JSH Reporter Summer 2014 - Page 17

BACKGROUNDCHECKSARTICLE 017 The first step in avoiding liability for negligent hiring is to understand the elements of the claim. To prevail on a negligent hiring claim, a plaintiff must show that: (1) an employment relationship existed, (2) the employee was unfit for the position, (3) the employer knew or should have known the employee was unfit, (4) the employee negligently or intentionally caused the injury, and (5) the employee’s conduct proximately caused the injury.3 Regarding the first element -- employment relationship – employers cannot assume they can escape liability through artful contract language or independent contractor relationships.4 Courts will look at the totality of the facts when determining employment status rather than simply reviewing the language of an employment contract. Second, when determining if an employee is unfit, courts will examine both the nature of the position and the risk the employee posed to those with whom he came in contact.5 A job applicant cannot be deemed unfit solely because of a criminal conviction.6 The third element -- requiring an employer to have knowledge that the employee was unfit – can be satisfied by showing that the employer should have discovered information showing the employee was unfit.7 For instance, in the example of the apartment owner above, the owner should have discovered the handyman’s history of violent crimes by simply checking his references and performing a public information search. Under the fourth element – the employee’s tortious conduct -- an employer is liable only for an employee’s torts. Therefore, if the employee’s actions were not negligent or intentional, a claim for negligent hiring would fail.8 Finally, on the issue of proximate cause, a plaintiff must show that the injuries were caused by a characteristic of the employee which the employer knew might cause harm.9 While applicants with criminal records are legally barred from holding certain positions, there are many others for which they still may be hired. To comply with federal law, a policy cannot blindly reject candidates based on their criminal record. For instance, as arrest and incarceration rates for African Americans and Hispanics exceed those of the general population,1 a hiring policy that rejects any applicant with a criminal history might have a disparate impact on those two protected classes and might violate Title VII of the Civil Rights Act of 1964. Liability can be minimized by fully researching an employee’s criminal background and applying that information to the standards set forth under a properly developed hiring policy. An employer should develop a hiring policy that relies on factors that are job-related. In order to show that an exclusion based on criminal history is a business necessity, the employer must take into account: (1) the nature and gravity of the offense, (2) the time that has passed since the conviction or completion of the sentence and (3) the nature of the job sought.10 Even if a hiring policy does have a disparate impact on a protected group, it might still be legally valid if the requirement is job-related and consistent with business necessity.11 For instance, employees of Company A process credit card information. Therefore, during its hiring process, Company A screens applicants for convictions involving credit card fraud. However, employees of Company B do not have access to customer credit card information. In fact, Company B provides landscaping services and its landscapers do not collect customer payments. As such, Company B would have a difficult time arguing that credit card fraud convictions are related to a business necessity. Thus, while both of the processes for screening applicants can result in a disparate impact on a protected group, only Company A’s policy meets the business necessity requirement. In the above example, Company A considered “conviction” records rather than “arrest” records. An arrest does not necessarily establish that a criminal act has been committed. In fact, many arrests do not result in criminal charges, or the charges are dismissed for a variety “TO COMPLY WITH FEDERAL LAW, A POLICY CANNOT BLINDLY REJECT CANDIDATES BASED ON THEIR CRIMINAL RECORD.”