Inquire Before You Hire

The decision to hire an employee is one of the most difficult, yet integral, parts of running a successful business. Whether it is a Fortune 500 company or the mom-and-pop store on the corner, no one can put a price tag on the value of a good employee. In addition to a well-planned interview process, many states permit employers to conduct pre-employment background checks and drug screens as a way to ensure they hire the most qualified candidates. In the case of the information management industry, an offer of employment often is made contingent upon the applicant passing both of these requirements, and for good reason.

An employer can find itself in legal hot water for failing to conduct background checks and/or drug testing before hiring employees. "Negligent hiring" is the legal doctrine that holds an employer liable when it fails to conduct a thorough investigation of a new employee, resulting in damage or injury to a third party. The primary issue in such a case is whether the employer knew or should have known of the employee’s criminal propensities. The key is whether facts existed that the employer should have known about that would have led to the denial of employment.

Most states have enacted statutes that authorize pre-employment, post-offer drug screening in conjunction with drug-free workplace programs. Many of these programs are required to receive significant workers’ compensation discounts. Generally, employers may decline to hire an applicant for a positive test or a refusal to provide a testing sample. Most states require that the applicant be given notice of the testing requirement at the time of making application, and results are to be kept confidential. Connecticut, like many other states, has mandatory testing requirements for certain types of jobs, such as school bus drivers and commercial drivers as required by federal law. Maine only permits pre-hire drug testing for employers with 20 or more employees who have a state-certified Employee Assistance Program in place and a detailed written testing policy. Only Kentucky, Michigan, Nevada, New York, Pennsylvania, Washington and Wisconsin have no pre-employment drug testing laws in place for private employers.

One Ohio case outlines the importance of a thorough pre-employment investigation. In Stephens v. A-Able Rents Co., A-Able Rents Co., a furniture rental company, hired a delivery truck driver without conducting a background investigation. While making a delivery with another employee to a customer’s home, the driver went back inside the home purportedly to use the homeowner’s phone to get directions to the next delivery while his co-worker waited outside. The driver went into the customer’s home and assaulted her. He later admitted to smoking crack cocaine the day before and the morning of the violent attack.

Had the employer conducted a proper background check, it would have discovered that the driver was fired from his prior job after he refused a drug test and admitted to using drugs. The company also failed to interview the driver’s reference, his roommate, with whom he smoked crack the morning of the attack. Because A-Able Rents Co. did not have a procedure for investigating applicants, it also failed to note a job discrepancy in which the driver claimed he worked in Cleveland and Tulsa, Okla., during the same three-year period. Finally, the company did not drug test its drivers. The plaintiff won $3.5 million dollars as a result of the company’s negligence.

Employers can prevail on negligent hiring claims if the victim is unable to prove that the employer failed to perform an adequate background check that would have put the employer on notice that the offending employee was predisposed to commit a violent or criminal act. For instance, in Saine v. Comcast Cablevision of Arkansas Inc., the employer provided documentation that the offending employee, a cable installer, had passed a pre-employment drug screen and had been honorably discharged from the military. His background check revealed experience in the industry, and reference checks with two prior employers showed no indication of potential risk to customers. Since the victim, who was raped and nearly killed by the cable installer, could not demonstrate that there was something in the installer’s background that would have alerted his employer to the possibility that he was predisposed to commit sexual assault, her claim for negligent hiring failed.

Getting back to basics, in addition to pre-employment background checks and drug screens, much can be revealed by a thorough review of an employment application followed up by pointed interview questions. Alabama, Arkansas, Arizona, Indiana, Mississippi, North Carolina, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Vermont, West Virginia and Wyoming have no restrictions regarding inquiry of employees or applicants about arrests or convictions. Many states permit inquiry into arrests and convictions, with the exception of sealed records.

The Equal Employment Opportunity Commission (EEOC) has set forth a Policy Statement with the requisite considerations for "business necessity" as a justification for use of a conviction record to deny employment. An employer must show that it considered three factors to determine whether its decision was justified by business necessity: (a.) the nature and gravity of the offense or offenses, (b.) the time that lapsed since the conviction/completion of sentence; and (c.) the nature of the job held or sought. These factors can all be learned through the pre-hire screening process of the application, background check and interview.

Most employers use job applications that have language that provides for the disqualification of a candidate or termination of an employee if it is discovered at any time that he or she provided false information on the job application. For example, a fast-food chain hired a manager in a safety-sensitive position without conducting a background check. It was not until a subsequent harassment investigation that it was discovered that the manager had a felony burglary conviction that he failed to disclose on his employment application. While the employee was cleared of the harassment charge, he was later terminated for falsification of his employment application in light of nondisclosure of the felony burglary conviction.

Conducting reference checks and contacting previous employers also are important tools for employers in the hiring process. While most employers provide minimal information, such as dates of employment and salary, for fear of defamation suits, others are willing to provide a telling response to the question "Would you re-hire this applicant if given the chance?"

Employers can conduct their own background checks, but should be wary of Web sites and public records searches in which information can be missing or inaccurately reported. More often, employers hire a third-party screening company to assist with background checks. These types of investigations are subject to the Fair Credit Reporting Act as an investigative consumer report. An employee can dispute inaccuracies if turned down for employment in light of something in the report provided by the third-party company.

Concerns such as workplace violence, drug use, dishonest applicants and theft are good reasons for conducting background checks. To avoid many of the pitfalls regarding pre-hire investigations, employers should:

Each of these steps is critical in hiring quality employees, maintaining a safe work environment and bringing qualified employees into your
company.

The author is an attorney with Cleveland-based law firm Mansour, Gavin, Gerlack and Manos, online at www.mggmlpa.com. She has administrative and litigation experience in all aspects of public and private sector labor and employment law.