For example, if the employer hires someone who has a history of sexual harassment lawsuits and they hired that person who became a repeat offender. Or, if the employee had a criminal history of repeated credit card theft and was hired into a retail organization where they again broke the law. Pre-employment background checks and employee hiring are two ways that we have to eliminate the risk associated with negligent hiring and negligent retention. This is especially important if the employee is in contact regularly with the public.
However, some states restrict when and how these employment checks can be conducted. Some states even restrict credit checks on new hires unless they handle money. These conflicting rules create liability for employers worried about negligent hiring and retention. One of the best answers to limit liability in these areas is to consider an employee of record EOR. Companies like FoxHire are experienced in hiring contract, temporary, and full-time workers.
Employers can be held liable for willful misconduct by their employees. Negligent hiring and retention lawsuits have cost companies millions of dollars in damages, forcing many companies into bankruptcy. Case law in every state recognizes the concept of negligent hiring and retention liability. Thus all employers need to understand this business risk, as employers are affected by both their current and former employees. If this individual had a criminal history of identity theft or credit card theft, then the employer would most likely be found negligent in a courtroom.
Another example is for any company that accepts credit cards. Be sure that the background screening company is also a consumer reporting agency, and one that understands the Fair Credit Reporting Act FCRA, the federal law that governs employee background checks.
By performing a thorough background check, the employer can show their company was not negligent, whether defending themselves in a court of law, in front of a television or newspaper reporter, or in social media.
Both of these negligent theories are closely related. Under both:. The major difference between negligent hiring and retention is basically the timing. But, the theories of negligent hiring and retention do not give an employee free reign to bring any cause of action for all risks an employee poses to a co-employee.
Instead, courts have held that an employer is only liable if the employer knew or should have known that an employee would harass or otherwise harm another employee. In Grozdinich v. Leisure Hills Health Center Inc. In that case, Leisure Hills, a healthcare facility, hired a supervising nurse, John Parson, who had previously served as a nurse at a different employer. Parsons had resigned from a previous job because of accusations of sexual harassment. After the third incident, the subordinate filed criminal charges and complained.
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