WARNING: By failing to perform background checks on employees, your business may be open to serious legal and customer relation risks!

Failing to Screen Your Employees Can Cost You!

In at least 28 states, Negligent Hiring and Retention Laws hold employers liable for willful misconduct by their employees. In some cases, it does not matter if the actions of the employee occur outside the place or scope of employment. Failure to screen current and prospective employees for criminal history and substance abuse can cost your company millions of dollars!

Average settlements in negligent hiring cases are now 1.6 million dollars, according to Liability Consultant’s, Inc. The companies involved in such lawsuits are often prime candidates for compensating the victim. This trend can be attributed to the fact that the company is most likely to have the funds and resources available to do so.

While negligent hiring and retention laws are not necessarily new, claims have been steadily increasing since the 1980’s. Interest continues to grow, in not only determining who may be at fault for certain offenses, but also in compensating the victim. With this trend in place, it’s likely the rise in negligent hiring and retention lawsuits will continue at a rapid pace.

Are You Doing Enough To Protect Your Employees?

Criminal behavior is not the only threat to your business. Substance abuse can also lead to significant damages and monetary loss. The National Clearinghouse for Drug and Alcohol Abuse reports, “No business regardless of size is immune to the countless problems that alcohol and drug abuse can cause. Workplace alcohol, tobacco, and other drug related problems cost U.S. companies over $100 billion each year".

You can protect your company, employees and customers by performing pre-employment and random drug screening tests.

As the filing of lawsuits continues to increase, it could be fair to say that the issue of negligent hiring requires the attention of every employer. Now, more than ever, employers must understand what defines negligent hiring and retention, and how they can create a safe environment through proper hiring practices.

We Can Help!

Would you like some good news? Peopletrail.net will help you minimize risk by performing thorough background investigations and substance abuse tests before a potential employee is hired. Employment screening will:

• Insure the safety of all your employees and customers
• Increase company productivity
• Reduce turnover and training costs
• Protect you and your company from liability in a lawsuit

Reduce Costs By Conducting Background Checks

• It costs $7,000 to replace a salaried employee, $10,000 to replace a mid-level employee, and $40,000 to replace a senior executive. - Recruiting Times
• The average organization loses more than $9 per day, per employee, and 6% of its annual revenue to fraud and abuse. - Association of Certified Fraud Examiners

The American Management Association reported losses to U.S. Business due to:

• Employee pilferage over $10 billion.
• Commercial bribery over $10 billion.
• Embezzlement over $4 billion
• Vandalism over $2.5 billion
• Burglary over $2.5 billion
• Insurance/Workers Compensation fraud over $2 billion.
• Arson over $1.3 billion.
• Computer Fraud over $1 billion.

Real Negligent Hiring Cases

A furniture company was found liable for $2.5 million for negligent hiring and retention of a deliveryman who savagely attacked a woman customer in her home. -Tallahassee Furniture Co., Inc. v. Harrison

An employee with a criminal record sexually assaulted a child; $1.75 million awarded for negligent hiring and retention. -Doe v. MCLO

A nursing home was found liable for $235,000 for negligent hiring of an unlicensed nurse with 56 prior criminal convictions, who assaulted an 80-year-old visitor. -Deerings West Nursing Center v. Scott

An employer settled for a $2.5 million suit seeking to hold it liable for negligent hiring, and entrustment of an intoxicated security guard. The guard had an on-duty traffic accident in a company car which killed him and another motorist. -Butler v. Hertz Corp

A store customer detained by security guard as a suspected shoplifter and injured while being restrained was awarded $10 million in damages in a suit against the store, claiming negligent hiring. -Porter v. Proffitt's, Inc

A $5 million settlement was awarded to the family of a deceased female tenant against the apartment complex owner and management; the suit claimed that the tenant was killed by the brother of the complex's assistant manager, and that it was negligent hiring to hire an assistant manager without a criminal background check. -Liebman v. Hall Fin. Group, Inc

A vacuum cleaner manufacturer was liabe for $45,000 because one of its distributors hired a door-to-door salesperson with a criminal record, who then raped a female customer in her home; (manufacturer should have required its distributors to do pre-hiring screening of door-to-door salespersons to prevent hiring of persons with criminal histories). -McLean v. Kirby Co.

Other Interesting Facts

• A recent study found that 53% of job applications contained false information. - The Society for Human Resource Managers
• If recent incarceration rates remain unchanged, an estimated 1 of every 20 persons (5.1%) will serve time in a prison during their lifetime. - Bureau of Justice Statistics
• 30% of business failures are due to poor hiring practices. - Department of Commerce
• On average in U.S. businesses, at least half of all new hires don't work out. - Fortune Magazine, Feb. 7, 2000, page 52

Contact us to setup the best possible legally compliant background-screening program designed for your specific needs.

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