negligent hiring

How to Avoid Negligent Hiring: A Guide for Employers

Aug 11, 2023 | Resources

Anyone who has worked in management for any company bigger than a “Mom and Pop local” is certainly familiar with the concept of negligent hiring. The term refers to a situation where a company may be legally responsible for the harmful actions of one of its employees. More specifically, such a case may only be considered negligent if the plaintiffs or injured parties can prove that the harm caused by the employee was in some way foreseeable or predictable. 

While precise definitions will vary from state to state, there is one trait that many have in common. The only way companies can avoid the legal risks of negligent hiring is to take “reasonable care” when screening and considering new employees. 

Your first reaction to this information may be – “What does ‘reasonable care’ mean?” which is a legitimate question! Even in the legal world, this phrase is subjective and open to some individual interpretation. In this article, we will explain the responsibilities expected of employers to demonstrate reasonable care in hiring, examine the possible consequences of negligent hiring, and, most importantly, highlight best practices to avoid it. 

An Employer’s Due Diligence

We mentioned that the exact legal definitions of negligent hiring and “reasonable care” change from state to state, but the party injured by employee misconduct must demonstrate three criteria to prove a negligent hiring case. 

  1. The company owes a “duty of care” to its customers, which is the foundation of tort law (cases where injured parties sue businesses or legal entities that are somehow responsible for the injury). In short, the idea is that a company has a responsibility to avoid situations where their service or products could foreseeably cause injuries to their customers or the public. 
  2. The company’s actions failed to live up to the standards of that “duty of care,” which directly led to the customer’s injury. In a situation where companies might be held responsible for the actions of their employees, negligent hiring cases are all about tracing the chain of events that led up to the employee in question causing harm. The company may be negligent if there were visible warnings of the danger that they missed or ignored. 
  3. The dangerous circumstances under which the plaintiff was injured, should have been foreseeable by the company. A commercial truck colliding with something or flipping over could be the result of a genuine, unpredictable accident. But a driver with a documented history of substance abuse is unfit for the job.

Possible Consequences of Negligent Hiring

There is no escaping the fact that hiring a new employee is a potentially complicated and drawn-out process. Moreover, hiring good help does not come cheap.

While there are many situation-specific variables, one estimate says that hiring a position with a salary of $60,000 could easily cost a company a total of $180,000. It is easy to see why so many companies try to save that time and money by cutting a few corners during the hiring process. 

Overall, however, these sizeable costs pale in comparison to the expenses of the potential damage of hiring unfit employees. Companies do not tend to have a high legal success rate in negligent hiring cases, and, according to Forbes, the average settlement in such a case is over one million dollars and is potentially much, much higher.

How to Avoid Negligent Hiring

Given the high stakes involved, it is vital to ensure you avoid negligent hiring at all costs. Below are ways a company can live up to their “duty of care” to their clients.

Verify Professional History

Unfortunately, the single most common mistake contributing to negligent hiring is the single easiest step to follow through on – doing a thorough check on the professional history of a job candidate. It is no secret that people will lie on their resumes if they think it gives them a better shot at landing a job, but these lies may be spotted with a bit of due diligence. 

A company should contact employee references or at least contact the last few companies listed on a resume to verify the information is accurate. If a candidate has inflated the importance of their previous job or even outright lied about working somewhere, a quick check can catch this lie before it is too late. 

Verify New Hire Competencies 

Like the last step, it is your responsibility to ensure that job candidates have the required skills and experience to do their jobs well. 

Beyond reaching out to past employers, a company should have a thorough and rigorous interview process that includes an in-house assessment of the candidate’s relevant job skills. If someone who works with food is familiar with basic food-prep hygiene, a clerical position may need to demonstrate typing skills, computer knowledge, for example.

Conduct Thorough Background Checks

Apart from contacting past employers to verify work history, a company needs to verify that their new hires don’t have other significant risk factors in their history, which generally means a thorough and reliable pre-employment background check and relevant drug testing.

Employees with a history of legal problems connected to sexual assault, substance abuse, or fired are all red flags that may indicate problems for you down the road should you bring them on board. If you hire someone with this kind of history and they end up hurting someone, the employer is at fault for failing to act on the foreseeable risk.

Stay Observant And Follow Up on Complaints

Although you do not want to keep new employees under constant or unreasonable surveillance, paying extra attention to them during their early time with your company is vital. 

Watch how they interact with their co-workers on a day-to-day basis, and if you receive any complaints, treat them seriously and follow up with an investigation. Missing or ignoring early warning signs with a new employee may easily be considered negligent hiring. 

Turn to Pre-Employment Investigations for Reliable HR Help

We have included all the basic reasonable steps one should take to avoid being guilty of negligent hiring. But if there is one thing you have noticed, it is that these cases can be complicated and have different variables from situation to situation. 

Having reliable, trustworthy help in your HR department makes all the difference. At Pre-Employment Investigations, we bring all of our expertise in the world of hiring and Human Relations to help guarantee that you have only the highest quality staff at your disposal.

Contact us today to find out more.