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Avoid your own HR horror story

February 1, 2018

By Susan Chance, courtesy of SBAM Approved Partner ASE

While more and more companies are conducting background checks and drug screening, there are still many employers who don’t want to spend the money it takes to complete a thorough background check.  Penny wise, pound foolish is an old British saying that means to be extremely careful about small amounts of money and not careful enough about larger amounts of money.  Failing to complete a full background check on new employees may be a pound foolish decision especially when workplace violence is increasing. 

The definition of negligent hiring, as stated by USLegal, Inc., is a claim made by an injured party against an employer based on the theory that the employer knew or should have known about the employee’s background which indicates a dangerous or untrustworthy character.

Part of an employer’s job is to provide a safe work environment for its employees, and employees as well as customers have a right to the reasonable expectation that they will not be injured or harmed at the work. So how is an employer responsible if one of their employees harms someone, either physically or financially, while on the job? If the injured party believes that the employer should have known about the person’s criminal background or history of violent behavior, the employer can be held liable for negligent hiring.
Employers are more vulnerable to these types of claims when they fail to exercise reasonable care in hiring and retaining employees. Reasonable care would include doing a background check on the following:

  • Criminal background
  • Employment references
  • Personal references
  • Education validation
  • Drug screening
  • Other checks required by position such as 
  • Driving checks
  • Credit checks
  • Physicals

Some examples of the types of claims which have been brought against employers and won are:
An employee raped a co-worker. The attacker was on the sex offender registry, which is discoverable information.

  • An employee assaulted his boss, and the injuries from the attack were so severe the boss had to go to the hospital. In this case the attacker had felony offenses on his record, and was not eligible for rehire with two previous companies.
  • A manufacturing company had product disappearing before it reached the customer, and a charitable donation jar was stolen. The investigation traced the crimes back to one employee. The person had served time in prison for arson and owed $100,000 in restitution. The employer did not conduct a background check, so a partner in the business sued for damage to reputation.
  • An employee committed a violent crime against a customer while under the influence of drugs. The employer had not conducted a drug screen and did not conduct reference checks with previous employers.
  • An employee caused an accident resulting in injury to a customer. She was an alcoholic living at a rehab facility at the time. Not only was there an issue with pre-employment testing, but the employer also did not send the woman for the post-accident test until 2.5 hours later.
  • An employer failed to conduct a background check or drug screen on an employee even though it was workplace policy to do so. The employee, who had a history of drug abuse, murdered her husband when she had a relapse.

The costs to these employers was in some cases in the millions of dollars – exponentially more than what the cost of completing an effective background verification would have been.

Don’t be penny wise, pound foolish.  Make sure that your company has a comprehensive background and drug screen policy and that the policy is followed!

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