Negligent Hiring/Retention

Human resources professionals have been breathing a bit easier because

of the retrenchment in the "At-Will" Employment Doctrine.(1) The repreive

was short lived, however, as a relatively new employee relations law

scourge has surfaced- The Tort doctrine of negligent hiring/retention.(2)

Although this theory is not new, it's prominenece is growing. This

added cause of action in tort law is resulting in increased employer

liability and risk. Often, Court award outcomes in these cases are in the

hundreds of thousands of dollars, and more, and are likely to be upheld on

appeal.

The limitations placed on human resources professionals and employers

relating to preemployment inquiries make an interesting contrast to the

negligent hiring dogma. Discrimination law, such as title VII of the civil

rights act of 1964, as written and/or interpreted by the courts, proscribes

many inquiries that have a negative employment-related impact on protected

classes of people.

Plaintiffs also are asking the courts to curb employer access to

employee records and other personal information under the right to privacy

arguement, a constitutional arguement employing fourth amendment illegal

search and siezure guarantees. Human resources managers can be heard in

corporate hallways mumbling about these apparent conflicts and

incongriuties in common law and government mandate.

Historically, If a worker commited a negligent act, a plaintiff often

would sue his or her employer under the theory of Respondeat Superior, or

let the master respond. (3) This doctrine holds the employer liable for his

or her employees' negligent, on the job actions and does not depend in any

way on the fault of the employer. (4) Common law held that employers owed

thier employees a duty to provide a safe place to work. Eventually, this

duty was extended to providing safe employees, because the courts reasoned

that a dangerous co-worker is comparable to a defective machine. (5)

In the majority of successful negligent hiring/retention court cases

the nature of the relationship between customer plaintiff and business

defendant seems to drive the outcome. In cases in which plaintiffs have

recovered, there appears to be a higher degree of duty or care required

between business and it's customers because of the nature of the product or

service provided.

Fundamental to a negligence action is the existence of a duty owed by

the defendant to the plaintiff ( See Bidar Vs. AM-FAC, Inc., 66Haw. 547,

551; 669 P. 2d 54, 158 {1983}.) A defendant owes a duty of care only to

those who are foreseeably endangered by the conduct and only with respect

to those risks or hazards whose likelihood made the conduct unreasonably

dangerous. ( See Hulsman vs. Hemmeter Development Corp., 65 Haw. 58, 68,

647 P. 2d 713, 720 { 1982}.)

Therefore, duty under the negligent hiring theory depends on

forseeability, that is, "Whether the risk of harm from the dangerous

employee to a person...was reasonably forseeable as a result of

employment."( See Di Cosala vs. Kay, 91 N.J. 159, 450A. 2d at 516 {1982}.)

Some examples of a higher duty of care include Landlord/tenant

relationships, common carriers (railroads, airlines, ship lines),

hospitals, and other patient care facilities and taxi services.

Often when a negligent hiring complaint is initiated a simultaneous

allegation is made of negligent retention. Negligent hiring allegations

imply a preliminary error in terms of the hiring process ( See Ponticas vs.

KMS Investments, 331 N.W. 2d, 907 {1983}.) This means that the employer

should have known before hiring an individual that the person was unfit for

employment. Negligent retention is an after-the-fact consideration (See

Cherry vs. Kelly services Inc., 2d 463 {1984}) applying to the instances in

which the employer becomes aware of the employee's unfitness after hiring

him or her. Here the employer has an obligation to initiate an action to

counter the person's unfitness, including retraining, reassignment,

rescheduling or discharge ( See Cutter vs. Farmington, 498 A. 2d 316{N.H.

1985}.) For example, in Abbot vs. Payne et al (57 So. 2d 1156 {Fla. App. 4

Dist. 1984}) a negligent hiring and employment allegation was at issue. The

focused action precipitating this case occured after the worker terminated

employment.

The case involved a customer who contracted with the Apollo Termite &

Pest Control Co. to provide regular service in her home. Apollo assigned

the co-defendant employee, Randall Payne, to provide service in Abbot's

home. Abbot worked full time, so it was necessary for the pest control

company to have access to her home while she was away. Therefore the

company requested that Abbot provide a passkey. Because Payne would have

the key and, therefore, independant access to her home, Abbot sought and

obtained representations from the firm that Payne was reliable and

trustworthy, and the company was fully bonded. quently, based on assurances

from the company, the plaintiff allowed Payne to enter her home. Shortly

after his employment with Apollo ended, Payne used the passkey to break

into Abbot's home at night, and psysically assaulted her. The court found

in favor of Abbot, saying that liability for an ex-employees conduct can

occur, and that the employer has a duty to inquire into the background of a

job applicant, including past employment and references.

In its opinion, The court cited William vs. Feather Sound Inc. ( 386 So

2d 1238, 1240 {Fla 2d DCA 1980} petition for review denied, 392 So. 2d 1374

{Fla 1981}) saying: If an employer wishes to give an employee the indicia

of authority to enter the living quarters of others, it has the

responsibility of first making the inquiry whether it is safe to do so. The

court reaffirmed the ( Williams ) opinion, indicating that when an employer

provides assurances to a customer, vouching for an employee's honesty,

reliability and trust, that employers responsibility ( And liability ) is

increased accordingly.

In another case Salinas vs. Fort Worth Cab & Baggage Co. ( 725 S.W. 2d

701 { Tex 1987 }) the plaintiff Maria Salinas, was raped, sodomized and

robbed by a taxicab driver who accepted her as a fare. The driver had an

extensive criminal assault record, including rape and assault. The

plaintiff argued that this information should have been available to the

Ft. Worth Cab & Baggage Co. and that the employer should have known about

the employee's criminal record and made use of it before hiring him. The

defendant cab company admitted that it made no preemployment check of the

driver's background. The court held the business liable for negligent

hiring and retention of a violence prone employee who had willfully injured

others during the course of his employment.

Duty of Care Increases depending on Industry

In C.K. Security systems vs. Hartford accident and Indemnity Co. ( 137

Ga. App. 1, 159, 223 S.E. 2d 453 {1976}), A Georgia court of appeal held

the employer to a higher duty when it investigated backgrounds of security

guard applicants.

A guard provided by a sercurity service entered a client's business and

stole a blank check. After forging signatures on the check, he successfully

cashed it through the tenants bank. The Bank sued the security company

alleging negligent hiring.

The security firm defended itself by saying that it had followed it's

usual pre-employment procedure and had contacted the individuals past

employers. The court denied summary judgement saying that because of the

nature of its business, the firm was required to exercise greater care (

I.E. Beyond what the firms usual practice entailed ) to ascertain whether

potential security guards possess specific characteristics, such as

honesty, that are required by the nature of the employment.

The health care industry is another prime example in which duty of care

is increased in regard to hiring and employment. In Joiner vs. Mitchell

County Hospital Authority ( 125 Ga. App. 1, 186 S.E. 2d 307 {1971}, aff'd

229 Ga. 140, 189 S.E. 2d 412 {1972}) A negligent hiring claim involved the

alleged failure of a hospital's employment procedure in not requiring proof

of the physicians qualifications.

The plaintiff's spouse was brought to the hospital complaining of chest

pains. A hospital physician examined the patient and released him saying

that the patients condition was not problematic. After arriving home, the

patient's pain intensified. On returning to the hospital the patient died.

In her suit against the hospital, the wife claimed that the hospital

failed to require proof of the physician's professional qualifications and

that simply relying on the fact he was state licensed was not enough. The

Georgia appeals court agreed, saying that hospitals have an affirmative

duty to conduct independant investigations into a physician's professional

competence.

Contrasting the negligent hiring issue is that of negligent retention.

In Pruitt vs. Pavelin ( 685 P. 2d 1347 { 1984}, a realtor hired an agent to

sell its real estate listings. Management knew of some of the indiscretions

and became aware of others on the part of its newly hired real estate agent

when employment was offered. These indiscretions included forging documents

for a former employer, a conviction for passing bad checks and lying about

obtaining a realty license. Despite knowledge of these matters, the realtor

vouched for the employee's character to the public. The court concluded

that the firm was liable for the consequences of it's agents misconduct

because most of the individual's past actions became known to the employer

after this person was hired.

In a New Mexico case, Valdez vs. Warner ( 742 P. 2d 517 { N.M. App.

1987}), a bar employee assaulted a patron, Victor A. Valdez, In the parking

lot of his employer and his co-defendant Z&E Inc. The plaintiff brought

actions.

The court of appeals accepted evidence that the " defendant previously

physically assaulted the son of the owner of the (Co) defendant bar, and at

one point he was banned from the bar for fighting, and that while working

as a bouncer in the same bar he was involved in other physical

alterations." Even with knowledge gleaned before he was hired and

subsequent knowledge gained after employment, the defendant was retained.

The court found " There was evidence.... that the owner of the bar was

negligent in Hiring Warner with his background of violent behavior..."

An additional twist to this case was the plaintiffs request for

punitive damages. The courts response to this request was that " Recovery

of punitive damages is permissible if the jury finds the wrongdoers conduct

to be willful, wanton, malicious, reckless, oppresive or grossly

negligent..."

The court added that " Gross negligence is a sound basis for award of

punitive damages." The case was remanded to a lower court with instructions

saying that if a jury found, based on the evidence, That Z&E Inc. was

guilty of gross negligence, than punitive damages would be appropriate.

Courts that have heard and ruled on negligent hiring/retention charges

have indicated that employers are responsible to thoroughly investigate the

backgrounds of the applicants.

Employers generally are viewed by courts as being accountable for

thier ( Negligent ) actions, if:

* A Link can be established between employee actions and third-party injury.

* Information concerning the employees unfitness, instability, or

unsuitability for a job was available before hiring or became available

after hiring.

* It can be established that such information is or was used to make a

decision thereby taking the public out of harms way.

If these criteria are met, the level of care demanded from an employer is

higher ( 6 )

Extensive state and Federal legislation and executive orders exist

concerning equal employment opportunity EEO that directly affects business

employment practices. Most statutory legislation and federal executive

orders are designed to prohibit employment discrimination based on race,

color, national origin, gender, age, and handicap. Title VII the hallmark

statute in this field of law, addresses illegal discrimination in three

areas: Intentional discrimination, Disparate impact, and Disparate

treatment. The most controversial of these is Disparate impact.

The landmark US Supreme court case Griggs vs. Duke Power ( 401 U.S. 424 {

1971 } ) interpreted disparate impact as any nuetral employment practice

that adversly affects a protected class of people ( e.g. Blacks, women and

so on). The court stipulated that discrimination could be practiced legally

only: 1) If a manifest relationship could be established between

employment requirement and employee job performance; 2) In the event of

safety considerations ( See New York City Transit Authority vs. Beazer 19

FEP Cases { 1979}); or 3) for a so called business necessity. ( 7 )

Examples of adverse impact theories include:

* Requiring a job applicant to meet minimum height and weight

specifications ( CFR 1607 { 1976})

* Using arrest and conviction records in selection ( See Green vs. Missouri

Pacific Railroad Co., 523 F. 2d 1290, 10 FEP Cases 1409 )

* Applying a rigid clean-record policy as part of an employment procedure (

See EEOC decision no. 71-797) ourts hearing cases alleging disparate impact

that focus on employment policies and practices are neutral but

discriminatory in effects. Courts, however, look at consequences rather

than motive, effect rather than purpose. (8)

PLAINTIFFS USUALLY PREVAIL IN THESE ACTIONS

It is important to note that plaintiff successes far outweigh

successful defenses in negligent hiring/retention actions. There are some

avenues of defense, however, that should be addressed. These include: STATE

LEGISLATIVE RESTRICTIONS. Many states have passed laws that limit employer

access to certain personal background information of a job applicant. A

prime example are laws that restrict access to criminal conviction records.

Typically, state laws only allow the use of criminal conviction information

if there is a direct relationship between the crime for which the job

applicant was convicted and the job for which the person applied. ( See

Guillermo vs, Brennan, 691 F. Supp. 1151 {N.D. Ill. 1988}.) In this

example, a person who was convicted of theft was applying for a job as a

laborer ( who would have no contact with anything of significant monetary

value). Using the person's conviction record would not be appropriate in

considering him for employment. LABOR CONTRACT If an employer is bound by

contract to follow a procedure for employing persons and the employer

follows the contract, his or her exposure to actions could and probably

would be reduced. PROPER NEXUS IN CAUSATION To prove a case of negligent

hiring/retention effectively, the accuser must show that information about

the wrongdoer was available before or after hiring and was directly related

to the injuries he or she suffered as a result of the individual hired by

the employer.

Many Human resources managers have interpreted the Supreme Courts

Griggs EEO Opinion too narrowly. These supervisors might conclude that the

manifest relationship needed to argue in favor of a business necessity

exception in using a particular employment qualification is nearly

impossible to attain. As such, the overly awed human resources professional

might ignore the need to incorporate certain job requirements into a job

description, fearing an EEO charge alleging dispararte impact. These

managers, however, must look at each job and the effective and safe

performance of that job, and then compare performance to equivalent and

required job specifications. effective and safe job performance includes

reducing unnecessary public risks when making employment decisions. If

there is a Bona Fida need to affect a protected class adversly so that a

particular job may be performed effectively and safely, claim the business

necessity exception. By Ignoring such exceptions, the human resources

manager may be increasing his or her exposure to negligent hiring/retention

claims.

Prudent human resources professionals also must address the need of

awareness and understanding associated with the legal theory og negligent

hiring/retention. They should balance this area of the law with equal

employment mandates and privacy considerations and develop basic pre- and

post- employment policies and practices. The EEO exceptions allowed under

business necessity should be persued aggressively whenever appropriate.

Place particular emphasis on the pre-employment stage, and management

should adhere consistently to prudent preemployment procedures. Some

guidelines are available that may help derive complete background

information about job applicants. Although they are not new, some of these

proposals are controversial and thier use should be governed by an

employer's need for certain information, state and federal laws ( e.g.

criminal convictions information ).

1) Require all job applicants to complete an employment application form

that meets federal, state, and local employment related laws. Also require

applicants to sign the application form, signifying that all the

information provided is truthful and accurate. (10) As part of the

application process obtain the job seeker's written agreement to perform a

background check (11). In addition to basic information (name, address,

education and employment history), employers who can show a definitive need

for facts regarding criminal convictions should require this information as

well. Remember, If a higher degree of care is required between a business

and it's customers and if potential harm to the customer ( or any third

party) is foreseeable, the companies liability automatically is greater.

Also request and obtain copies of any professional license or degrees an

applicant claims to have.

2) Conduct a nondiscriminatory job interview using the completed

application to clarify and confirm information supplied by the applicant.

The interview also provides an opportunity for an employer to determine

whether an applicant is fit for the job which he or she applied. Use this

opportunity to pursue and resolve any doubts about the applicant .

Empolyers who do not conduct a job interview follow a hit and miss

employment philosophy.

3) Check the applicant's employment references so that information supplied

by the applicant can be confirmed. Base the inquiry on the job applied for.

(13) Many of the cases previously discussed address the need to obtain

references. None of the cases however, touvch on the problems employers

encounter when they try to obtain employment references from past

employers. Typically, the employer attempting to obtain a reference is

concerned about invading the applicants privacy. Previous employers are

often guarded in thier comments - for fear of a potential libel suit being

filed by the former employee. Many past employers refuse to provide

information and simply say " No Comment. " Even if the human resources

professional is unable to secure information from previous employers, at

least the record is established that an attempt was made to obtain these

references.

4) For high-risk, Medical-related occupations and job openings that require

extensive physical exertion, a medical history request and a pre-employment

physical examination, including a drug and alcohol test should be required

as well. Inquire as to the applicants past and present medical and physical

conditions, including illnesses, injuries or other conditions that could

impair safe and effective job performance.

5) All sources of information should be documented in writing whenever

possible, including the results of job interviews. Many cases hinge on

being able to produce a written document in court. These strategies should

help human resources managers obtain much of the information needed to make

employment decisions that result in hiring safe and capable employees.

These guidlines also serve to reduce exposure to negligent hiring/retention

claims, thus minimizing EEO Challenges.

Footnotes

1- See in general, the following sources for background about the "

at-will" employment doctrine: Fenton, J., and Timmins, S., " the at will

Employment doctrine: Implications and recomendations for the small business

firm," Journal of small business management, Jan 1982, p32 ;Hames, D., "

the current status of employment-at will," Labor law journal. Jan 1988,

pp19-32; Greylin, M., " Fired Managers winning more lawsuits," The wall

street journal 7 Sep 1989 page b-1.

2- Fenton, J., " the negligent hiring and retention doctrine," Nursing

Management Sep 1989, p28.

3- Restatement ( Second), Agency 219 (1957).

4- Brill, R. L., " The liability of an employer for the willfull torts of

his servants," Chi-Kent, Law Review. Jan 1968. See also Reibstien, L., "

Firms facing lawsuits for hiring people who then commit crimes," The wall

street journal april 30, 1987 p.19.

5-North, J.C., " The responsibility of Employers for the action of thier

employees: The negligent hiring theory of Liability," Chi-Kent Law review.

February 1970 p.719.

6- Gregory, D., " Reducing the risk of negligence in hiring," Employee

relations law journal. Summer 1988, p34.

7- In addition to the business necessity exception are section 703

exceptions called Bona Fida occupational qualifications (BFOQ). These

narrowly construed exceptions encompass those instances in which legal

discrimination based on gender, religion, or national origin ( But Never

race) are practiced and are reasonably necessary to the usual operation of

a particular job or enterprise.

8- Blumrosen, H., " Strangers in Paradise: Griggs vs. Duke Power Co. and

the concept of Employment Discrimination," Michigan Law Review, 1972.

9- See, In general, " Employer Liability for the criminal acts of employees

under negligent hiring theory: Ponticas vs. K.M.S. Investments," Minnesota

Law Review. 1303 (1984)

10- Not following this basic procedure could imply employee negligence. See

Weiss vs. Furniture in the raw, 62 Misc. 2d 283, 306 N.Y.S. 2d 253 ( N.Y.

Civ. Ct. 1969).

11- Gregory, D., Op. cit., P.40.

12- Jacobs, R., " Defamation and Negligence in the Workplace," Labor Law

Review. Sep 1989 p.52.

13 Ibid.