Employment Criminal Background Checks. Reference and Resources Guide.

All employers, public and private sector, are under ever-increasing pressure to recruit, select, and retain capable employees. However, as employers are expending great efforts to recruit and select among applicants, they must not overlook the importance of conducting comprehensive selection processes, including criminal background checks when appropriate. Organizations that fail to recognize the risk of hiring into certain positions an individual who has a previous history of violent or inappropriate behavior, and to reduce that risk by checking the individual's background, could find themselves liable for the actions of that individual.

For example, an individual hired as an aide in a home health care program murdered the 32- year-old quadriplegic he was caring for, along with the patient’s 77-year-old grandmother. He reportedly committed the murders to cover up thefts he had made from the home. The hiring agency did not conduct a background check that would have turned up six larceny-related convictions. The defendants (Trusted Health Resources and Visiting Nurses Association of Boston) were found negligent in allowing a convicted felon to care for a cerebral palsy victim and were ordered to pay $26.5 million in compensatory and punitive damages.

In another case (Tallahassee Furniture v. Harrison), a woman let into her home a man who had been in her house a couple of days earlier as a deliveryman for a furniture company. This man attacked her with a knife, permanently damaging one arm and leaving deep emotional scars. The woman sued the furniture company and was awarded $1.9 million in compensatory damages and $600,000 in punitive damages. During the trial, it was shown that the deliveryman had not completed an application, and that a pre-employment background check was not conducted. A criminal background check would have revealed a long, documented history of violent crime. It is important to note, however, that court decisions have also shown that employers are not liable for every possible violent act committed by an employee.

For example, a negligent hiring suit was dismissed when there was nothing in an ambulance employee's background to indicate that he might commit sexual assault on a passenger. These cases suggest that employers are liable for violent acts and harassment committed by a representative of their firm only if they could have foreseen the action.

However, since employers have lost 72 percent of negligent hiring cases with an average settlement of more than $1.6 million, it appears that the courts believe a majority of incidents could have been prevented, if appropriate screening had taken place. Thus, it is important that both private and public sector organizations understand negligent hiring, employer liability, and how to avoid hiring someone who will potentially generate a negligent hiring lawsuit.

Negligent Hiring

The doctrine of negligent hiring subjects employers to liability for the risk created by exposing the public and their employees to potentially dangerous individuals.9 This is often referred to as the deep-pocket theory. Obviously, companies are usually in a better financial position to pay for damages than the employee who caused them. Much attention has recently become focused on negligent hiring. Negligence is a theory of liability premised on one's breach of a duty of care to others in the organization and to the public.

There has been an increase in the number of negligent hiring cases over the past several years. This increase is occurring for several reasons.

• First, negligent hiring theory does not limit the employer’s liability to actions taken specifically during the course of employment. Thus, employers are held liable for actions taken by employees who are off the job.
• Second, the amount of compensation awarded in a negligent hiring case may be substantially higher than that awarded in other cases.
• Third, the statute of limitations for negligent hiring claims is longer than for other claims, such as workers compensation.
• Fourth, evidence of prior acts of negligence of the employee, including his or her reputation, may be introduced in negligent hiring cases.

The increased interest in negligent hiring has caused organizations to reconsider their hiring practices. Most employers have traditionally relied on references to provide information about the background and character of a potential employee, but a majority of former employers, fearing lawsuits, only provide neutral employment references. Thus, companies are left to other devices to protect themselves against hiring a potentially dangerous employee. This has led to a proliferation of background checks. Depending on the source, anywhere from 80 percent to 95 percent of U. S. corporations employ some form of background checks. Specifically, of companies that conduct pre-employment screenings, 81 percent verify education, 79 percent check previous employment, 59 percent check references, 50 percent conduct drug testing, 37 percent examine criminal records, and 21 percent inspect motor vehicle records.

It is important to note that this information is reported for U.S. private-sector corporations.

We know very little about public-sector entities and what they are doing in terms of background checks. This is unfortunate, especially given that many municipal employees, such as police and firefighters, have a clear special duty to the public. The current article provides a descriptive summary of what local government agencies are doing related to criminal background checks. In an effort to determine the current practices of municipalities concerning the prevalence of conducting background checks of applicants, surveys were sent to 114 public employers in the United States.

Sixty-two government agencies from across the country responded to the survey, a response rate of over 50 percent.

Public Sector Agencies Conducting Criminal Background Checks Of the 62 responding agencies, all respondents indicated that they conducted criminal background checks on at least some of their prospective employees. Half of the respondents conduct background checks on all prospective hires, while other agencies restrict the background check to public-safety-related positions, such as police officer and firefighter. Of the 31 responding agencies that conduct criminal background checks on all prospective employees, five were law enforcement agencies. The law enforcement agencies typically did conduct full background investigations on their sworn personnel, while doing a less comprehensive criminal background check on civilian personnel. One law enforcement respondent conducts a full background investigation on all prospective employees, including senior aides. Of the agencies that did not conduct background checks on all prospective employees, many reported doing criminal background checks on positions that:

• · were of a sensitive nature;
• · involved public safety activities;
• · had responsibility for handling money;
• · had significant fiduciary responsibilities;
• · had access to confidential data; or
• · worked with vulnerable adults.

When does the Background Check Occur in the Hiring Process?

Twenty-two respondents (35 percent) indicated that the background check was done only when those candidates were being considered for hire. Sixteen respondents (26 percent) indicated they did the background check only after making a contingent job offer. Four respondents (6 percent), perhaps dangerously, allow the employee to begin work pending the outcome of the background check.

The above responses typically were for non-sworn employees. For public safety and sworn positions, the majority of the respondents said the background-check process begins after a qualified applicant has been tested, certified from the eligible list to the hiring authority, and interviewed. Regardless of whether or not the positions are for sworn or non-sworn openings, employers would be prudent in obtaining the applicant's expressed and knowing, written consent before conducting any type of background check to a comprehensive background investigation.

Who Does the Investigation?

A. In-house

Forty respondents (65 percent) said they complete background checks with their own employees, with the responsibility most often residing with the police or sheriff's department. Most of these agencies have a separate background investigation unit. Six respondents (10 percent) have separate background units, in both their police and fire departments, who conduct background checks on new hires in their respective departments.

A number of agencies take advantage of computer technology to access background information. A Midwest city police department does the background check, while the personnel department checks driving records through a computer link with a Department of Transportation database. In another Midwestern city, a police investigator does the background investigation for the position of police officer, while the personnel manager does all other background checks through an online computer service via U. S. Datalink. In a third Midwestern city, the staff of the employment section of the human resources department have access to the computerized records of the state crime information bureau on criminal backgrounds.

B. Outsourcing

Nine respondents (15 percent) indicated that they rely on an outside agency to do their background checks. The outside agencies included the Department of Justice, the Federal Bureau of Investigation, a state-level department of public safety, employer councils, state-level bureaus of investigations, Equifax, and verified credentials. A Southeastern city personnel recruiting office does the background checks for all personnel, except those in the protective service, via the following agencies and methods:

• state-level department of law enforcement, clerk of courts, office of sheriff, past employers, and out-of-state courts.

C. Combination of In-House and Outsourcing

Four respondents (6 percent) use a combination of in-house personnel and outside agencies to perform background-related functions. A Northeastern city has staff from its police department conduct employee background checks for all new hires in the organization, while the State Department of Criminal Justice does the full background investigation on all prospective police officers and firefighters.

Organizations should be aware of what they are getting from outsourced background checks. Many companies claim that they can perform nationwide criminal court checks on job candidates, but there is no nationwide source for records of criminal convictions. A nationwide court check could only be conducted, if every courthouse in every county in all 50 states was checked and that would include only one layer of court records. Although there are a few states, such as Connecticut, that offer central repositories that are supposed to contain conviction records from every county in that state, according to Paul Barada, founder and president of a company that conducts performance-based reference reports, most repositories are inaccurate or not kept up to date.

Background Checks on Current Employees?

The majority of the survey respondents (63 percent) do not conduct criminal background checks on current employees. For those agencies that do, the most common reason (21 percent) they are done is because the positions that current employees are promoting into require a background check.

One large Midwestern city requires employees who return from a leave of absence greater than three months to go through a background check. Additionally, their inspector general's office is routinely notified whenever a city employee is arrested. A large Southeastern city does criminal background checks on its park and recreation employees every year.

Two respondents said that any employee who transfers or promotes to another department might be subject to a criminal background check at the request of the department receiving the new employee.

Legal Challenge to Background Check?

Given the increase in recent negligent hiring cases, the last survey question asked whether the validity or legality of the agency's background check process had been challenged. The majority (84 percent) of the survey respondents indicted that their agency's criminal background check had not been legally challenged. Agencies that had their background check process challenged (8 percent) said that they had successfully defended any legal challenges in court or complaints from human rights agencies.

Employers may face a dilemma, both legally and ethically, in deciding what type of information to check during a background investigation. It can be argued that background checks are subject to the same requirements as any employee selection procedure (i.e., record keeping, adverse impact analysis, validation). At a minimum, job analysis should document the tasks or activities required in a job. Organization decision makers need to ensure that the positions that they are conducting background checks on require characteristics such as conscientiousness, dependability, honesty, or integrity, since a background check is used to make inferences about whether or not applicants have these personal characteristics.

Concern for violations of privacy are on the rise, paralleling the increase in technology available to employers. Employers may be sued for taking aggressive actions to avoid violence, while at the same time they can be sued for not taking sufficient precautions. The Americans with Disabilities Act is one likely source of civil rights liability. A recent study of workplace violence by Feldman and Johnson revealed that 34.1 percent of violent episodes at work were committed by people suffering from depression—a condition covered by the ADA. If employers use a profiling technique as part of their background check, which allows them to spot potentially violent employees before they harm someone, they may be violating the ADA. Additionally, companies need to be aware of the laws covering their states. To see the range in state laws relating to background checks, consider New York and Wisconsin. The state of New York limits the ability of employers and state licensing agencies to use the criminal records of applicants in order to reduce employer prejudice. Currently, in New York, employers have no duty to acquire knowledge of employees’ harmful predispositions by investigating the criminal records of job applicants. This remains true, even though 45 percent of released felons are convicted again within three years. A recent article in St. John's Law Review proposed requiring employers to check the criminal histories of job applicants, and as a concession for the time and effort, a cap on damages is proposed to protect employers from unlimited liability. Additionally, small employers would be exempt from the plan. The state of Wisconsin, on the other hand, passed a law last year that requires criminal background checks on virtually every prospective and current employee at hospitals, nursing homes, and home health agencies in the state. The law applies to facilities licensed or regulated by Wisconsin's department of health and family services and includes not only doctors and nurses, but also non-caregivers, such as maintenance crews and housekeeping staff. However, states do need to consider all of the ramifications of requiring criminal background checks for a broad range of jobs. As the labor market dries up, parolees and ex-offenders may become a vital source of labor in the future. In fact, prisons are now holding job fairs that are well attended by HR professionals. Frank Henry, a recent job fair attendee has hired 18 ex-offenders and has found all of them to be excellent employees. Individuals with felonies are considered for immediate employment upon release, as long as the felony conviction did not involve violence. Issues and Concerns Related to Conducting Background Checks As more public records are being placed on the Internet, the expense and time involved in conducting background checks is decreasing. However, it appears that many employers are unaware of this trend. For example, an attorney that recently represented a company in a negligent hiring lawsuit said that business can not be expected to verify the clean criminal record of every new employee, due to the cost and delay of ordering rap sheets, especially when hiring for a factory position or in an area of high turnover.

Additionally, after Walt Disney World fired a 17-year-old cook charged with raping a 16-year-old tourist in a bathroom on Disney property, the president of the security council for the Central Florida Hotel Motel Association said he recommends that tourism-related business conduct criminal background checks, but that most don't because it's time consuming and costly. Walt Disney did not conduct a criminal background check on the cook, who had a juvenile arrest record (although most juvenile arrest records are sealed). Disney has an 800-member private security force to ensure guest safety, says Disney spokesperson Diane Ledder, and Disney does not plan on instituting more background checks. They currently conduct checks on applicants for a limited number of positions, such as security guards, child-care workers, and those who handle cash transactions.

This highlights a common dilemma faced by organizations. Businesses often weigh the costs and benefits of conducting background checks and try to determine which positions warrant a check. However, decision makers do not seem to realize that they can usually find out the information they need for under $10, according to the director of the Privacy Rights Clearinghouse.

The services available range from large investigation companies to upstart, Web-based companies that offer data at bargain rates—which leads to a range of costs for background checks between $5 to $200.33 The state's department of justice charges $2 for not-for-profits, $5 for government organizations, and $13 for everyone else.

Additionally, companies such as Background Checks Systems, Inc. claim to have developed technology that allows for the first real-time background checks, allowing employers to get information in seconds, and even during the applicant interview, if they like. However, some are skeptical of such claims, especially if it is related to a criminal background check. If an organization decides to hire a company to conduct a criminal background check, they need to understand the extent of the check they are purchasing. The following questions should be asked:

• · How many counties will be checked?
• · How many years back will the check go? (Most background checking firms will only go back up to seven years due to the Fairness in Credit Reporting Act).
• · Which court systems - circuit, county, or municipal will be covered?
• · Which neighboring counties will be covered?
• · Will the check cover all previous counties of residence and their neighboring counties?

Privacy Issues

In an age of quick, easy, and inexpensive computer access, employers must also be aware of potential errors in information provided about applicants. As one retail salesman discovered after four years of failing to find a sales position, erroneous information can devastate applicants. B. Kelly was the victim of identity theft, when someone using his name and identification was arrested for shoplifting. Unfortunately, even after the error was discovered, it was not immediately corrected. Criminal records, as opposed to credit reports which fall under the Fairness in Credit Reporting Act, are not required to be corrected within 30 days. Unfortunately, for applicants in situations similar to this one, the reported information is assumed to be correct, and it is up to each individual to be aware of what is being reported about him or her.

There are also many types of reports. For example, As consumer reports are increasingly being used in pre-employment checks. These reports sketch a profile of an applicant's character and reputation through interviews with co-workers, neighbors, and others. This opens the door on all sorts of privacy issues. The law does require that employers tell the applicant that such a report is being conducted, and they must also provide the job seeker a copy of the report, if it leads to a no-hire decision.

Conclusions:

As the results of this descriptive study show, criminal background checks are widely used by agencies in the public sector. The majority of survey respondents restrict the background investigation process to positions within their public safety departments, while others indicated that all new hires are subject to background checks.

All municipalities want to ensure that their employees pose no risk to their financial and human resources. However, when deciding to require a criminal background check, appointing authorities should be required to demonstrate a job-related need. This evidence could include the following.

Will the employee:

• · have extensive contact with the public;
• · handle money or other financial resources;
• · act as caregiver for children or vulnerable adults;
• · enter private homes as part of his/her job responsibilities;
• · have access to materials deemed confidential under federal or state data privacy laws;
• · have regular access to drugs or controlled substances;
• · have access to secure areas restricted to the public and other city employees; or
• · have access to keys or other methods to gain entry to financial resources?

The bottom line is that hiring decision makers can use background checks designed to screen out applicants who would be unsuitable for certain positions, because they have demonstrated, through criminal behavior, that they are untrustworthy, violent, or otherwise unacceptable. A background-check policy should be legally defensible, if challenged, as long as it complies with state statutes governing the rehabilitation of criminal offenders. All municipalities have a responsibility to their citizens that the people they are entrusting to protect their resources do not have job-related convictions that could pose harm to the resources of the organization or to the general public. Using background checks as a tool to reduce an organization's exposure to theft, workplace violence, and negligent hiring suits is an important part of any comprehensive selection process.