No Background Screening? Call Yourself 'Defendant' and 3 Myths of Background Checking

Every employer has a legal duty to exercise due diligence in hiring, says attorney Lester Rosen. What If you don't do background screening? According to a recent California survey, Rosen says, employers lose 60 percent of negligent hiring cases with verdicts averaging about $3 million, and average settlements around $500,000 plus attorney fees.

An employer can be sued for negligent hiring if it hires someone who it knew, or in the exercise of reasonable care should have known, was dangerous, unsafe, dishonest, or unfit for the particular job.

Courts tend to assume that if you could have known, you should have known, says Rosen. So how much checking should you do? The jury will tell you, Rosen says.

Rosen, who is CEO of Employment Screening Resources in Novato, California, made his remarks at the SHRM Employment Law and Legislative Conference, held recently in Washington, DC.

EEOC Implications of Criminal Records

The EEOC says that you cannot automatically disqualify an applicant based upon a criminal conviction without a business justification, taking into account the nature and gravity of the offense, nature of the job, and time elapsed, says Rosen.

Also, he says, be aware that some states and cities have "banned the box" to promote a second chance for convicted felons. (That is, they don't permit a question about criminal records on application forms.) Their focus is getting people back to work, Rosen says.

Yes, you too probably want to give people who have made mistakes a fair chance, but you also have to promote a safe workplace.

What about arrest records? Arrests are of limited use, Rosen says. You need to locate and evaluate underlying behaviors if possible.

Application Forms

It is critical, Rosen says, to specifically ask if the applicant has been convicted, or has pending charges (unless regulated by a "ban the box" rule). In addition:

•Use the broadest legal language about both felonies and misdemeanors. Don't leave out misdemeanors, Rosen says. Misdemeanors sound like petty crimes, but some serious crimes are misdemeanors, for example, some forms of assault or stalking.
•Mention on the application form that a criminal conviction does not automatically eliminate a candidate from consideration.
•Also state that any material lie or omission can constitute grounds to terminate hiring or employment.

Past Employment Checks Are Critical

Past employment checks are as critical as criminal checks, Rosen says. Verify employment to determine where a person has been (even if you only get dates and job title), says Rosen. Otherwise you are hiring a stranger.

Look for unexplained gaps in past employment. Search out locations of former employers so you know where to search for criminal records. (Remember, Rosen says, there are over 10,000 courthouses in U.S.; you need to know where to search.)

If you can verify that a person was gainfully employed in the last 5-10 years, it is less likely that he or she spent long periods in custody, Rosen says.

Be aware, he adds, that about 40 states (including NC) now provide some form of immunity for past employers giving good faith references. But even if you don't succeed in getting reference information, just attempting to and documenting the effort demonstrates due diligence.

Parting Shot

To indicate the kind of people you'll be dealing with if you don't do checks, Rosen told of the client who, when admitting his guilt for a murder, said, "but look at all the people I haven't killed."


The Three Due Diligence Myths of Background Screening

The biggest myth in background checking is that there is some grand online database to check and then you've done your due diligence. Not so, says attorney Lester Rosen.

Here are three of his myths:

Background Checks Myth 1. There is a national database available to private employers for checking criminal records or false credentials, such as education or employment.

Contrary to popular belief, there is no such national database, despite some advertisers claims to the contrary, says Rosen.
Furthermore, he says, FBI fingerprint checks are only available when mandated by law (e.g. for teachers and child care workers).
Unfortunately, he adds, the primary method for obtaining criminal records is to physically look at each relevant courthouse! And there are about 10,000 courthouses in America with court records in over 3,200 jurisdictions.

Beware of using commercial databases as a primary tool for records checks, Rosen cautions. There are substantial issues with accuracy, completeness, and timeliness, and false positives and false negatives are possible. They can be useful as a back-up or secondary tool. In some states, use is very limited (e.g., CA, NY & TX).

If you do get "hits" with such a system, the hit should be re-verified at the courthouse for accuracy and current status, he adds.

Background Checks Myth 2. Due diligence means perfection.

Unless set by a statute for your industry, Rosen says, due diligence is a moving target that is determined by a jury, based on evidence in the trial concerning injury, foreseeable risk, duty of care, and causation.

Nevertheless, to pass due diligence scrutiny, you just need to show that you did the best that you could be expected to do, not that you did a perfect investigation, Rosen says.

Naturally, he adds, high risk employers, such as firms that send workers into homes, will have a higher duty of care. Workers in uniform have the "color of authority," Rosen says.

If you haven't done due diligence, Rosen says, typical defenses won't help you. For example, don't try to claim that:

•A background check would not have revealed any red flags or lack of causation
•Conducting a check would have been too costly
•The applicant lied
•Others firms in our industry do not conduct background checks

Background Checks Myth 3. You can automatically disqualify an applicant based on a criminal conviction without a business justification.

You may not automatically deny employment based on a criminal conviction, says Rosen. The EEOC requires that you take into account the nature and gravity of the offense, nature of the job, and time elapsed.

However, if the person lied on the application, then the falsehood can be the grounds to deny employment.

Today's HR Daily Advisor Tip: Attorney Lester Rosen, Summarized and Edited for use in this blog.

The Whitford Group, TheWhitfordGroup, 704 298-2115