’s background

Conclusion

State and local laws vary with regard to the standard of care necessary to prevent legal problems due to negligence in hiring and retention

Consulting a labor attorney is always in your best interest. With proper legal advice, negligent hiring and retention problems can be avoided

THE COST OF PREVENTION IS AFFORDABLE – THE COST OF NEGLECT MAY NOT BE