Negligent Hiring and Retention Causes Lawsuits

A recent article in the Connecticut Law Tribune re-enforces what ESR has been advising employers for some time; that lawsuits for negligent hiring and negligent retention are among the most common claims against employers.

Per the article, "The difference between the hiring and retention claims is when the employer became aware of a threatening employee; often, the arguments are that employers inadequately screened job applicants or failed to act on complaints about an employee who later committed a violent act."

The story concerns workplace violence and employee behavior that can be hostile, threatening or violent. This can lead to lawsuits seeking damages for emotional distress, a hostile workplace, all the way to damages stemming form violence where a person is the victim of a workplace crime. The article noted that, "In a bad economy, stress increases and people's fuses get shorter."
The article cites a study in the 1990s, where "liability expert Norman D. Bates conducted a study that found workplace violence tort cases averaged $500,000 per settlement and a $3 million per jury verdict."

According to the article: "The potential for litigation seems to be high, based on U.S. Department of Labor statistics. On average, more than 2 million acts of violence occur in the workplace every year. When it comes to assaults, women are targeted at a much higher rate than men, both in Connecticut and nationally. From 2005-07, the U.S. Department of Labor tracked 1,250 non-fatal workplace assaults in Connecticut, and women were the targets in 77 percent of those cases. On the national level during the same period, women were targeted in 63 percent of the more than 47,000 non-fatal assaults."

The article discussed that while many employers are focused on preventing workplace homicides, there are many lesser acts of hostility, such as workplace intimidation, bullying, sexual harassment and psychological abuse that can be red flags for future violence that also need to be addressed. See: Taking Aim At Workplace Disputes at http://www.ctlawtribune.com/getarticle.aspx?ID=35073

Employers have a substantial incentive to ensure that they are hiring qualified workers. One bad hire can create a legal and financial nightmare. Without conducting due diligence in hiring, an employer risks hiring someone with an unsuitable criminal record, false credentials, workplace violence, business interruption, embezzlement and a host of other issues.

If an employer hires someone that they either knew or should have known, in the exercise of reasonable care, was dangerous, unfit, unqualified or dishonest, then that employer can face a lawsuit for negligent hiring if that hire caused damages or commits a crime. Negligent hiring is the opposite of due diligence. Of course, employers do not intentionally go out of their way to hire a bad employee. If an employer makes a bad hiring decision, and someone is harmed, then the jury is usually faced with the issue of whether the employer reasonably "should have known" that the applicant represented a risk.

Many employers feel they are at a disadvantage when sued for negligent hiring or retention. Cases will normally have some sort of serious harm (death, assault, rape, sodomy, child molestation, theft, embezzlement, identity theft). That is because the lawyer for the plaintiff (the injured party that is suing) often is working on a contingency fee, and will normally only invest time and money in serious cases. Jurors are often employees themselves and may not feel overly sympathetic to an employer that had the ability, duty and resources to prevent harm through due diligence. As a rule of thumb, unless an employer has a compelling reason why an injury is not its fault, the employer has a tough job defending these suits. Even if the employer wins, it is at the expense of negative publicity and a great deal of time, money and effort spent involved in the litigation. (For potential employer defenses that can effective, see the next article)

As every human resource professional knows, the major source of employee problems are problem employees. Efforts at minimizing the hiring of problem employees go a long ways towards creating a safe and profitable workplace.

Written and reported by www.ESRCheck.com 11/25/09

Ripe for Negligent Hiring?

According to an article in the Connecticut Law Tribune concerning negligent hirin g lawsuits, “The potential for litigation seems to be high, based on U.S. Department of Labor statistics. On average, more than 2 million acts of violence occur in the workplace every year. When it comes to assaults, women are targeted at a much higher rate than men, both in Connecticut and nationally. From 2005-07, the U.S. Department of Labor tracked 1,250 non-fatal workplace assaults in Connecticut, and women were the targets in 77 percent of those cases. On the national level during the same period, women were targeted in 63 percent of the more than 47,000 non-fatal assaults.”

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Best Practices for Handling Social Security Mis-Match Letters

The Department of Homeland Security (DHS) recently rescinded their proposal to impose a 90-day safe harbor for employers who receive a notice from the Social Security Administration that a social security number being used by their employee does not match the name on file with the Social Security Administration. Large unions and various business groups feared that work-authorized individuals would accidentally get caught up in the fray and be erroneously terminated. After protracted litigation, DHS backed down and rescinded the proposed rule.

Many social security mis-match letters are created as a result of women being married and changing their name to something different than what is on file at the Social Security Administration. Other reasons include typographical errors at the time of hire, individuals who naturalize and change their name, or individuals using a false name that does not match the social security number.

The rule would have given employers 90 days to resolve the matter without incurring any liability for employing an individual who may lack work authorization. The rule would have also required that if you and the employee cannot resolve the discrepancy, then it would have required that you fill out a new I-9 for the employee using documents other than a “List C” social security card. If you failed to do so, you and your company could have been held liable for civil and criminal penalties. Now that the proposed rule has been rescinded, the key question is where does that leave you, the Employer?

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How to Dispose of Consumer Information

It's important to follow the regulations set out by the FTC pursuant to FCRA Section 628 when it comes to disposing of all consumer information. Paper and electronic reports must be destroyed so it cannot be read or reconstructured. Employers need to show due diligence when a shredding firm is hired. For more information go to: http://www.ftc.gov/os/2004/11/041118disposalfrn.pdf

For best practices when it comes to protecting privacy in the workplace and for best practices when it comes to handling documents that contain PII, see the recommendations from the Privacy Rights Clearinghouse available at: www.privacyrights.org/ar/SDCountyIT.htm

Identity Theft Experts Offer Advice For Job-Searching

With the unemployment rate rising and living costs going up, more people are looking for new jobs or second jobs. Job seekers often register with employment agencies, check employment ads, mail out unsolicited resumes, network with others, post resumes on job search sites, and often search craigslist.

Unfortunately identity thieves are taking advantage of these uncertain economic times to scam job seekers and gather personal identifying information. The Identity Theft Resource Center offers these suggestions to avoid being victimized:

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Consumer Report Disclosures

TALX Corporation, a subsidiary of Equifax Inc., has agreed to settle Federal Trade Commission charges that it violated federal law by failing to provide certain disclosures to users of their consumer reports and to entities that provide information for consumer reports. The proposed settlement requires TALX to pay a $350,000 civil penalty and bars future violations.

TALX sells income and employment history information about consumers to lenders, pre-employment screeners, and others for use in determining their eligibility for credit, employment, or other purposes, which makes it a consumer reporting agency subject to the Fair Credit Reporting Act (FCRA), according to the FTC. The company allegedly violated the FCRA by not providing the “Notice to Users of Consumer Reports: Obligations of Users Under the FCRA,” which notifies users of consumer reports of their statutory obligations, including notifying individuals if the user takes adverse action against them based on their consumer report. The company also failed to provide the “Notice to Furnishers of Information: Obligations of Furnishers Under the FCRA,” which notifies furnishers – entities that furnish information for consumer reports – of their obligations to provide accurate information, correct and update inaccurate information, and reinvestigate consumer disputes.

The proposed settlement requires TALX to provide the required notices to users and furnishers. If TALX provides the notices electronically, it must follow certain specifications to make the notices “clear and prominent.” Specifically, the notices must be unavoidable, of a size and shade and on the screen for a duration sufficient for an ordinary consumer to read and comprehend them, easily printable, and presented on the principal screen or landing page where the disclosure is relevant. These requirements are designed to ensure that the notices will be effective in communicating the information online.

The proposed settlement also contains record-keeping and reporting provisions to allow the FTC to monitor compliance with the order.

The Commission vote to authorize staff to refer the proposed complaint and stipulated final order to the U.S. Department of Justice for filing on the FTC’s behalf was 4-0. The documents were filed in the U.S. District Court for the Eastern District of Missouri.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. A complaint is not a finding or ruling that the defendant has actually violated the law. Stipulated court orders are for settlement purposes only and do not necessarily constitute an admission by the defendant of a law violation. Stipulated orders have the force of law when signed by the judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

Review of Criminology Study on “Redemption” for Purposes of Employment

A new study just released by researchers from Carnegie Mellon University has attempted to devise a model to quantify what most people assume intuitively – that the relevance of a criminal record for employment recedes over time when a person is not re-arrested. The study looks to develop a methodology to measure how much time must pass before an applicant with a criminal record is no greater risk than an applicant without a criminal record. (Blumstein, Nakamura, “Redemption in the Presence of Widespread Criminal Background Checks", Criminology, Volume 47, Number 2 (2009))

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