The Recruiter’s Liability for Wrongful Hiring: Injury BY the Candidate, Part 2

Apr 29, 2010

Yesterday in part 1, we discussed “traditional indirect liability,” which covered who is responsible for the wrongs of the employee on the job. Today we focus on negligent hiring and strict liability.

2. Negligent Hiring

Employers are now being constantly sued for negligent hiring. This means the act of hiring an unfit employee, who then proximately (directly) injures another, will render the employer liable. As with misrepresentation, the issue becomes whether the employer “knew or should have known” about the dangerous propensities of the candidate.

This isn’t vicarious liability — it’s direct. And yours is too. The victim can name you for your negligent “consulting.” In some states he must — you’re an “indispensable party.” The employer won’t forget it paid your five-figure fee either.

Liability for “negligent hiring” encompasses everything you can imagine (and many things you can’t). Statistically 80% of all resumes contain some false information. That means just by using them you’re exposed. All the victim has to show is that if something falsified had been checked, the injury wouldn’t have occurred.

Let’s say there’s a gap in the candidate’s employment between 1986 and 1987, and his resume doesn’t show it. During that time, he was arrested for drunk and disorderly conduct, and drying out from a chronic alcohol problem. Then he was hired by a source company, you recruited him away, and placed him with your “client.” You checked references by phone, but didn’t pick up the discrepancy. He joined the company bowling team, and after six months began drinking again. One night after a game, he became unruly and punched another employee in the nose without provocation.

Under the negligent hiring theory, a court could easily find the failure to pick up the drinking problem directly caused the injury: The victim’s lawyer would argue that you had a duty to “screen properly,” verify references in writing, then cross-check them for accuracy.

Maybe not a duty to engage an investigation service, check the criminal records or check the civil filings — yet.

Is the employer liable? Probably. You’re jointly and severally liable, though. You can point your fingers at each other from gavel to gavel, but you’re both on the hook. Only fate has kept recruiters out of the “third-party liability” area, since no major cases involving recruiters have been litigated — yet.

Consider the Missouri case of a male employee at Monsanto who had access to addresses of coworkers. He was infatuated with a female secretary and followed her home one evening. Then he killed her and was convicted of murder. Her parents sued Monsanto. The Missouri Court of Appeals held the violent background of the employee was an issue, and that the jury could hear it to determine whether he should have been hired into a position where he foreseeably could injure others. (Gaines v. Monsanto Co., 655 S.W.2d 568)

Coworkers aren’t the only people who win lawsuits like this. Customers are “customarily” injured by employees through fraud, embezzlement, defamation, (libel and slander), intentional infliction of emotional distress, assault and battery, false imprisonment, invasion of privacy, and even usual negligence and breach of contract. There’s exposure to you in every placement.

This might cause you to “fireproof” your ads, brochures, fee schedules and other written PR items. They often contain flammable words (“highly qualified,” “thoroughly screened,” “carefully checked,” “guaranteed,” etc.).

The first smoke signal will have you ready to evacuate.

3. Strict Liability

We’re starting to see cases move toward a strict liability approach to hiring. Strict liability short-circuits all the common law rules and says simply: If you hire someone and they injure someone else during any activity connected with the job, you’re liable. If you recruit someone for a “client,” the same rule applies.

These cases are pending at the trial level. All it will take is one to be lost and affirmed on appeal for a fireball to start rolling downhill.

The “strict liability” concept is applied when your dog bites someone, or if you manufacture a defective product that injures someone. A few limitations on the ambit of liability exist, but they’re not anything definite enough to save your insurance premiums. The fact is people who injure other people usually have a history of some similar act. We’re all remarkably predictable.

We also blaze a trail behind us from our first cry. As Irwin Blye and Ardy Freidberg observed in Secrets of a Private Eye:

Information from government agencies, insurance companies, loan companies, even banks, is accessible legally and without misrepresentation. You just have to know how to do it. The jargon and turns of a phrase that are peculiar to certain fields are the keys to this information kingdom.

. . . While you ponder the enormity of the fact that all this information is available to you, let me add that computerization has made access to this information faster and more complete than ever before . . . [C]onsider that intimate details of your life exist on whirring computer tapes and that those tapes often spill their proverbial guts when the right button is pushed.

I hope you’ve taken steps to fireproof your business. Headhunter’s forest is becoming a dangerous place for the unprotected.

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

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