What Is Negligent Hiring? How Can Employers Avoid it?

Negligent Hiring: What Employers Need to Know

What is negligent hiring, and why does it matter? This negligence is when an employer is blamed or held liable for an injury caused by one of its employees to a third party. The third party can be anyone (a fellow employee, a customer, a client, or a member of the public), and the “injury” can take many forms, from physical harm to theft or embezzlement. 

To prove that the employer was guilty of negligence, the plaintiff must show that the employee had a history that might have predicted the injurious incident; and that the employer knew, or should have known, the employee’s history before hiring them.

In any situation, hiring a new employee is a balancing act that involves a wide range of considerations, from the candidate’s skills, work experience, education, and other qualifications to how well the person meshes with the work style and culture of the workplace. Vetting steps are vital for employers to avoid negligent hiring claims. 

Studies show that the average settlement for a negligent hire is about $1 million, and that 80 percent of employers who are sued for this type of negligence either lose the court battle or pay substantial sums of money to settle suits out of court. 

In this post, we will take a closer look at negligence, including how employers can prevent negligent hiring claims.

Examples of negligent hiring

There are many examples of a negligent hiring claim spanning all industries, employers, jobs, work situations, and injurious circumstances. To provide a better idea of what a claim will resemble and how it develops legal substance, we will provide two example scenarios of an organization facing a negligence claim.

Example 1: On-the-job assault

A major retailer draws considerable traffic to its brick-and-mortar store each day. In choosing a new cashier for an open position, the business does not conduct a background history check. One day, during a particularly busy period at the store, a customer complains about slow service and angers the cashier. The cashier, feeling provoked, attacks the customer and injures them badly. The company terminates the cashier’s employment, effective immediately. The injured customer sues the business for the negligent hire.

Police investigations reveal that the cashier had a history of assault convictions on their record. A thorough criminal records search would have found these red flags and may have predicted a risk to customers or employees at the store. However, because the business did not conduct pre-employment background checks before appointing the cashier, it was not aware of the worker’s violent history. 

In this scenario, the injured party has strong grounds to show that the employer did not do its due diligence in vetting the cashier thoroughly before giving them a job that involved working closely with others in potentially stressful situations. Because of the skipped background screening, the retail company will likely be found liable for the customer’s injuries.

Example 2: Dangerous driver

A trucking company is hiring a new driver to handle a cross-country route after one of its most reliable drivers suddenly quits. Per the Federal Motor Carrier Safety Administration (FMCSA), the company is required by federal law to follow a strict list of standards when onboarding a new driver: employee background check standards from the FMCSA require motor vehicle record checks, pre-employment drug testing, and examining the candidate’s safety record, among other steps. To onboard the new driver as quickly as possible, the trucking company cuts a few corners during its screening process.

While out on the road a few weeks into the job, the new driver is involved in a severe accident that leaves three people dead and a dozen others injured. The driver is found at fault for the accident, and investigators find drugs in the driver’s system at the scene of the accident. Further investigation reveals that the trucking company failed to complete FMCSA-mandated drug tests at the time of employment. The candidate’s record also indicates a past conviction for driving while intoxicated. 

In addition to penalties from the FMCSA for noncompliance, the company faces a class-action negligence lawsuit from the individuals injured in the accident—including the families of the three late victims. The lawsuit alleges that the trucking company had a responsibility to conduct thorough employee background checks and drug tests before putting the driver on the road. 

In failing to observe this due diligence, the suit states, the business should be held legally and financially responsible for the “reasonably foreseeable” events that led to the deadly accident. With documented FMCSA violations in place, the plaintiffs have a strong case for proving negligence.

Negligent hiring laws 

Negligent hiring laws vary from one state to the next but typically follow a similar rubric. For a third party to have grounds for a negligence claim, they must be able to show that their situation satisfies several criteria:

1. The employer owed the plaintiff a “duty of care” that they breached in some way. In tort law, “duty of care” is a foundational element of proving a negligence claim. Duty of care is an obligation of a person or employer, expressed through acts or omissions, that could be reasonably foreseen to cause harm to others. In employment, an employer usually satisfies the duty of care by thoroughly vetting a candidate for a job.
2. In breaching its duty of care, the employer set in motion a chain of events that led to the injury of the plaintiff. In both of our examples, there is reasonable evidence that the employers failed in their responsibility to vet their candidates. In the process, they made decisions that led directly to injurious circumstances.  In Example 1, a thorough criminal background check would have identified the candidate’s history of assault, which may have led the employer to pause before choosing a finalist for a job in customer service. In Example 2, a drug test and criminal history check would have spotted red flags and disqualified the candidate from job consideration. In omitting these steps from the pre-hire process, the employer overlooked information that could have predicted the danger of putting this driver on the road. In both cases, plaintiffs can prove that better pre-hiring background checks could have prevented damage and injuries.
3. The injurious circumstance that occurred was reasonably foreseeable. In Example 1, the issue isn’t just that the cashier assaulted a customer. While such an occurrence would be serious in any situation, what makes it negligence is that the employer did not conduct a thorough background history check, and that the cashier had a history of violent assault that the employer overlooked. If the employer ran the criminal background search and the cashier didn’t have a criminal record, and then that worker assaulted a customer, there would be no case for negligent hiring claims. The circumstances of the case would not render the assault an occurrence that the employer could reasonably predict. 

States have varying rules about liability, grounds for negligence, and other factors. To help employers learn about the state-by-state nuances of negligent hiring law, the American Bar Association has compiled a resource documenting this information.

How to avoid negligent hiring claims 

The best way for a business to avoid a negligence claim related to a new hire is by using thorough vetting protocols, including pre-hire background searches. Candidates will provide information about themselves when applying for a job, submitting a resume and cover letter, completing the interview process, and providing a list of references. However, a candidate may also be excluding information that is relevant to the job (such as a criminal conviction from their past), or they may be outright lying about other prudent details (such as their education or work history). 

By taking steps to uncover this information, employers can gain a fuller picture of each candidate, driving more educated recruitment decisions and reducing the risk of lawsuits.

Background checks

Why is an employee background check an essential tool for an employer to use to avoid a negligence claim? Here are the different types of background screening tools and why each is important:

Criminal history searches

Criminal records can reveal histories of violence, sexual offenses, illicit drug crimes, abuse, neglect, driving felonies, theft, embezzlement, fraud, and other crimes that might indicate future offenses. There is no guarantee that a past offender will become a repeat offender, which is why it is critical for employers to consider how long ago a conviction occurred, how relevant the conviction is to the job and its responsibilities, and other factors. However, if there is reason to believe that giving a candidate a job might offer an opportunity for them to convict a crime that they have a history of committing—such as assault or driving under the influence of alcohol or drugs—that fact may trigger the employer to reconsider the hire.

Drug testing

Some industries require employers to observe strict drug-free workplace policies, including any industry regulated by the FMCSA. Employers that skip this requirement or allow employees to perform high-risk jobs after failing drug tests may be held liable for any accidents that occur because of intoxicated employees. For this reason, employers in warehouses, factories, jobs in the skilled trades, and other fields that involve potentially dangerous work will often use both pre-employment drug tests and random drug panels to avoid accusations of negligence.

Resume verifications

Resume lies are more common than employers realize. Job seekers often lie about work history, education, professional licenses or certifications, and other skills and qualifications. Verifying this information through background searches is an essential step for employers to take to ensure that a candidate is fit and qualified for the job at hand. 

While not often thought of in the same way as a company skipping a background history check and hiring a sex offender to work a job near minors, failing to verify a candidate’s credentials can also be a form of negligence. For instance, a law firm has an obligation to make sure that it is choosing lawyers who are legally permitted to practice law. If the firm fails to vet a new candidate thoroughly, it may be liable for acts or omissions of negligence.

Other checks

For jobs that involve driving, motor vehicle checks are a vital part of an employer’s vetting process. For positions in finance, credit history checks may be an indicator of a candidate’s financial responsibility. Civil court checks, reference checks, and terrorist watch list searches may have an equal level of importance for uncovering key information about a candidate depending on the position and industry. The importance of specific checks depends on the relevance of the checks and the information that they uncover to the job at hand.

The average negligent hiring claim rests on what an employer knew or should have known when they hired an employee who caused injury to a third party. Running detailed background searches is a way for employers to learn as much about candidates as possible so that they don’t make employment decisions without knowing about red flags that might indicate a liability risk.

How negligent hiring can affect employers 

The impact of a negligent hire on an organization can be significant: most employers lose these cases, with average settlements costing them $1 million. 

In addition to cost, a lawsuit can be a highly public dispute that results in bad press for a business or organization. This negative branding can affect everything from the company’s stock price to its public reputation to its ability to attract high-quality talent for future job openings. 

Avoiding allegations of negligence in employment decisions can save employers millions of dollars, protect their reputation, and steer them clear of potentially business-ending scandals. For all these reasons, thorough employee vetting is an essential step in the pre-hire process for all new hires, ranging from full-time employees to part-timers to volunteers and interns.