What is negligent hiring, and how do I protect my company from negligent-hiring liability?
A negligent hiring case 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, if known, should have disqualified the individual from consideration. One preventive measure for negligent hiring is to perform a reasonable background check on potential employees. This may include conducting interviews, verifying work and educational histories, checking references and conducting a criminal history search on all candidates who have accepted a conditional offer of employment.
Why can’t I just Google candidates or use a search engine or people-finder type offering?
Employers should use caution when resorting to Google or any other method of internet searching when evaluating a potential candidate for employment. The risks may include obtaining information related to a person’s protected class status which may make you more vulnerable to a discrimination claim and gathering information pertaining to an individual’s personal activities which may lead the employer to consider information that would not be revealed on a background report. Most importantly, these types of searches raise valid issues of accuracy. How can you be sure you are actually viewing the information about your candidate and are not viewing the information of someone else? This is especially a critical point when the candidate has a common name.
Further, the Federal Trade Commission (FTC) is actively looking into companies that provide information about individuals (such as criminal history) with the disclaimer that it should not be used for employment purposes. As an example, in January 2013, the FTC announced an administrative settlement with two companies that offered mobile apps purported to provide information regarding an individual’s criminal record(s). The companies attempted to circumvent the Fair Credit Reporting Act (FCRA), by including disclaimers on their products that the services offered could not be considered a consumer report and that the information should not be used for any purpose including employment. However, the apps were marketed in a different fashion, asking “Are you hiring somebody and wanting to quickly find out if they have a record?” and informing the potential customer that their products could conduct criminal searches for the low price of 99 cents.
The FTC did not buy into the companies’ disclaimers and determined that the companies were operating afoul of their legal obligations. The settlement prohibited the companies from continuing in their current business model. In addition, the companies must respond to the FTC’s requests for business records demonstrating compliance with the order for the next five years and must deliver a copy of the order to several parties including officers, directors and employees with responsibilities affected by the order. While employers who used these services were not involved in this settlement, it still raises questions about how useful the data is, whether it is indeed accurate information and whether you are risking a negligent hiring situation by not conducting a proper background check with a reputable Consumer Reporting Agency.