Your organization can be held liable for "negligent hiring" if an employee commits a crime and you could have (or should have) prevented it. That's why it's crucial to run background checks to screen out risky applicants, particularly those who would have contact with customers (especially minors).
But don't think your duty ends after you receive a clean. A background check may save you from negligent-hiring liability, but if supervisors allow employees to run wild, you could still face liability for negligent supervision, as in the case below.
That's why it's vital to train employees continually, remind them of the complaint process and follow up immediately on complaints. That won't prevent all employee misdeeds, but it will give you a solid defense against negligent supervision claims.
Recent case: A mental-health facility placed one of its employees, Sam Craft, on leave after he allegedly sexually assaulted a female patient. The patient sued the facility, alleging negligent hiring and negligent supervision.
The court tossed out the negligent hiring claim.
Reason: The facility proved it ran a background check on Craft that came back clean. However, the court did allow the patient's negligent supervision claim to go to trial, saying a jury must decide whether the facility failed to supervise its staff. (Vellafane v. Foundations Behavioral Health, No. 03-1019, ED Pa, 2005)
Final note: Several national employers have recently lost cases involving negligent hiring. Retail giant Wal-Mart began running criminal record checks on all applicants after being found responsible for sexual assaults committed by employees.
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