Magazine article Supervisory Management

Avoiding Claims of Negligent Hiring

Magazine article Supervisory Management

Avoiding Claims of Negligent Hiring

Article excerpt

Avoiding Claims of Negligent Hiring

INCREASINGLY MANAGEMENT, INCLUDING SUPERVISORS, ARE being held liable for the acts of their employees. These negligent hire/retention cases are on the increase and can be even more costly than discrimination litigation. But there are protective steps that can be taken. To protect yourself and your company, you need to understand how much pre-employment screening is considered enough by the courts.

Multimillion-dollar jury verdicts for negligent hiring and retention of employees are attracting the attention of employers.

In the past, most lawsuits were brought by employees who were either not hired, not promoted, or discharged. New negligent hire actions are increasingly being instituted by employees and by innocent third parties, such as customers, who have been injured by the criminal, violent, or negligent acts of an employee. These costly causes of action are the result of employees who should not have been hired in the first place, who should not have been retained if hired, or who should not have been placed in certain positions.

These lawsuits can be more costly than typical employee litigation when it comes to punitive damages. In one negligent hiring case filed against a non-profit corporation, the plaintiff rejected a settlement offer of $500,000. The jury verdict was $5 million.

And, most important from your perspective, supervisors are being held personally liable for the acts of their employees.

Negligent hiring cases

The typical negligent hiring case involves an intentional tort committed by an employee. Some intentional torts are fraud, assault, battery, and interference with contractual relations.

Any employment decision could result in a negligent hire or retention cause of action. Recruitment, hiring, applicant screening, drug testing, performance evaluations, employee assistance programs, noncompete provisions, and post-employment references are all potential problems areas.

Generally in cases won by the plaintiff, the employer is found to have improperly checked the qualifications of an applicant prior to hire. The question presented to the jury is: Did the employer know or should the employer have known that the employee posed a risk to others? The duty of the employer is to exercise reasonable care to ensure that workers and customers are free from risk of harm inflicted by unfit employees.

Cases are evaluated on three factors:

1. The employee who caused the injury was unfit.

2. The employer's failure to check the employee's fitness was the proximate cause of the injury suffered; and

3. The employer knew or should have known of the unfitness of the employee. In a case in 1983, Burch v. A. & G Associates, for example, a taxi driver took a passenger to the desired location and received the correct fare. However, the passenger did not tip the driver. The taxi driver then assaulted the passenger with an iron bar and stole his pants. The taxi driver was later convicted of criminal assault.

The customer sued the taxi driver's employer for negligent hire. The employer's motion to dismiss was denied. The court held that if the customer could prove that the employer failed to properly investigate the driver's fitness to see if he was dangerous before he was hired, the employer could be held responsible for the assault.

Under the legal theory of respondeat superior, an employer would only be responsible for actions performed within the scope and course of an individual's employment. But under the negligent hire theory, an employer can be liable for acts that occur outside the scope of an individual's employment. For example, in DiCosala v. Kay, a boy scout camp was found liable for negligent hire when a boy was injured by a gun belonging to a ranger hired by the camp. The court noted that the camp director knew or had reason to know that there was a dangerous weapon at the facility. …

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