The Cost of Negligent Hiring

Negligent hiring is one of the hottest topics in present-day corporate and employment law. The average cost of settling a negligent hiring lawsuit is nearly $1 million. The highest cost recorded was $26.5 million. These rulings tell us that employers have a responsibility to their customers and employees alike to demonstrate a duty of care when bringing on a new team member.

Negligent hiring 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 may indicate a dangerous or untrustworthy character. Most employers would not knowingly put an individual to work if they thought the person in question was a threat to their employees, customers, or the organization as a whole. It’s the precautions that organizations fail to take that get them into trouble.

Let’s walk you through demonstrating the duty of care as it pertains to your hiring process. You’ve made sure the client is qualified for the tasks required of the position, but it is important to note that your job doesn’t end there. It is equally important to ensure that the new hire is not a threat to either your employees or customers. The risk associated with a failure to properly vet incoming employees is too high to ignore, so what can organizations do to mitigate the risk?

As stated before, the court looks at not only what an employer knows, but what an employee should know. In regards to the stipulation concerning what employers should know, if public record of past transgressions exists, that falls into the category of what an employer should know. For example, if there is record of a violent crime committed by an applicant or employee, then the employer should be aware of it. Having a thorough, consistent screening process is a great place to start in demonstrating that duty of care. It not only shields the organization from negligent hiring lawsuits, but most importantly, it helps keep employees and customers safe.

In the case of the $26.5 million award, the healthcare provider failed to perform a background check. A proper pre-employment screening procedure would have revealed a whopping six prior felony convictions, but the healthcare provider neglected to administer a background check. This unfortunately resulted in the death of the client and his grandmother. That is why the importance of background screening cannot be overstated.

Whether your organization is big or small, you owe it to your employees and customers to use every tool at your disposal to properly vet incoming talent. Background screening helps to provide a safe environment for both employees and customers. Not only will this provide peace of mind, but protect your organization from a negligent hiring lawsuit.