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 investigations and drug screens, as a way to ensure that it hires the most qualified candidates. Generally, an offer of employment is made contingent upon the applicant passing both of these requirements, and for good reason.
Check, Please
An employer can find itself in legal hot water for failing to conduct background investigations and/or drug testing before hiring employees. “Negligent hiring” is the legal doctrine that holds an employer liable where the employer failed 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, which would have led to the denial of employment had the employer known them.
Most states require pre-employment background checks for teachers, childcare providers, elder care providers and law enforcement. New York requires fingerprinting for certain jobs, including school district employees, employees assisting in the installation, servicing or maintenance of fire alarms, employees of any national securities association, private investigators and security guards and employees of detective agencies; and applicants to childcare centers or school-age child-care providers.
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 in order 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.
Case by Case
One Ohio case outlines the importance of a thorough pre-employment investigation. The case concerns a furniture rental company that hired a truck driver without any background investigation. The driver was hired to deliver furniture. While making a delivery with another employee to a customer’s home, the driver went back inside the home purportedly to use the customer’s phone to get directions for their next delivery while his co-worker waited outside. The driver went into 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 investigation, it would have discovered that the driver was fired from his prior employment after he refused a drug test and admitted to using drugs. The company also failed to interview his reference, the driver’s roommate, with whom he smoked crack the morning of the attack. Because the company 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 customer 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 which would have put the employer on notice that the offending employee was predisposed to commit a violent act. In another case 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 allegedly 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.
Taking Action
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.
However, 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/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 due to nondisclosure of the felony burglary conviction.
Conducting reference checks and contacting previous employers are also important tools for employers in the hiring process. While most employers provide minimal information for fear of defamation suits, such as dates of employment and salary, 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 where 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 reports. An employee can dispute inaccuracies if turned down for employment due to something in the report from the third-party company.
Concerns such as workplace violence, drug use, dishonest applicants and theft are good reasons for conducting background checks. In order to avoid many of the pitfalls discussed regarding pre-hire investigations, employers should:
* Know their state and local laws regarding the use of criminal background checks and pre-employment drug screening;
* Consider using a third-party background investigation company for completion of background checks;
* Establish pre-employment post-offer drug screening if it suits the organization, to be administered in a consistent, confidential manner;
* Review their employment application forms, and make sure they provide for disqualification of candidates and termination of current employees for providing false information discovered at any time;
* Review all applications from candidates carefully, noting gaps in
* Conduct reference checks; and
* Conduct a structured interview process that includes inquiry into any red flags from the employment application.
These steps are critical in hiring quality employees, maintaining a safe work environment, and bringing qualified employees into your organization. In order to develop a pre-hire checklist for your company, check with your state laws regarding the types of background investigations, including criminal records checks and pre-employment drug screens that are permitted in your state.
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