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The Tort of Negligent Hiring and the Use of Selection Devices: the Employee's Right of Privacy and the Employer's Need to Know

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The Tort of Negligent Hiring and the Use of Selection Devices: the Employee's Right of Privacy and the Employer's Need to Know The Tort of Negligent Hiring and the Use of Selection Devices: The Employee's Right of Privacy and the Employer's Need to Know Cathie A. Shattuckt INTRODUCTION ................................................ 2 I. METHODOLOGY: ASSESSMENT OF THE JOB ................ 4 II. METHODOLOGY: ASSESSMENT OF THE APPLICANT ........ 5 III. THE PUBLIC RECORD: WHAT INFORMATION IS A VAILABLE .............................................. 7 IV. TECHNIQUES THAT MAY PREVENT EMPLOYER LIABILITY IN EMPLOYEE SELECTION ................................. 8 V. DEFAMATION AND THE SELECTION PROCESS .............. 12 A. Defam ation .......................................... 12 B. Defenses to Defamation ............................... 13 1. Truth ............................................ 13 2. Privilege .......................................... 14 3. Lack of Authority ................................. 16 C. PracticalSuggestions .................................. 16 INTRODUCTION American employers have long known that they are responsible for the negligent acts of an employee acting within the scope of the em- ployee's duties or in furtherance of the employer's interests.1 Employers are now discovering that they may also be liable if they hire the wrong person. In fact, an employer may be held liable even if the employee is acting outside the scope of his or her employment.2 The test applied by the courts is: When the employee was hired, did the employer conduct a t Partner, Epstein, Becker & Green, Washington, D.C.; B.S., 1967, J.D., 1970, Univ. of Nebraska; Chairman, Immigration Comm., ABA Section on Labor and Employment Law; Former Vice Chairman, Equal Employment Opportunity Commission. 1. RESTATEMENT (SECOND) OF AGENCY § 229 (1958); Joel v. Morison, 172 Eng. Rep. 1338 (1834). 2. E.g., Kendall v. Gore Properties, 236 F.2d 673 (D.C. Cir. 1956). But see Abraham v. S.E. Ontario Garages, 50 Haw. 628, 446 P.2d 821 (1968). © Industrial Relations Law Journal, Volume 11, No. 1, 1989. SYMPOSIUM SELECTION DEVICES IN HIRING reasonable investigation into the employee's background vis a vis the job for which the employee was hired and the possible risk of harm or injury to co-workers or third parties that could result from the conduct of an unfit employee?' Should the employer have reasonably foreseen the risk caused by hiring an unfit person? Due to the extension of liability for negligent hiring, employers are now finding themselves in state courts before juries defending allegations of gross negligence arising from the act of selecting employees. Jury awards and settlements have been as high as several million dollars in such cases.4 As a result, employment lawyers and human resource pro- fessionals have begun to reevaluate the selection process. They are ask- ing: What more do I have to know about an applicant, beyond his or her ability or skills to perform the job? What is reasonably foreseeable conduct?5 3. See Kendall v. Gore Properties, 236 F.2d 673 (D.C. Cir. 1956); Winchester v. Padgett, 167 F. Supp. 444 (D. Ga. 1952); Pruitt v. Pavelin, 141 Ariz. 195, 685 P.2d 1347 (1984); Kassman v. Busfield Enters., Inc., 131 Ariz. 163, 639 P.2d 353 (1981); Giles v. Shell Oil Corp., 487 A.2d 610 (D.C. 1985); Garcia v. Duffy, 492 So. 2d 435, 440 (Fla. Dist. Ct. App. 1986); Abbott v. Payne, 457 So. 2d 1156 (Fla. Dist. Ct. App. 1984); Williams v. Feather Sound, Inc., 386 So. 2d 1238 (Fla. Dist. Ct. App. 1980); Cherry v. Kelly Servs., Inc., 171 Ga. App. 235, 319 S.E.2d 463 (1984); Abraham v. S.E. Ontario Garages, 50 Haw. 628, 446 P.2d 821 (1968); Malorney v. B&L Motor Freight, Inc., 146 Ill. App. 3d 265, 496 N.E.2d 1086, 1088 (1986); D.R.R. v. English Enters., CATV, 356 N.W.2d 580 (Iowa Ct. App. 1984); Hollinger v. Jane C. Stormont Hosp., 2 Kan. App. Ct. 2d 302, 578 P.2d 1121 (1978); Stricklin v. Parsons Stockyard Co., 192 Kan. 360, 388 P.2d 824 (1964); Strawder v. Harrall, 251 So. 2d 514 (La. Ct. App. 1971); Henley v. Prince George's County, 305 Md. 320, 503 A.2d 1333 (1986); Cramer v. Housing Opportunities Comm'n, 304 Md. 705, 501 A.2d 35 (1985); Evans v. Morsell, 284 Md. 160, 395 A.2d 480 (1978); Burch v. A & G Assocs., Inc., 122 Mich. App. 798, 333 N.W.2d 140 (1983); Hersh v. Kentfield Builders, Inc., 385 Mich. 410, 189 N.W.2d 286 (1971); Pon- ticas v. K.M.S. Invs., 331 N.W.2d 907 (Minn. 1983); Di Cosala v. Kay, 91 N.J. 159, 450 A.2d 508 (1982); F & T Co. v. Woods, 92 N.M. 967, 594 P.2d 745 (1979); Weiss v. Furniture in the Raw, 62 Misc. 2d 283, 306 N.Y.S.2d 253 (1969); Stevens v. Lankard, 31 A.D.2d 602, 297 N.Y.S.2d 686 (1968), aff'd, 25 N.Y.2d 640, 254 N.E.2d 339, 306 N.Y.S.2d 257 (1969); Guedon v. Rooney, 160 Or. 621, 87 P.2d 209 (1939); Coath v. Jones, 277 Pa. Super. 479, 419 A.2d 1249 (1980); Welsh Mfg. v. Pinkerton's Inc., 474 A.2d 436 (R.I. 1984); Estate of Arrington v. Fields, 578 S.W.2d 173 (Tex. Ct. App. 1979). 4. E.g., Pruitt v. Pavelin, 141 Ariz. 195, 685 P.2d 1347 (1984) (court award: $158,698.33 compensatory damages, $25,000 punitive damages); Greenfield v. Spectrum Inv. Corp., 174 Cal. App. 3d 111, 219 Cal. Rptr. 805 (1985) (jury award: $350,000 compensatory damages, $400,000 punitive damages); North Houston Pole Line Corp. v. McAllister, 667 S.W.2d 829 (Tex. Ct. App. 1983) (jury award: $245,288.88 compensatory damages, $250,000 punitive damages). 5. See, eg., Pruitt v. Pavelin, 141 Ariz. 195, 685 P.2d 347 (1984) (employee's forgery foresee- able given previous dishonest acts); Garcia v. Duffy, 492 So. 2d 435, 440 (Fla. Dist. Ct. App. 1986) (20 year old criminal conviction did not make assault foreseeable); Abbott v. Payne, 457 So. 2d 1156 (Fla. Dist. Ct. App. 1984) (employer must inquire into past record of employee before allowing access to customer's home); Odom v. Hubney, Inc., 345 S.E.2d 886 (Ga. App. 1986) (employer unaware of waitress' criminal propensities); Slaton v. B&B Gulf Serv., 344 S.E.2d 512 (Ga. App. 1986) (employer unaware of criminal propensities); Harrington v. Chicago Sun-Times, 150 Ill.App. 3d 797; 502 N.E.2d 332 (1986) (employer's knowledge that employee carried gun on job made shoot- ing foreseeable); Hersh v. Kentfield Builders, Inc., 385 Mich. 410, 189 N.W.2d 286 (1971) (whether employer knew or should have known of criminal propensities is a question for jury); Ponticas v. K.M.S. Invs., 331 N.W.2d 907 (Minn. 1983) (rape foreseeable given employee's prior criminal rec- INDUSTRIAL RELATIONS LAW JOURNAL [Vol. 11:2 Once these objectives have been considered, certain tests may then be used to evaluate the risk certain screening devices may create or ame- liorate. What are the risks in seeking further information about appli- cants? Is there a line between what the employer needs to know about an applicant to avoid liability and inquiries that violate the applicant's right to privacy? Could the inquiries expose the employer to challenges arising from federal or state anti-discrimination laws? How can an employer evaluate the risk of hiring the wrong person in light of the employer's need to fill a position? How much does a reasonable investigation cost? How does one define what a reasonable investigation is? These questions must be considered in the context of an employer's personnel selection objectives which may include: 1) reduction of turno- ver; 2) management and reduction of employee cost; 3) improved pro- ductivity or efficiency; 4) selection of skilled and able employees; and 5) demonstration of reasonable care in hiring. Traditionally employers have used selection criteria and devices for reasons ranging from the unsophisticated to specially designed tests to measure an applicant's or an employee's ability to perform or to learn to perform a specific job. The underlying reason for an employer's use of such criteria and devices or tests is to have some certainty that those persons hired or promoted are capable, reliable, honest and loyal. Such selection criteria and devices are also used, however, to avoid making an independent judgment of the applicant's qualifications. The following discussion sets forth an analysis of the process that employers should use in evaluating selection devices generally and specif- ically polygraph tests, honesty tests, the use of outside consultants for screening, and the giving and obtaining of references. The potential lia- bility of an employer who misuses selection devices will also be consid- ered. This discussion is premised on the theory that employers are not willing to accept the risk of negligent hiring or retention lawsuits. There- fore, employers must choose selection criteria or devices that will reduce the risk of such liability while making sure not to interfere with the rights of applicants and employees. I METHODOLOGY: ASSESSMENT OF THE JOB The first step in reducing the risk of liability for negligent hiring or retention is a careful assessment of the job that is to be filled. While all ord); Gaines v. Monsanto Co., 655 S.W.2d 568 (Mo. App. 1983) (employee had "dangerous proclivi- ties" making action foreseeable); Chesterman v. Barman, 82 Or. App. 1, 727 P.2d 130 (1986), aff'd en banc, 305 Or. 439, 753 P.2d 404 (1988) (rape not reasonably foreseeable from employee's use of drugs on job); Parker v. Fox Vacuum, Inc., 732 S.W. 722 (Tex. App. 1987) (prior convictions for driving while intoxicated made automobile accident foreseeable); Blenheim v.
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