— When a door-to-door magazine salesman killed a 66-year-old woman, his employers said they weren't responsible because they didn't know about his criminal record for assault. Is it enough for companies to claim ignorance to avoid liability?
Courts are increasingly taking the stance it is not, according to lawyers and corporate security professionals. They say the justice system is holding companies accountable for what their employees do, if they commit a crime while in their role as an employee.
In the case of the door-to-door salesman, who pleaded guilty to murder, days before the murdered woman's family was to bring a lawsuit to court against the two companies involved, the firms reached a settlement for "a substantial amount," said Chris Coffey, the family's lawyer.
But now magazine subscription processor American Community Services, based in Michigan City, Ind., is facing another suit, also brought by Coffey's firm.
In the latest case, the subscription processor and The In Crowd, the Indiana-based firm that hires the door-to-door salespeople, are accused of liability in the alleged rape of a young mother by a man who, according to the suit, was hired despite having been convicted of aggravated assault in Cook County, Ill.
According to the suit, filed in Rutherford, Tenn., County Circuit Court, a background check was done on the man, but he was hired anyway.
Mike Bergerson, a lawyer for American Community Services, said the company has severed its relationship with The In Crowd, which was formed after the original firm in the cases, called The Real Deal, was dissolved. But Bergerson argued American Community Services never had anything to do with the hiring practices of the companies that sold the subscriptions.
"All we did was process the magazine subscriptions that they sold," he said. "We certainly are concerned about the events that led up to this, but I don't know if it is really the responsibility of American Community Services."
At the heart of the cases is the question of whether companies could, should or did know an employee might have had a proclivity to commit a certain kind of crime, and if so, whether the employee was put in a position providing the opportunity to commit that crime.
A decade ago it was extremely difficult to do a thorough criminal background check on a job applicant. But now that most criminal records across the country are accessible via the Internet, the process has become much simpler and costs have dropped precipitously.
"It has never been easier or less expensive to do a basic background check," said James Lee, marketing director of ChoicePoint in Atlanta, which does 8 million background checks a year. "Are you who you claim to be? All the bad things that can happen to you as an employer can be mitigated by knowing that."
"It's scary simple," suggested Timothy Dimoff, president of Akron, Ohio-based SACS Consulting & Investigative Services, Inc., and a retired law enforcement detective. "[C]ourts are recognizing that it's not hard to check out. … The solution is there. If you want to go back and say they didn't have time to check on an applicant's background, they didn't know the technology existed — the courts are eating them up."
Bergeron agreed the evolving technology has brought about a change in what the courts have held companies liable for.
"There have been evolving standards and guidelines," he said. "Ten years ago or more, background checks were hardly ever done, even for people like teachers or school bus drivers. I think now that it is more available, that likely they will be done more often."
Larger Companies on the Lookout
Most larger companies have recognized the need to do thorough screening of job applicants, according to a survey of Fortune 1000 company security directors released by Pinkerton Consulting and Investigations of Charlotte, N.C., last month.
According to the survey, the overwhelming majority of Fortune 1000 companies do criminal record checks and verify applicants' former employment. However, employee selection and screening ranked only No. 4 on their list of top security concerns.
But given the potential for liability claims from negligent hiring lawsuits, security experts say screening should be on top of the list, and there is no excuse for not looking into an applicant's background.
The problem is not just related to how employees interact with customers. And it is not something companies can forget once a person is hired. Firms can be held liable for one employee's sexual harassment of another, for example, if there is a pattern of behavior that should have been picked up on.
On the Rise?
Representatives of some companies that provide screening services for employers said there has been a rise in the number of negligent hiring suits over the last six or seven years, leading more and more companies to take stricter measures.
"It's the new darling of the lawyers who want to make money off corporations," said Carl King, the president of Insights Corporate Selection Systems, Inc., in The Woodlands, Texas, "If an employee does something bad, then maybe the employer's responsible."
There are no statistics for how many such suits there have been or what the average award has been, though some experts put the figure at $750,000.
Darrell VanDeusen, a lawyer with Kollman and Saucier, P.A., in Baltimore and the author of Labor and Employment Law, said he thinks there actually may have been more negligent hiring suits in the 1980s, but he agrees more companies than ever before are taking harder looks the past of the people they are hiring.
"The fear of these cases has led employers to think of new ways to look into who they are hiring," VanDeusen said.
Others said that after the Sept. 11, 2001, terrorist attacks and several high-profile workplace shootings, employers are naturally becoming more concerned about on-the-job security. Doing stringent background checks on applicants makes sense as a way to keep staff feeling secure, they said.
"Post 9/11 had something to do with it," said Bill Overhulser, the general manager of Information Architects of Lutz, Fla., which provides companies with employee screening services. "Previous to that, a lot of companies didn't want to invest the time in this until they were actually sued for something an employee did."
Checking on a job applicant's criminal record, though, is not the only method employers are using to protect themselves against potential problems.
Some are turning to credit checks to see whether applicants are telling the truth about such things as where they lived and their dates of employment. But lawyers say there can be problems if companies make a hiring decision based on an applicant's financial history.
The federal Fair Credit Reporting Act lists the purposes for which a company can obtain a credit report, and lays down the requirements that must be met for a company to request a report. The company requesting one must receive authorization, must tell the applicant which credit reporting agency was used and must inform the applicant of his or her rights under the FCRA.
"Employers need to check with counsel to make sure that they are following the FCRA," said New York-based attorney Katharine Parker, a partner in labor and employment law with Proskauer Rose.
The danger is an employer who looks at a credit report might be tempted not to hire someone with a bad record. But unless the job being applied for requires skill or responsibility handling money, a person's financial history cannot be grounds for denying them a job, lawyers say.
While there are very real privacy issues to be considered when turning to a credit report, King said he recommends his clients run one on applicants, if only for hard information to compare with what applicants say about where they worked and when they worked there.
"If there is something an applicant wants to cover up, that's the period he'll lie about," King said. "He won't say he worked at XYZ Corp., but with a credit check you can find out that he did. Then you can ask, 'What happened here?'"
Validity of Integrity
Another tool gaining in popularity is so-called integrity testing, in which applicants are asked a series of questions designed to measure their honesty.
The tests use control or validity questions to attempt to determine whether an applicant is responding honestly.
For example, if an applicant answers "I never get angry," or "I always help my co-workers," you know their answers to other questions are likely to be unreliable, said Florida International University psychology professor Vish Viswevaran, whose research focus has been on integrity testing, counterproductive workplace behavior and other workplace issues.
"What we tell our clients is that if he fails the validity portions, they can't use the rest of the test," King said. "But we say don't reject him, just be careful. The truth is when somebody's applying for a job, they're going to want to put their best face on, and they might not want you to know everything."
For others, though, the tests do not accomplish anything that can't be achieved through normal interviews and evaluation.
"I'm not a big advocate of them," VanDeusen said. "I think if you engage in a hiring process that keeps track of what you want in an employee, you can probably have as much success as you can have buying an integrity test."
With all the tools available for employers to use to check up on what job applicants say, the advice for people looking for a job is to be honest, even if you have a criminal record.
"As you grow up, things happen," said Mikey Weinstein, president of Information Architects. "That doesn't mean you're not going to be able to get a job. After all, George W. Bush has a DUI."