What's Negligent Hiring?

by Paul W. Barada

One of the newest and most important areas of litigation in the human resources field is negligent hiring. In a nutshell, negligent hiring is the failure to use reasonable care in the employment selection process. And the key, of course, is the phrase "reasonable care" and the consequences for failing to use it!

Generally speaking, reasonable care is the level of care that a reasonably prudent person would exercise under the circumstances. Hmm. We are clearly teetering perilously close to using what lawyers sometimes call words of art.

The most important thing to remember is that negligent hiring has more to do with the failure to exercise reasonable care in the hiring process than anything else does. What constitutes reasonable care depends on the type of position being filled and the degree of harm to others that could result from the failure to use reasonable care.

Suppose you're hiring a janitor. Reasonable care might be demonstrated by showing that previous employment had been confirmed and other pertinent information on the job application had been verified prior to making a job offer. Now suppose you're hiring a brain surgeon. Would you have demonstrated reasonable care by doing the same thing? Obviously not. Why? Because the risk of harm to others would be far greater for the brain surgeon than janitor. Therefore, a company that employs brain surgeons will be held to a higher standard to show that reasonable care was used in the selection process than one that employs custodians.

It is possible for all of this to become complicated and fall into the morass of legalese if we're not careful. For instance, most HR professionals know that the truth is an absolute defense when it comes to providing information to

a prospective employer. If an employee was fired for stealing, and it's true, there's no danger in saying so. Far too many companies take the stance that saying nothing is better than being honest about former employees, resulting in bad apples continuing to be passed from employer to employer. But what does the truth have to do with negligent hiring? From a legal standpoint, an employer could be held liable for negligent hiring if he "knew or should have known" the information provided about a candidate was false and, as a result, a fellow employee or other innocent third party was harmed in some way.

So, what can employers do to show that reasonable care was used in the hiring process? Happily, there is an easy and sensible answer if employers take the time to use it. All that is required is thoroughly checking references and

verifying all other pertinent information about each candidate prior to making a job offer. Employers should talk with a minimum of three business or professional references, people with whom the candidate has actually worked on a daily basis within the last five to seven years. Employers should also verify all degrees claimed and licenses allegedly conferred. By taking these steps, every employer should be able to clearly show that reasonable care was used in the hiring process. More importantly, it would be extremely difficult for anyone to argue that the employer knew or should have known that the information received was false if multiple references were contacted and credentials verified. It is difficult to imagine any judge or jury finding that an employer had been negligent in its hiring processes if this standard of care were exercised prior to every hiring decision.

More from the Courts:

Negligent Referrals

An interesting twist on the whole notion of negligent hiring: negligent referral. And more and more states are recognizing it. Here's how it can occur:

Suppose employer A wants an employee to leave because of poor performance or violent tendencies. Then suppose employer B calls employer A for a reference on the employee, because he has applied for a job. Employer A then provides either minimal information about the employee or gives a positive reference. So employer B hires the employee who subsequently injures someone in his new position. Not only could employer B end up in court for negligent hiring, employer A could also find itself in court defending a negligent referral claim brought by employer B.

The Supreme Court of California recently recognized that employers have some duty to other employers to not misrepresent the facts when describing the qualifications and character of a former employee, if making the representations would present a substantial, foreseeable risk of harm to innocent third parties. So, saying nothing or providing a good reference for a bad employee could be far riskier than simply telling the truth.

For more information on this emerging trend, see "Negligent Referral: A Potential Theory for Employer Liability," Southern California Law Review 64(Sept. 1991): 1645 and Jerner v. Allstate Insurance Co., 193 Daily Labor Report (BNA)D17 (Fla. Cir. Ct. 1995).