textfiles/reports/ACE/employee.txt

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          ARRoGANT                CoURiERS      WiTH     ESSaYS

Grade Level:       Type of Work           Subject/Topic is on:
 [ ]6-8                 [ ]Class Notes    [A report on negligent   ]
 [ ]9-10                [ ]Cliff Notes    [hiring and retention    ]
 [x]11-12               [x]Essay/Report   [laws.                   ]
 [x]College             [ ]Misc           [                        ]

 Dizzed: 07/94  # of Words:3,210  School: co-ed public   State: NY
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Negligent Hiring/Retention

    Human resources professionals have been breathing a bit easier because
of the retrenchment in the "At-Will" Employment Doctrine.(1) The repreive
was short lived, however, as a relatively new employee relations law
scourge has surfaced- The Tort doctrine of negligent hiring/retention.(2)

    Although this theory is not new, it's prominenece is growing. This
added cause of action in tort law is resulting in increased employer
liability and risk. Often, Court award outcomes in these cases are in the
hundreds of thousands of dollars, and more, and are likely to be upheld on
appeal.

    The limitations placed on human resources professionals and employers
relating to preemployment inquiries make an interesting contrast to the
negligent hiring dogma. Discrimination law, such as title VII of the civil
rights act of 1964, as written and/or interpreted by the courts, proscribes
many inquiries that have a negative employment-related impact on protected
classes of people.

    Plaintiffs also are asking the courts to curb employer access to
employee records and other personal information under the right to privacy
arguement, a constitutional arguement employing fourth amendment illegal
search and siezure guarantees. Human resources managers can be heard in
corporate hallways mumbling about these apparent conflicts and
incongriuties in common law and government mandate.

    Historically, If a worker commited a negligent act, a plaintiff often
would sue his or her employer under the theory of Respondeat Superior, or
let the master respond. (3) This doctrine holds the employer liable for his
or her employees' negligent, on the job actions and does not depend in any
way on the fault of the employer. (4) Common law held that employers owed
thier employees a duty to provide a safe place to work. Eventually, this
duty was extended to providing safe employees, because the courts reasoned
that a dangerous co-worker is comparable to a defective machine. (5)

    In the majority of successful negligent hiring/retention court cases
the nature of the relationship between customer plaintiff and business
defendant seems to drive the outcome. In cases in which plaintiffs have
recovered, there appears to be a higher degree of duty or care required
between business and it's customers because of the nature of the product or
service provided.

    Fundamental to a negligence action is the existence of a duty owed by
the defendant to the plaintiff ( See Bidar Vs. AM-FAC, Inc., 66Haw. 547,
551; 669 P. 2d 54, 158 {1983}.) A defendant owes a duty of care only to
those who are foreseeably endangered by the conduct and only with respect
to those risks or hazards whose likelihood made the conduct unreasonably
dangerous. ( See Hulsman vs. Hemmeter Development Corp., 65 Haw. 58, 68,
647 P. 2d 713, 720 { 1982}.)

    Therefore, duty under the negligent hiring theory depends on
forseeability, that is, "Whether the risk of harm from the dangerous
employee to a person...was reasonably forseeable as a result of
employment."( See Di Cosala vs. Kay, 91 N.J. 159, 450A. 2d at 516 {1982}.)
Some examples of a higher duty of care include Landlord/tenant
relationships, common carriers (railroads, airlines, ship lines),
hospitals, and other patient care facilities and taxi services.

    Often when a negligent hiring complaint is initiated a simultaneous
allegation is made of negligent retention. Negligent hiring allegations
imply a preliminary error in terms of the hiring process ( See Ponticas vs.
KMS Investments, 331 N.W. 2d, 907 {1983}.) This means that the employer
should have known before hiring an individual that the person was unfit for
employment. Negligent retention is an after-the-fact consideration (See
Cherry vs. Kelly services Inc., 2d 463 {1984}) applying to the instances in
which the employer becomes aware of the employee's unfitness after hiring
him or her. Here the employer has an obligation to initiate an action to
counter the person's unfitness, including retraining, reassignment,
rescheduling or discharge ( See Cutter vs. Farmington, 498 A. 2d 316{N.H.
1985}.) For example, in Abbot vs. Payne et al (57 So. 2d 1156 {Fla. App. 4
Dist. 1984}) a negligent hiring and employment allegation was at issue. The
focused action precipitating this case occured after the worker terminated
employment.

    The case involved a customer who contracted with the Apollo Termite &
Pest Control Co. to provide regular service in her home. Apollo assigned
the co-defendant employee, Randall Payne, to provide service in Abbot's
home. Abbot worked full time, so it was necessary for the pest control
company to have access to her home while she was away. Therefore the
company requested that Abbot provide a passkey. Because Payne would have
the key and, therefore, independant access to her home, Abbot sought and
obtained representations from the firm that Payne was reliable and
trustworthy, and the company was fully bonded. quently, based on assurances
from the company, the plaintiff allowed Payne to enter her home. Shortly
after his employment with Apollo ended, Payne used the passkey to break
into Abbot's home at night, and psysically assaulted her. The court found
in favor of Abbot, saying that liability for an ex-employees conduct can
occur, and that the employer has a duty to inquire into the background of a
job applicant, including past employment and references.

    In its opinion, The court cited William vs. Feather Sound Inc. ( 386 So
2d 1238, 1240 {Fla 2d DCA 1980} petition for review denied, 392 So. 2d 1374
{Fla 1981}) saying: If an employer wishes to give an employee the indicia
of authority to enter the living quarters of others, it has the
responsibility of first making the inquiry whether it is safe to do so. The
court reaffirmed the ( Williams ) opinion, indicating that when an employer
provides assurances to a customer, vouching for an employee's honesty,
reliability and trust, that employers responsibility ( And liability ) is
increased accordingly.

    In another case Salinas vs. Fort Worth Cab & Baggage Co. ( 725 S.W. 2d
701 { Tex 1987 }) the plaintiff Maria Salinas, was raped, sodomized and
robbed by a taxicab driver who accepted her as a fare. The driver had an
extensive criminal assault record, including rape and assault. The
plaintiff argued that this information should have been available to the
Ft. Worth Cab & Baggage Co. and that the employer should have known about
the employee's criminal record and made use of it before hiring him. The
defendant cab company admitted that it made no preemployment check of the
driver's background. The court held the business liable for negligent
hiring and retention of a violence prone employee who had willfully injured
others during the course of his employment.


Duty of Care Increases depending on Industry

    In C.K. Security systems vs. Hartford accident and Indemnity Co. ( 137
Ga. App. 1, 159, 223 S.E. 2d 453 {1976}), A Georgia court of appeal held
the employer to a higher duty when it investigated backgrounds of security
guard applicants.

    A guard provided by a sercurity service entered a client's business and
stole a blank check. After forging signatures on the check, he successfully
cashed it through the tenants bank. The Bank sued the security company
alleging negligent hiring.

    The security firm defended itself by saying that it had followed it's
usual pre-employment procedure and had contacted the individuals past
employers. The court denied summary judgement saying that because of the
nature of its business, the firm was required to exercise greater care (
I.E. Beyond what the firms usual practice entailed ) to ascertain whether
potential security guards possess specific characteristics, such as
honesty, that are required by the nature of the employment.

    The health care industry is another prime example in which duty of care
is increased in regard to hiring and employment. In Joiner vs. Mitchell
County Hospital Authority ( 125 Ga. App. 1, 186 S.E. 2d 307 {1971}, aff'd
229 Ga. 140, 189 S.E. 2d 412 {1972}) A negligent hiring claim involved the
alleged failure of a hospital's employment procedure in not requiring proof
of the physicians qualifications.

    The plaintiff's spouse was brought to the hospital complaining of chest
pains. A hospital physician examined the patient and released him saying
that the patients condition was not problematic. After arriving home, the
patient's pain intensified. On returning to the hospital the patient died.

    In her suit against the hospital, the wife claimed that the hospital
failed to require proof of the physician's professional qualifications and
that simply relying on the fact he was state licensed was not enough. The
Georgia appeals court agreed, saying that hospitals have an affirmative
duty to conduct independant investigations into a physician's professional
competence.

    Contrasting the negligent hiring issue is that of negligent retention.
In Pruitt vs. Pavelin ( 685 P. 2d 1347 { 1984}, a realtor hired an agent to
sell its real estate listings. Management knew of some of the indiscretions
and became aware of others on the part of its newly hired real estate agent
when employment was offered. These indiscretions included forging documents
for a former employer, a conviction for passing bad checks and lying about
obtaining a realty license. Despite knowledge of these matters, the realtor
vouched for the employee's character to the public. The court concluded
that the firm was liable for the consequences of it's agents misconduct
because most of the individual's past actions became known to the employer
after this person was hired.

    In a New Mexico case, Valdez vs. Warner ( 742 P. 2d 517 { N.M. App.
1987}), a bar employee assaulted a patron, Victor A. Valdez, In the parking
lot of his employer and his co-defendant Z&E Inc. The plaintiff brought
actions.

    The court of appeals accepted evidence that the " defendant previously
physically assaulted the son of the owner of the (Co) defendant bar, and at
one point he was banned from the bar for fighting, and that while working
as a bouncer in the same bar he was involved in other physical
alterations." Even with knowledge gleaned before he was hired and
subsequent knowledge gained after employment, the defendant was retained.
The court found " There was evidence.... that the owner of the bar was
negligent in Hiring Warner with his background of violent behavior..."

    An additional twist to this case was the plaintiffs request for
punitive damages. The courts response to this request was that " Recovery
of punitive damages is permissible if the jury finds the wrongdoers conduct
to be willful, wanton, malicious, reckless, oppresive or grossly
negligent..."

    The court added that " Gross negligence is a sound basis for award of
punitive damages." The case was remanded to a lower court with instructions
saying that if a jury found, based on the evidence, That Z&E Inc. was
guilty of gross negligence, than punitive damages would be appropriate.

    Courts that have heard and ruled on negligent hiring/retention charges
have indicated that employers are responsible to thoroughly investigate the
backgrounds of the applicants.

    Employers generally are viewed by courts as being accountable for
thier ( Negligent ) actions, if:

 * A Link can be established between employee actions and third-party injury.

 * Information concerning the employees unfitness, instability, or
unsuitability for a job was available before hiring or became available
after hiring.

 * It can be established that such information is or was used to make a
decision thereby taking the public out of harms way.

If these criteria are met, the level of care demanded from an employer is
higher ( 6 )

Extensive state and Federal legislation and executive orders exist
concerning equal employment opportunity EEO that directly affects business
employment practices. Most statutory legislation and federal executive
orders are designed to prohibit employment discrimination based on race,
color, national origin, gender, age, and handicap. Title VII the hallmark
statute in this field of law, addresses illegal discrimination in three
areas: Intentional discrimination, Disparate impact, and Disparate
treatment. The most controversial of these is Disparate impact.

The landmark US Supreme court case Griggs vs. Duke Power ( 401 U.S. 424 {
1971 } ) interpreted disparate impact as any nuetral employment practice
that adversly affects a protected class of people ( e.g. Blacks, women and
so on). The court stipulated that discrimination could be practiced legally
only: 1) If a  manifest relationship could be established between
employment requirement and employee job performance; 2) In the event of
safety considerations ( See New York City Transit Authority vs. Beazer 19
FEP Cases { 1979}); or 3) for a so called business necessity. ( 7 )

Examples of adverse impact theories include:
 * Requiring a job applicant to meet minimum height and weight
specifications ( CFR 1607 { 1976})

 * Using arrest and conviction records in selection ( See Green vs. Missouri
Pacific Railroad Co., 523 F. 2d 1290, 10 FEP Cases 1409 )

 * Applying a rigid clean-record policy as part of an employment procedure (
See EEOC decision no. 71-797) ourts hearing cases alleging disparate impact
that focus on employment policies and practices are neutral but
discriminatory in effects. Courts, however, look at consequences rather
than motive, effect rather than purpose. (8)

PLAINTIFFS USUALLY PREVAIL IN THESE ACTIONS

    It is important to note that plaintiff successes far outweigh
successful defenses in negligent hiring/retention actions. There are some
avenues of defense, however, that should be addressed. These include: STATE
LEGISLATIVE RESTRICTIONS. Many states have passed laws that limit employer
access to certain personal background information of a job applicant. A
prime example are laws that restrict access to criminal conviction records.
Typically, state laws only allow the use of criminal conviction information
if there is a direct relationship between  the crime for which the job
applicant was convicted and the job for which the person applied. ( See
Guillermo vs, Brennan, 691 F. Supp. 1151 {N.D. Ill. 1988}.) In this
example, a person who was convicted of theft was applying for a job as a
laborer ( who would have no contact with anything of significant monetary
value). Using the person's conviction record would not be appropriate in
considering him for employment. LABOR CONTRACT If an employer is bound by
contract to follow a procedure for employing persons and the employer
follows the contract, his or her exposure to actions could and probably
would be reduced. PROPER NEXUS IN CAUSATION To prove a case of negligent
hiring/retention effectively, the accuser must show that information about
the wrongdoer was available before or after hiring and was directly related
to the injuries he or she suffered as a result of the individual hired by
the employer.

    Many Human resources managers have interpreted the Supreme Courts
Griggs EEO Opinion too narrowly. These supervisors might conclude that the
manifest relationship needed to argue in favor of a business necessity
exception in using a particular employment qualification is nearly
impossible to attain. As such, the overly awed human resources professional
might ignore the need to incorporate certain job requirements into a job
description, fearing an EEO charge alleging dispararte impact. These
managers, however, must look at each job and the effective and safe
performance of that job, and then compare performance to equivalent and
required job specifications. effective and safe job performance includes
reducing unnecessary public risks when making employment decisions. If
there is a Bona Fida need to affect a protected class adversly so that a
particular job may be performed effectively and safely, claim the business
necessity exception. By Ignoring such exceptions, the human resources
manager may be increasing his or her exposure to negligent hiring/retention
claims.

    Prudent human resources professionals also must address the need of
awareness and understanding associated with the legal theory og negligent
hiring/retention. They should balance this area of the law with equal
employment mandates and privacy considerations and develop basic pre- and
post- employment policies and practices. The EEO exceptions allowed under
business necessity should be persued aggressively whenever appropriate.
Place particular emphasis on the pre-employment stage, and management
should adhere consistently to prudent preemployment procedures. Some
guidelines are available that may help derive complete background
information about job applicants. Although they are not new, some of these
proposals are controversial and thier use should be governed by an
employer's need for certain information, state and federal laws ( e.g.
criminal convictions information ).

1) Require all job applicants to complete an employment application form
that meets federal, state, and local employment related laws. Also require
applicants to sign the application form, signifying that all the
information provided is truthful and accurate. (10) As part of the
application process obtain the job seeker's written agreement to perform a
background check (11). In addition to basic information (name, address,
education and employment history), employers who can show a definitive need
for facts regarding criminal convictions should require this information as
well. Remember, If a higher degree of care is required between a business
and it's customers and if potential harm to the customer ( or any third
party) is foreseeable, the companies liability automatically is greater.
Also request and obtain copies of any professional license or degrees an
applicant claims to have.

2) Conduct a nondiscriminatory job interview using the completed
application to clarify and confirm information supplied by the applicant.
The interview also provides an opportunity for an employer to determine
whether an applicant is fit for the job which he or she applied. Use this
opportunity to pursue and resolve any doubts about the applicant .
Empolyers who do not conduct a job interview follow a hit and miss
employment philosophy.

3) Check the applicant's employment references so that information supplied
by the applicant can be confirmed. Base the inquiry on the job applied for.
(13) Many of the cases previously discussed address the need to obtain
references. None of the cases however, touvch on the problems employers
encounter when they try to obtain employment references from past
employers. Typically, the employer attempting to obtain a reference is
concerned about invading the applicants privacy. Previous employers are
often guarded in thier comments - for fear of a potential libel suit being
filed by the former employee. Many past employers refuse to provide
information and simply say " No Comment. " Even if the human resources
professional is unable to secure information from previous employers, at
least the record is established that an attempt was made to obtain these
references.

4) For high-risk, Medical-related occupations and job openings that require
extensive physical exertion, a medical history request and a pre-employment
physical examination, including a drug and alcohol test should be required
as well. Inquire as to the applicants past and present medical and physical
conditions, including illnesses, injuries or other conditions that could
impair safe and effective job performance.

5) All sources of information should be documented in writing whenever
possible, including the results of job interviews. Many cases hinge on
being able to produce a written document in court. These strategies should
help human resources managers obtain much of the information needed to make
employment decisions that result in hiring safe and capable employees.
These guidlines also serve to reduce exposure to negligent hiring/retention
claims, thus minimizing EEO Challenges.

Footnotes
1- See in general, the following sources for background about the "
at-will" employment doctrine: Fenton, J., and Timmins, S., " the at will
Employment doctrine: Implications and recomendations for the small business
firm," Journal of small business management, Jan 1982, p32 ;Hames, D., "
the current status of employment-at will," Labor law journal. Jan 1988,
pp19-32; Greylin, M., " Fired Managers winning more lawsuits," The wall
street journal 7 Sep 1989 page b-1.

2- Fenton, J., " the negligent hiring and retention doctrine," Nursing
Management Sep 1989, p28.

3- Restatement ( Second), Agency 219 (1957).

4- Brill, R. L., " The liability of an employer for the willfull torts of
his servants," Chi-Kent, Law Review. Jan 1968. See also Reibstien, L., "
Firms facing lawsuits for hiring people who then commit crimes," The wall
street journal april 30, 1987 p.19.

5-North, J.C., " The responsibility of Employers for the action of thier
employees: The negligent hiring theory of Liability," Chi-Kent Law review.
February 1970 p.719.

6- Gregory, D., " Reducing the risk of negligence in hiring," Employee
relations law journal. Summer 1988, p34.

7- In addition to the business necessity exception are section 703
exceptions called Bona Fida occupational qualifications (BFOQ). These
narrowly construed exceptions encompass those instances in which legal
discrimination based on gender, religion, or national origin ( But Never
race) are practiced and are reasonably necessary to the usual operation of
a particular job or enterprise.

8- Blumrosen, H., " Strangers in Paradise: Griggs vs. Duke Power Co. and
the concept of Employment Discrimination," Michigan Law Review, 1972.

9- See, In general, " Employer Liability for the criminal acts of employees
under negligent hiring theory: Ponticas vs. K.M.S. Investments," Minnesota
Law Review. 1303 (1984)

10- Not following this basic procedure could imply employee negligence. See
Weiss vs. Furniture in the raw, 62 Misc. 2d 283, 306 N.Y.S. 2d 253 ( N.Y.
Civ. Ct. 1969).

11- Gregory, D., Op. cit., P.40.

12- Jacobs, R., " Defamation and Negligence in the Workplace," Labor Law
Review. Sep 1989 p.52.

13 Ibid.