This danger is the result of individuals, of whom very little or nothing is known, being hired into the work force.
Consider this: The U. S. Department of Commerce statistics indicate 30% of all business failures are the result of poor hiring practices. Embezzlement costs commerce $4 billion a year and other employee crime, both blue and white collar, costs business another $45-50 billion annually.
Arthur Young & Associates report that over 43% of shrinkage in retailing is due to internal theft, not mistakes or shoplifting. According to the FBI, 86% of bank losses are internal, not due to burglary or robbery. The Surety Association of America states that insurance bond costs for employee honesty rose to $344 million in 1984. Other statistics show that most people who steal, cheat, defraud, embezzle, or leak proprietary data are never discovered by their former employers.
DRUGS & ALCOHOL
The Research Triangle Institute estimates that on-the job drug and alcohol abuse costs the U.S. economy $60 billion a year.
Drug Abusers Are:
3 times more likely to be involved in an accident.
Likely to take more, and longer absences from work.
5 times more likely to file for Workers Compensation.
Less productive, usually functioning at only 65% of their work potential.
Most employees who abuse drugs or alcohol on the job or at home are never detected. The only employees who are usually identified abusing drugs or alcohol at work are the extreme cases, who have finally slipped up so badly they've caused an event that draws dramatic attention.
It is believed that a majority of job applicants misrepresent their previous work history, salary or education. Many applicants list jobs they never had or omit the ones an employer really wants to know about. In excess of 1 in 20 falsify name, Social Security number, and/or driver's license in order to hide a conviction of sorts.
Furthermore, the people with the most serious problems are usually attracted to job positions most sensitive to their activity. For example, shoplifters are attracted to sales, while violently prone individuals to security and so on. When applying for a position, these people assume that most companies are reluctant to perform pre-employment background screening. Too often, they are right, and this leads to costly litigation.
NEGLIGENT HIRING
THE BIG, NEW LEGAL TRAP
Negligent hiring is far broader than "respondeat superior" and enables a plaintiff to recover in many situations in which he otherwise would not be able.
DEFINITION: What the term negligent hiring means is that an employer hires an applicant without properly confirming the information provided on the employment application, and it is later discovered that the individual has a background indicating a propensity for misconduct on the job.
EXAMPLE: Let's say, for instance, that a cable t.v. installer enters a customer's apartment and rapes her. Is that cable company liable? A delivery driver gets drunk and causes an accident. Is his employer liable? A security guard at a liquor store shoots somebody. Is the store liable? The answer to these three questions is increasingly YES!! Ordinarily, a plaintiff in a "respondeat superior" case would have to prove the employee was acting within the scope of his employment. In these three examples, the victim would have a difficult time proving that the rape of a customer, driving while drunk or shooting somebody was within the scope of the employee's job description, therefore the employer would not be liable. On the other hand, under the negligent hiring theory, the employer could be sued if it was found that the employee's actions were foreseeable.
In other words, had a pre-employment check been done on the three employees, it may have been found that the t.v. installer had previously been convicted of sexual assault, the delivery driver of reckless driving or had a reputation of drinking and the security guard may have had a propensity for violence. This may be enough to establish the employer liability.
What if the employee acted intentionally and outside of the scope of his employment, can you still be held liable for negligent hiring?
Yes. Normally an intentional tort is considered clearly outside the scope of employment and so an employer is not liable. Unfortunately, an employer may be negligent in hiring someone who committed an intentional tort. In fact, the plaintiff may have a stronger case, because the kind of person who could commit an intentional tort is probably exactly the kind of person an employer should know better than to hire in the first place.
Lawsuits pertaining to negligent hiring practices, brought about by a third party (customers, vendors, etc.) against an employer have skyrocketed in the last five years. In California alone, 1987 saw over 54 cases settle in favor of the plaintiff to the average value of over $1.4 million each.
THE KEY TO SECURITY IS CAREFUL REFERENCE CHECKING
What if an employer had no reason to suspect that an employee was unfit when hiring him, but discovered after he had worked for a while that he might be dangerous? Could the employer be sued for retaining the employee? Yes. This theory is one of "negligent retention", very similar to "negligent hiring". The duty of the employer is to act responsibly in ensuring that the customers, clients and fellow employees are protected.
PROTECTIVE STEPS: Carefully inspect all information provided by job applicants, paying special attention to gaps in employment, patterns of brief employment, etc. Investigate such suspicious entries if the company is serious about hiring the candidate.
Obtain applicant's consent to gather information from former employers, personal references, credit bureaus, banks and other key sources. IMPORTANT: Have the employee sign a waiver in connection with this consent, releasing the company from any liability in connection with its research.
Consider using a service which can quickly and cost effectively supply you with criminal records, public filings, credit history (if legally applicable), driver's record or other such information. There are numerous sources that you can consult within this field who will help you plan the correct program to meet your needs.
EXAMPLES: If you were to hire an employee to sweep the factory floor, then a Social Security number check may be adequate. This could at least confirm that the employee is not using a false Social Security number. Employers found employing illegal aliens are now subject to a minimum $1000 fine on each case. A Social Security number verification is cheap insurance. A driver's record would be better, as it may indicate any drinking or drug habits, the degree of the employee's responsibility, confirmation of his address and previous addresses in addition to a physical description.
If you were to employ or promote someone into the payroll department or middle management, surely an employee with a criminal record for bank robbery would not be suitable. For obvious reasons, also unsuitable may be a person with poor credit or someone having recently filed for bankruptcy.
If an employee has a criminal record for assault or molestation, one would not want to put him/her into a position where they have ready contact with customers or young children.
The key is to exercise reasonable care to make sure that an employee is not a threat to the public or other employees during the course of employment and remains so.
CAUTION: Suppose for instance that a job applicant was recently arrested for robbery and was awaiting trial. It would seem likely an employer would be justified in being somewhat nervous about hiring him. Yet the vast majority of jurisdictions say it is an unfair employment practice to base hiring decisions on arrest records, rather than on conviction records. Even if an applicant has a conviction on his record, it may be unfair to refuse to hire him if the conviction was for a minor offense, if it happened long ago, or if the applicant has a long history of successful employment since the conviction.
The Equal Employment Opportunity Commission states that it is relevant whether or not the conviction was for an offense that is related to the job. You may not be able to refuse a position to someone who has a conviction as a child molester if the position he/she is applying for is one as a ditch digger BUT, you could possible refuse a convicted forger a job at the National Mint.
BE CONSISTENT: Be sure standards of information are applied uniformly. For example, if one item is ground for denial of a job for one person, it should remain the same for everyone else.
Be relevant, keep written documentation, obey the Fair Credit Reporting Act, make use of public records, but most important of all protect yourself, your company, and those around you by being ready, responsible and doing employment checks on all new applicants, those ready for promotion and any existing employee you may be concerned about.
If you honestly believe that your basic "face to face" interview is adequate on its own, and no prospective applicant is about to fool you, think about this for one moment:
Convicted killer and once Public Enemies Number 1, like Charles Manson and Ted Bundy had extremely high I.Q.'s way above that of the average person.
