Preventing Negligence in Hiring

In addition to avoiding discriminatory hiring practices, employers must use care in their hiring selection to minimize the risk of a negligent hiring and/or retention claim. Under the negligent hiring and retention doctrine, injured third parties have, in certain situations, successfully sued employers for negligent hiring or retention of employees who engage in criminal or violent acts that occur after working hours or outside the scope of employment.

Liability exists when an employer places a person with known tendencies, or tendencies that should have been discovered by a reasonable investigation, in a position where one should have foreseen that the person posed a threat of injury to others.1

For example, you may be found negligent in employing a person whose violent criminal background would have come to light if you had done a background check after making a conditional job offer. Current law emphasizes the importance of a thorough investigation into an employee’s background, especially in sensitive positions, positions of trust or positions with public contact.

• If the employer knew, should have known of or failed to use reasonable care to discover the employee’s unfitness for a position before hiring that individual, employers have generally been held liable.

Plaintiffs have prevailed in situations where:

• A pastor sexually molested one of his adolescent parishioners, where there was evidence that he had sexually molested young males in the past.2
• A teacher, hired by a boarding school, kidnapped and assaulted several children. The teacher had admitted on his employment application that he had been arrested and charged with violating a public indecency statute and that he had a bench warrant outstanding against him. The school failed to investigate this incident and hired him anyway.3

When making hiring decisions, carefully review and consider the following to reduce the risk of liability for negligent hiring, retention and training:

• Identify potential liability factors such as high stress, handling negotiable instruments, driving vehicles, working with children and access to private property.
• Identify the traits related to the potential risk for each of those factors, such as poor driving records, criminal records or credit records, but realize that there are legal limits to obtaining such information. See Restrictions on Obtaining Criminal History and Obtaining Applicant and Employee Credit Report.
• If you have a job-related reason for seeking conviction history, you must wait until after the initial job offer has been made and follow the strict rules regarding notice to the applicant. For more information, see Restrictions on Obtaining Criminal History.
• Question the candidate about any gaps in employment. There may be a legitimate explanation, but the question is still valid.
• Contact each previous employer to verify not only dates of employment and positions held, but also information about the employee’s reliability, tendency to engage in violent conduct, if any, and any instances of insubordination, dishonesty or other potential problems. Though many employers follow a policy limiting the amount of information given to prospective employers, carefully document the fact that you attempted to obtain the additional information but were unsuccessful, and document all information received from prior employers and references. For more information, see Checking Applicant References.
• Obtain a release from the applicant protecting you and the people you contact about references from invasion of privacy or defamation claims.
• Where necessary for the job, require applicants to provide certified copies of insurance, credentials, licenses, transcripts or other documents you may require for employment. For information on driving records, see Requesting a Driver’s License in Employee Identification.
• Ensure that employment applications clearly state that omissions, misrepresentations or falsifications of information may result in the applicant’s rejection or the employee’s termination.
• You can conduct pre-employment drug testing as a condition of hire after you make the offer. For more information, see When Drug Testing May Be Permitted.
• FEHA regulations prohibit the use of automated decision systems (ADS), including artificial intelligence, in employment practices such as recruiting and hiring tasks if the ADS discriminates against an applicant or employee on a basis protected by the FEHA. To the extent you use software, apps, platforms or other technology that may fall under the regulation's broad definition of ADS, you should review FEHA regulations and consult with legal counsel to ensure compliance. For more information, see FEHA - California's Fair Employment and Housing Act.

Liabilities and Penalties

To recover damages for negligently hiring or retaining an employee who causes the plaintiff’s injury, the plaintiff generally must establish all of the following:

• The existence of the employment relationship.
• The incompetence of the employee who caused the specific negligent act on which the legal action is based.
• Your actual or constructive knowledge of the employee’s incompetence.
• Your legal duty to select fit and competent employees.
• That the employee’s act or omission caused the plaintiff’s injury.
• That your negligence in hiring and/or retaining the employee resulted in harm to the third party.

In addition, a plaintiff can recover punitive damages under the negligent hiring or retention doctrine if it’s shown that you recklessly or intentionally hired or retained the employee who caused the injury. Under California law, a plaintiff must show that the employer engaged in one or more of the following:

• Had advance knowledge of the employee’s unfitness and employed the person with a conscious disregard for the rights or safety of others.
• Authorized or ratified the wrongful conduct for which the damages are awarded.
• An officer, director or managing agent of the corporation was personally guilty of oppression, fraud or malice.4

Federal Contractors and Internet Applicants

Federal contractors have specific record-keeping requirements for Internet-based job applications. For more information, visit the Office of Federal Contract Compliance Programs’ website.

1. See e.g. Phillips v. TLC Plumbing, Inc., 172 Cal. App. 4th 1133 (2009)