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Employerliabilityforhiring.pdf

from clients or commit violent acts that result in property damage, injury, or death.

Although it is in everyone’s best interest to keep workplaces free of unfit employees for both fiscal and ethical reasons, there are legal reasons as well. A firm may be held liable if the injured third party can demonstrate a connection between the injury and the firm’s negligence in its hiring and employment prac- tices; firms are legally required to exercise reasonable care when hiring, training, super- vising, and retaining employees. Employer negligence in these areas constitutes a viola- tion of tort law, potentially costing employers millions of dollars.

Although the courts’ interpretations of negligence vary by state, there are some com- monalities. The courts have consistently held employers liable for negligence when charg- ing parties can prove that the following three conditions exist:

1. The actions of an unfit worker caused them to sustain a harmful injury.

2. The employer hired or retained the worker despite the fact that it knew or should have known that the worker was unfit.

3. The employer’s negligence was a proxi- mate cause of the injury. That is, the injury sustained by a third party was a foreseeable outcome of the employer’s

Carlos Gomez, a Wells Fargo Bank employee, was arrested at gunpoint in his home in front of his wife and two daughters, charged with fraud and money laundering. He spent two weeks in a federal prison and then nearly eight months on house arrest before clearing his name of all charges. How did this happen? It turns out that Gomez’s coworker at the bank, Noel Mendez, alleg- edly framed him by opening a new bank account under Gomez’s name, using his confidential information without his con- sent and laundering over $100,000 of stolen money through this account. In court, Gomez blamed the bank for allowing this to happen, claiming that had Wells Fargo properly super- vised its employees, it would have quickly discovered what Mendez was up to and would have fired him, thus sparing Gomez from suffering such harm.1

As illustrated by this case, employers may put others at risk when they hire and/or retain unfit workers. Such workers are likely to harm others because they perform their jobs in an unsafe manner or engage in dys- functional behaviors, such as theft, harass- ment, bullying, physical violence, and the like. These behaviors often undermine orga- nizational productivity and damage employee morale. They can also endanger the general public, as such employees may steal funds

Employer Liability for Hiring and Retaining Unfit Workers: How Employers Can Minimize Their Risks

Lawrence S. Kleiman and Darrin Kass

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Robertson because it neglected to conduct a background check that would have revealed his sexually violent tendencies. On discover- ing these tendencies, the firm surely would have rejected Robertson, thus sparing Keen from experiencing such a traumatic event.

Screen Job Applications

To avoid liability, firms should begin the selection process by carefully screening can- didates’ completed applications. Prior to mak- ing any preemployment inquiries, employers should check state law to identify questions that the state deems unlawful. Where lawful, the application form should include ques- tions asking applicants to state why they left their previous jobs and whether they have a conviction record. Answers to these questions could cast doubt on an applicant’s fitness. For instance, being fired from a previous job for fighting with another employee or serving time in jail for assault and battery may indi- cate that the applicant has violent tendencies.

Applicants with “checkered pasts,” how- ever, may avoid truthfully answering these questions fearing that honest answers would disqualify them from job consideration. Firms should thus do a little detective work when screening applications by searching for vari- ous clues or “red flags” that may indicate pos- sible past dysfunctional behaviors. One red flag is unexplained time gaps in employment, which are extended periods of time that are unaccounted for on applicants’ resumes; they neither held a job nor attended school dur- ing those periods. Unexplained time gaps are red flags because they may be indicative of a number of undesirable qualities possessed by an applicant. For example, time gaps could indicate that applicants are hiding something that might diminish their chances of being

negligence in the way it hired, trained, supervised, or retained the worker.

This article offers suggestions on what employers can do to minimize the risk of engaging in negligent employment practices during prehiring process and posthiring.

EXERCISE REASONABLE CARE IN HIRING: START WITH BACKGROUND CHECKS

Deborah Keen, employed by the Miller Environmental Group, became ill while performing her job. A coworker, Rundy Robertson, offered to drive her home after work. On arrival at her home, Keen alleged that Robertson forcibly raped her. Keen sued her employer for negligent hiring when confronted with the fact that Robertson was

hired despite a lengthy criminal history that included charges of sexual battery and forc- ible rape; he was a registered sex offender. At the time of hire, Robertson claimed he had no criminal history and signed a consent form allowing the firm to conduct a back- ground check. However, no such check was performed.2

Employers may be liable for negligent hir- ing if they knew of an applicant’s incompe- tence or unfitness at the time of hire or could have discovered such problems by exercising reasonable care during the hiring process. In the case of Keen v. Miller Environmental Group, Keen argued in court that the firm failed to exercise reasonable care when hiring

Employers may be liable for negligent hiring if they knew of an applicant’s incompetence or unfitness at the time of hire or could have dis- covered such problems by exercising reasonable care during the hiring process.

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Incidents of past dysfunctional behavior can also be revealed from reference checks. As noted earlier, the information gleaned from applicants may be tainted by applicants’ attempts to hide the truth. Consequently, partial truths, exaggerations, and withheld information are common occurrences during employment interviews.4 For example, few applicants would admit that they are seeking employment because they were fired from their previous position or were just released from prison. Seeking information from some- one other than the applicant (e.g., references who are familiar with the applicants’ work histories) introduces a note of reality into the

process. When checking references, employ- ers should inquire about the applicant’s rea- son for leaving (if no longer employed there) and whether the applicant ever posed any disciplinary problems.

Caveats about the Use of Background Checks and Criminal Records

Conducting background investigations repre- sents an additional step that employers can take to ensure they have exercised reasonable care during the selection process. As noted earlier regarding Keen v. Miller Environmental Group, the employer’s hiring practices were questioned because the firm did not conduct a background check. This argument is com- monly used by victims’ attorneys. If someone is harmed at the workplace by an employee, the first thing the victim’s lawyer will do is to get information on the alleged perpetrator.

hired. Some applicants may hide the fact that they served time in prison. Fearing that most employers would be reluctant to hire an ex- con, these applicants omit this information from their resumes, thus leaving a time gap. Other applicants may hide the fact that they were actually employed during the time gap, but left the job under unfavorable circum- stances, such as being fired for stealing or for engaging in violent behavior, like bullying or sexual harassment. Such applicants omit such jobs from their resumes because they do not want prospective employers to contact refer- ences there, fearing the reference giver would reveal these violent behaviors.

Another red flag is “job hopping” (i.e., frequently changing jobs). Job hopping is a red flag because it may indicate any of a number of undesirable qualities. It could be a sign that a candidate was fired from past jobs because of poor performance or miscon- duct. Moreover, people may hop from job to job because they have difficulty getting along with their superiors or peers, which may indicate that they have trouble dealing with authority figures or socially interacting with people.3

Ask the Right Questions during the Selection Interview

The selection interview provides an addi- tional opportunity to uncover applicants’ dys- functional tendencies by following up on red flags that may have been identified earlier. For example, interviewers could ask appli- cants to explain why they have changed jobs so frequently or why there is an unexplained time gap on their resumes. Moreover, inter- viewers can inquire about the nature and severity of any convictions that a candidate listed on the application form.

When checking references, employers should inquire about the applicant’s reason for leaving (if no longer employed there) and whether the applicant ever posed any disciplinary problems.

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❏ Jobs aff ording access to the homes and personal possessions of others.

❏ Jobs in which the employee has access to drugs.

❏ Jobs in which the employee is given unsu- pervised access to property.

❏ Jobs involving public safety and transpor- tation.

What should a firm do on discovering that an applicant has a criminal record? Such applicants should not be automatically barred from employment. Policies that exclude appli- cants with criminal records can dispropor- tionately impact the selection rates of various protected groups.7 The criminal conviction rate in the United States is 6.6 percent of its population. The rate rises to 32 percent

for black males and 17 percent for Hispanic males. These high rates signal the potential for disparate impact claims if employers use conviction records to bar applicants.8 However, conviction records should not be ignored. Employers are obligated to provide a safe working environment and run the risk of a negligent hiring suit if hiring someone with a conviction record who is likely to engage in incidents of violence, harassment, or theft.

There is no easy solution to this conun- drum. The Equal Employment Opportunity Commission (EEOC) takes the position that it is illegal for a firm to reject applicants because of past convictions unless doing so is a business necessity. To determine business necessity, firms must consider three factors9:

If that individual has a criminal record, the lawyer will argue that had the employer con- ducted a background investigation, it would have discovered that this person has a his- tory of engaging in dysfunctional behaviors. The lawyer would then argue that had the employer properly done its job, it would not have hired this person and the victim would have been spared from harm.5

Despite the fact that conducting back- ground checks helps ensure that firms meet the reasonable care standard, such action is not legally required in all situations. As noted by the judge in Keen v. Miller Environmental Group, the legal need to conduct a back- ground investigation depends on the nature of the job being filled:

Here, it is undisputed that Aerotek hired Rob- inson to work on the Miller contract to remove tar balls from the Gulf Coast. Nothing about the nature of that work could have suggested to Aero- tek or Miller that Robinson was likely to subject Keen to the risk of assault. … If a criminal back- ground check were necessary to screen for indicia that a manual laborer might assault a coworker, it is difficult to envision a fact pattern in which a background check would not be necessary.6

The employer’s obligation to conduct back- ground checks is heaviest for jobs that are classified as “special duty of care,” such as the following:

❏ Personal-care jobs involving contact with children, older persons, mentally ill, and other vulnerable types of people.

❏ Jobs involving medical treatment. ❏ Jobs in which the work is relatively unsu-

pervised. ❏ Jobs providing security involving the use

of fi rearms.

Employers are obligated to provide a safe work- ing environment and run the risk of a negligent hiring suit if hiring someone with a conviction record who is likely to engage in incidents of violence, harassment, or theft.

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Contracting, which is the staffing agency that provided the employer with the services of Cabal- lero. In court, Ates argued that B&D was negli- gent because it breached its duty to provide the employer with a trained and qualified employee and that Caballero’s lack of proper training was the direct cause of the accident.10

B&D won the suit because the negligence was not its fault but, rather, was the fault of the employer. VT Halter had contracted B&D to furnish them with an unskilled worker. Testimony revealed that an “unskilled

worker” is defined as someone without train- ing or skills, who must simply be physi- cally able to do the work. Caballero, while untrained, was qualified because he was physically able to do the work. VT Halter was clearly mistaken when it specified the need for an unskilled worker; the type of work that Caballero was contracted to per- form obviously requires a certain skill set (e.g., ability to safely clean weld seams). As a result of VT Halter’s mistake, two people died, and one became seriously injured.

What lesson does this case provide? Before assigning a new hire to perform potentially dangerous work, firms should conduct a job analysis in order to develop a clear under- standing of the nature of the job and the knowledge, skills, and abilities (KSAs) needed to perform the job safely.11 Firms must then develop a training program that enables workers to acquire those KSAs. These actions

❏ The nature and gravity of the off ense. ❏ How old the conviction is. ❏ How the job relates to the type of crime

committed.

Firms should examine these three factors concurrently. If a crime is serious, recent, and relates to the job, a firm should reject the applicant. For instance, it should reject an applicant for an accountant’s position if that person was recently convicted of embezzle- ment. However, if the embezzlement convic- tion were 30 years old, the rejection of the applicant may not be legally justifiable.

EXERCISE REASONABLE CARE AFTER HIRING: START WITH TRAINING

The screening of unfit workers is a neces- sary first step to limiting a firm’s liability for negligence, but a strong possibility exists that not every unfit employee can be identified through even the most rigorous selection pro- cesses. Once hired, firms are legally respon- sible for ensuring that new hires perform their jobs safely so that third parties are not harmed. This legal responsibility can be met, in part, by providing new employees with effective training programs. Consider the fol- lowing case:

Alex Caballero and Bram Ates, contractors for VT Halter Marine, Inc., worked aboard a towing vessel as painters. Mr. Caballero was cleaning weld seams on the vessel’s hull with a combus- tible chemical solvent when the solvent ignited, causing an explosion and fire. Allegedly, Cabal- lero caused the explosion by failing to properly ventilate the area. Both Caballero and a fellow worker were killed. Ates suffered severe burns, which necessitated extensive skin grafting. Ates filed a negligent training suit against the B&D

Before assigning a new hire to perform poten- tially dangerous work, firms should conduct a job analysis in order to develop a clear under- standing of the nature of the job and the knowl- edge, skills, and abilities (KSAs) needed to per- form the job safely.

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ten mandatory sessions. KW’s claim of negligent training was buttressed by Engle’s testimony that she had never before used the shoulder belt to secure KW’s wheelchair because she did not know it was required.12

The court ruled that the employer was guilty of negligent training because it should have known that Engle had not attended all the training sessions and therefore should have known that she was unfit to perform that aspect of the job. The lesson? Closely monitor attendance for training sessions that address safety issues. Require that anyone who misses the training to attend a make-up session or be removed from the job.

Ensure Effective Job Supervision

In addition to providing the needed train- ing, employers also must exercise reasonable care when supervising employees. Effective supervision entails monitoring employee per- formance and behavior and taking the appro- priate disciplinary action when indicated. Consider the following case:

Kathleen McLaren, a passenger on a Celebrity Cruise, was returning from a snorkeling excursion operated by Explora, a firm promoted by Celeb- rity. As she was disembarking the snorkeling boat to the dock, the boat was bobbing up and down in the water. An Explora employee instructed her to step forward onto the dock with her left foot while her right leg was still on the boat. As she was told to bring her right leg onto the dock, the boat dropped down in the water, she missed the dock with her right leg, fell between the boat and the dock, and suffered severe injuries. McLaren sued the cruise line for negligent retention, claim- ing that it should have known that Explora was unfit to serve as a snorkeling tour operator.13

can help prevent the occurrence of harmful acts caused by worker incompetence and, hence, help employers avoid negligent-reten- tion suits.

Develop a Formal Training Program

To minimize the risk of negligent-training claims, firms must ensure that the train- ing program is properly developed and sets training objectives that clearly indicate what employees should be able to do as the result of training. The training program should be conducted in a way that gains and maintains employees’ attention and provides employees with opportunities to practice the skills with guided feedback. Finally, firms should evalu- ate the program’s effectiveness by gauging employee reactions, administering posttrain- ing tests, and by monitoring posttraining job performance to ensure that the newly learned skills are being properly applied.

The mere existence of an effective training program cannot prevent instances of neg- ligent-training claims if the unfit employee who caused someone harm has not actually attended the program. The following case illustrates this point:

“KW,” the plaintiff’s young daughter had been in a wheelchair all her life. Devora Engle, KW’s school bus driver, failed to strap her into the bus’s lap shoulder belt. When Engle slammed on the breaks to avoid an accident, KW fell, hitting her head against the wheelchair causing injury to her face. KW’s lawyer argued in court that Engel was unfit with regard to wheelchair transporta- tion and that the employer should have known of her unfitness. The plaintiff based this claim on the fact that Engel did not receive training on wheelchair transportation. Although the employer provided such training, Engle attended only five of

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there is a public awareness that an employee is engaging in dysfunctional behaviors. Con- sider the following case:

Alfonso Gonzalez claimed that he had been verbally abused, harassed, and discriminated at his place of employment. Although the company claimed that it was unaware of the behavior, the verbal abuse took place in a public forum and was witnessed by other employees. Because many others were aware of the bullying tactics directed at Gonzales, the court ruled that the company should have known of this behavior. It therefore ruled that the employer was negligent in that it had constructive knowledge of the bullying tactics, yet took no remedial action.15

The lesson to be learned from these cases? Claiming a lack of awareness is not always a viable defense; the employer has a legal responsibility to monitor and supervise employee job performance and behavior. Firms should follow up on all complaints and investigate “hearsay” information to deter- mine its veracity. Day-to-day observation of employees is also critical, as is the imple- mentation of a formal performance-appraisal system.

ADDRESSING PERFORMANCE DEFICIENCIES AND DYSFUNCTIONAL BEHAVIOR

Most employers are well aware of the importance of having effective policies in place to prevent workplace violence, sexual harassment, bullying, and other behaviors that should not be tolerated in the work- place. These policies should clearly state the behaviors that are expressly forbidden (violence, drinking on the job, taking drugs) and the consequences for engaging in them. Employers should communicate these policies

The cruise line claimed it had no prior knowledge that Explora was unfit to safely transport passengers. However, the court dis- agreed, stating that Celebrity had been using the services of Explora for some time and should have known of its negligence. This case illustrates the concept of “constructive knowledge,” and Explora’s length of employ- ment with Celebrity Cruises was enough to support McLaren’s claim against Celeb- rity. Had Celebrity properly supervised and monitored Explora’s operation, it would have learned that it was deficient, as the deficien- cies were outwardly apparent and could be easily detected.

Employers may also be held accountable for having constructive knowledge when they ignore past complaints made against a par-

ticular employee for inappropriate or deviant behavior. Consider the following case:

The plaintiff, Brittany Mae Keene, sued the County Commission for negligent supervision and retention, claiming that the county sheriff had engaged in unwanted sexual intercourse and sexu- ally deviant behavior with her, and that similar events had occurred with several other females. Although the county claimed it was not aware of this behavior, the court concluded that it should have known because there had been a history of complaints. Because the county took no steps to remove the sheriff from office, the court found the county guilty of negligent supervision.14

Employers may also be held accountable for having constructive knowledge when

Employers may also be held accountable for having constructive knowledge when they ignore past complaints made against a particular employee for inappropriate or deviant behavior.

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enforced. In some instances, employers should consider the efficacy of allowing an employee to use the services of an employee assistance program (EAP). EAPs employ mental health professionals to provide ser- vices to workers who are experiencing the types of problems that we have been discussing. The potential payoff of EAPs is evidenced by a study that found that every dollar spent on an EAP returned an esti- mated $3 to $5 in lower absenteeism and greater productivity.16

As highlighted by the sample of cases reviewed above, employers are sued for neg- ligence generally for one of two reasons: (1) they fail to take appropriate actions when learning that an applicant or employee has a history of deficient performance or unfit behavior, or (2) they are negligently unaware that the employee in question was unfit because they failed to appropriately moni- tor performance and behavior. To minimize the likelihood of negligence suits, employers should exercise reasonable care in the selec- tion, training, and supervision of employees and take appropriate disciplinary actions when necessary. Beyond a legal obligation, firms also have an ethical obligation to prevent negligent hiring and retention and protect their employ- ees, customers, and the general public from harm or injury caused by their workers.

NOTES

1. Gomez v. Wells Fargo Bank, 2014 U.S. Dist. LEXIS2871. 2. Keen v. Miller Environmental Group, 702 F.3d 239, 2012

U.S. App. LEXIS 25218. 3. Kleiman, L. S. (2012). Employee selection: A procedural

and legal guide. Dubuque, IA: Kendall Hunt. 4. McConnell, C. R. (2007). Exchanging honest employment

references: Tiptoeing between defamation and negligent hiring. Health Care Manager, 26(4), 363–372.

to employees in posted notices, the employee handbook, and during orientation training. When transgressions occur, employers should document the behavior, listing times, places, witnesses, and other details and gather records of how other similar transgressions have been handled.

Many employers use progressive discipline systems to deal with employee transgres- sions, giving misbehaving employees warn- ings and suspensions prior to firing them. Such systems give workers the opportunity to correct their behavior, which makes sense given the amount of time, effort, and money that employers spend on hiring and training them. However, employers should specify

exceptions to their progressive discipline system by immediately discharging workers who commit transgressions that put others in harm or danger. Doing so would limit a firm’s liability for negligent retention. For example, say a worker threatens to stab a coworker with a knife; that person should be fired immediately. By merely giving a warn- ing, the firm would be exposed to liability should that worker later stab someone. The victim could claim in court that the employer was aware of the worker’s violent tendencies and yet did not take adequate steps to pre- vent future violent behaviors.

Prior to making a discharge decision, employers must consider equity issues to ensure that the employee in question is being treated fairly and that the employers’ disciplinary policies are being consistently

When transgressions occur, employers should document the behavior, listing times, places, witnesses, and other details and gather records of how other similar transgressions have been handled.

41Employer Liability for Hiring and Retaining Unfit Workers: How Employers Can Minimize Their Risks Employment Relations Today DOI 10.1002/ert

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10. Ates v. B&D Contracting, 487 Fed. Appx. 201; 2012 U.S. App. LEXIS 18573.

11. Kleiman, L. S. (2013). Human resource management: A managerial tool for competitive advantage (6th ed.). Dubuque, IA: Kendall Hunt.

12. Pleas v. First Student, Inc., 2012 U.S. Dist. LEXIS 54737. 13. McLaren v. Celebrity Cruises, 2012 U.S. Dist. LEXIS 68321. 14. Keene v. Hawkins and Barbour County Commission, 2013

U.S. Dist. LEXIS 176011. 15. Gonzalez v. Hostetler Trucking, 2013 U.S. Dist. LEXIS 130525. 16. See Kleiman, note 11.

5. Swanton, M. (2010, April). EEOC focus on criminal background checks raises negligent hiring concerns. Inside Counsel, pp. 1–3.

6. Keen v. Miller Environmental Group, 6. 7. Ibid. 8. Hansen, F. (2009). Caution amid the credit crunch.

Workforce Management, 88(2), 35–59. 9. Deschenaux, J. (2010). Use criminal background checks

cautiously, expert advises. Retrieved from http://www .shrm.org/LegalIssues/StateandLocalResources/Pages /CriminalBackgroundChecks.aspx

Lawrence S. Kleiman, PhD, is currently a professor of management at Bloomsburg University. He has published dozens of articles in a variety of human resource manage- ment journals and has written two human resource management books. He has also consulted for numerous organizations. He can be reached at [email protected]. Darrin Kass, PhD, is a professor of management at Bloomsburg University. His research interests include leadership development, experiential learning, and legal issues in human resource management. He can be reached at [email protected].

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