How to Avoid the Employee From Hell - Legally!
by Barry J. Nadell

The "employee from hell" is easy to identify after the fact. An Oakland civil jury awarded over $11 million to a woman’s husband after she was murdered by a man who came to clean their carpets. Under the legal doctrine of negligent hiring Americas Best Carpet Care was ordered to pay over $9 million of the award despite their defense that the perpetrator was an independent contractor and not an employee. This is a hellish scenario for any human resources professional!

As President and co-founder of InfoLink Screening Services, Inc., I have a front row seat on the trends shaping Americas hiring practices. On the one hand, I see the Internet progress we have made; increasing the speed and convenience of screening services, while lowering the cost. On the other hand, I see workplace trends that are making hiring more difficult and the need for screening more acute than ever. “To screen or not to screen?” is a crucial question affecting several areas of your business.

HIRING:

The current extremely low unemployment rate makes finding qualified employees more difficult than usual and may tempt employers to speed hiring decisions with shortcuts. When someone perceived as the right applicant comes along, you may want to act quickly before someone else hires them, or you may want to avoid alienating the prospect with the disclosures and possible delays of a thorough screening process.

As an employer myself I believe its a top priority to ascertain an applicants honesty in presenting himself, or herself. The major purpose of screening is to verify that the information submitted by the applicant is indeed a fair and correct history. Sometimes the person who seems too good to be true is exactly that! A survey published by the Society of Human Resource Management in 1998 gave the following results for resumes and job applications where falsification had been detected:
• Length of employment 53%
• Past salaries 51%
• Criminal records 45%
• Former job titles 44%
• Former employers 35%
• Driving records 33%
• Degrees 30%
• Credit 24%
• Schools attended 24%
• Social security number 14%

It still amazes me when InfoLink, as an employer, finds the perfect person for a position only to discover through our own screening process that the person was not all they seemed to be. How could someone applying for a position at a screening company attempt to materially misrepresent himself or herself, or fail to disclose vital information requested on the application? Yet, it continues to happen. One such applicant was found to have a current arrest warrant outstanding for a drug violation! Another had a serious misdemeanor conviction which had not been disclosed.

If these sorts of incidents can happen to us in the screening industry, then I am confident they can happen to you as well. Remember that you are not only assessing the possible contributions of an applicant, but their potential employee costs in terms of low morale, lateness, absenteeism, accidents, insurance claims and turnover as well as possible theft, violence or lawsuits.

SECURITY:

In the past, sensitive positions in security or law enforcement, finance and health care were most often professionally screened. However, current social trends such as drug abuse and workplace violence have shown a need for broader screening processes. Department of Labor statistics show, surprisingly, that 73% of all current drug users age 18 or older are employed, with over 80% employed full-time. Businesses without a drug-screening program are naturally more likely to hire such individuals and to suffer the hidden costs associated with them. A U. S. Postal Service study indicated that employees who tested positive on their pre-employment drug test were 77% more likely to be discharged within the first three years of employment and were absent from work 66% more often than those that tested negative.

As previously noted, jobs with access to customers homes are particularly susceptible to abuse by unethical or criminal employees and can create huge legal liabilities. However, screening can help with lesser problems as well. One InfoLink subscriber reports occasional instances when its employees have been accused of theft, sometimes as a distraction by the real thief. In addressing such claims, the employer finds it worthwhile to disclose that its employees have undergone extensive background screening a much more thorough check than is given to the typical domestic worker!

LEGAL:

An overlooked, but a most important reason for screening is lawsuits. Corporations are increasingly held legally responsible for the types of individuals they hire, especially if those individuals engage in criminal activity.

Examples of a dire nature are, unfortunately, not difficult to find. PDQuick recently made headlines in Los Angeles when one of its home delivery drivers; two weeks on the job, allegedly committed sexual assault on a San Gabriel woman as well as attacking two other women. PDQuick had failed to check the criminal history of the employee who, unknown to them, was on parole for a violent conviction.

In another recent instance, a home health care provider in Massachusetts named Trusted Health Resources unknowingly hired someone with a criminal record as a home attendant. That individual subsequently murdered a young paraplegic man placed under his care as well as the patients grandmother, apparently to cover up a theft. When the employee was later tried and convicted of the crime, the victims family sued the company on the basis of negligent hiring and obtained damages of $26.5 million dollars. Not surprisingly, Trusted Health is no longer in business.

In addition to these high-profile cases, there is also danger from lawsuits incurred due to noncompliance with Federal and state laws governing background check procedures. Non-compliance with these laws is fairly common. Even among companies that have previously used a background screening service, about 75% of the employers I see have language (or are missing language) in their documents that violates either Federal or state law. When choosing a background screening company to hire, I often recommend analyzing the documentation provided by that company for legal compliance. If the documentation violates state or FCRA law, its a serious problem. How can one trust a company’s reporting procedures when their documentation and procedures do not even conform to the applicable laws of their industry?

SCREENING PITFALLS:

While the above examples show the need for increased scrutiny, the difficulty in detecting unflattering backgrounds has also increased:
• When employers conduct reference checks, they are increasingly met with a limited or nonexistent response as legal concerns make former employers reluctant to provide anything more than a confirmation of name, job title and dates of employment.
• Workers with imperfect backgrounds often gravitate towards working as temps, either out of necessity, or as a means of masking their histories. Employers hiring a temporary worker through an agency may not feel the need to conduct the normal background check, but the company is nevertheless considered a co-employer for liability purposes and is liable along with the agency.

THE SOLUTION:

The way to avoid hiring the employee from hell for most companies is a background check by a professional screening company which complies with the applicable legal procedures. These checks typically include criminal history search, motor vehicle report information and a social security number trace. The importance of criminal checks is self-evident, but the others may not be so clear. A motor vehicle report discloses convictions for DUI (Driving Under the Influence), drug possession and failures to appear. In addition, current arrest warrants may be found. Social Security checks help identify false numbers and identities used by an applicant to evade screening of their own personal history.
Other frequently performed checks include:

• References
• Verification of education, licenses, or military service records.
• Credit checks or searches for liens and judgments which help indicate character
• Worker compensation filings which can identify past employers not revealed on an application

Turnaround times for these checks range from the immediate (with online access to credit and other up-to-date databases) to generally two or three working days, depending on the type and extent of search desired. Fees are surprisingly low and can range from $3, up to $50-80 depending on several factors: the package of searches required for a particular position, the number of references contacted and the number of counties searched for criminal activity. It is important for a business to have a screening program appropriate to the type of personnel that they are hiring and to design searches based upon job requirements. As an example, you should not perform a credit check on someone who couldn’t affect you financially, but should always require one for someone in accounting, or who handles money.

If an employer relies on any third party such as a private investigator, public record provider or professional screening service (all considered consumer reporting agencies under Federal law) for references or a more involved background screening, there are a number of additional requirements that must be met. These include legal disclosure and adverse action procedures that must be followed as required by both the Fair Credit Reporting Act and applicable state laws. Because of the complexity of both Federal and state laws, a professional service should be engaged to provide the appropriate documents and expertise to set up such a program. An effective one shields the company from needless lawsuits and promotes morale by screening out the employee from hell.