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The Recruiter’s Liability for Wrongful Hiring: Injury BY the Candidate, Part 1

Apr 28, 2010

On Monday and Tuesday we covered the known area of liability for injury to the candidate. Now we start another two-day series that goes into the unknown territory of liability when he injures someone else.

1. Traditional Indirect Liability

One of the most fundamental principles of law is the Latin phrase respondeat superior.

As it has developed, it means “The employer is responsible for the wrongs of the employee on the job.” No corporate defense lawyer argues about that — only about whether the “wrong” occurred “within the course and scope of employment.”

There is no limit to the number of “course and scope” fact patterns that can arise.

Was the act “authorized?” Was it “ratified” (impliedly accepted)? Was it “reasonable?” Was it for the “employer’s benefit?” Was it done during “working hours?”

The traditional “employment agency” had no difficulty here. If the fee was paid by the “applicant,” it was no great legal leap to show it was acting on his behalf. Even if the fee was paid by the employer, the alignment was with the applicant. But “clients” don’t see “applicants” — they see “candidates.” They’re judging a beauty contest, and you’re the modeling agency.

The alignment — your liability — runs to the employer.

The “respondeat superior” theory invokes vicarious (indirect) liability. It is a vestige of the feudal right of control of the “master” over the “servant.” Since employers usually have “deeper pockets” (and insurance), vicarious liability is also a practical way to allow victims to recover.

Recruiters don’t have a right of control over their candidates. If you’ve ever discovered a “placement in the basement” (back-door hire) you know just how true that can be. And sadly, recruiters who need to defend litigation often have “deep pockets” due to holes. It’s expensive, and costs even more when they’re defending rather than placing.

So historically, the only area of concern for permanent placers was a cross-complaint (counterclaim) by the employer against the recruiter for not checking references, not checking enough, misrepresenting qualifications or credentials, etc.

Every case was one where the candidate was hired and working for the employer, though. Your liability was difficult to establish even if you oversold and underscreened. E&O carriers didn’t get particularly nervous. It was only an occasional brushfire that could be easily contained.

Editor’s note: Tomorrow we conclude our series with more information on the unknown territory of liability after the candidate is placed and injures someone else.

This article is for informational purposes only. Please consult your attorney for specific legal advice.

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