Chapter 5

Background Checks,
References and
Verifying
Background Checks 1

• This process for screening job applicants may

include:
– Contacting references
– Verifying past employment
– Verifying past military service
– Confirming the candidate actually has degrees,
licenses, etc.
– Checking driving records
– Checking for criminal convictions
– Examining credit reports
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Background Checks 2

• After hiring, the employer must also obtain documentation

verifying the employee’s right to work in the U.S.
• These activities raise legal issues, including:
– Negligent hiring
– Defamation
– Compliance with the Fair Credit Reporting Act
– Compliance with the Immigration Reform & Control Act

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Employer Responsibility for
Employee Wrongdoing
• Under Respondeat Superior, employers are
generally liable for harm to others caused by
employees acting within the scope of their
employment:
– Their actions relate to the kind of activities they were
hired to perform;
– The actions take place substantially within the
workplace, during working hours;
– And serve, at least partly, the interests of employer.

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Negligent Hiring
• Employers, like others, have a duty to exercise
reasonable care in carrying out certain activities. If
they fail, they may be guilty of:
– Negligent hiring
– Negligent training
– Negligent supervision
– Negligent retention

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Elements of a Claim of
Negligent Hiring 1

• 1) A duty to others exists which requires an

employer to take reasonable steps to avoid hiring
unfit employees based on:
– Foreseeability of harm to others if unfit person is hired
for a particular job.
– Knowledge of unfitness that employer had or should
have had if proper hiring procedures were used.
– Public policy.

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Elements of a Claim of
Negligent Hiring 2

• 2) The employer fails to exercise the proper

degree of care and hires an unfit employee.
• 3) A third party is harmed or injured by the
unfit employee.
• 4) The employer’s failure to exercise care is
the proximate cause of the harm or injury.

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NEGLIGENT HIRING: Background or
Reference Check

• Crucial to verify information from application

and interview
• Failure to conduct background check may
result in liability for negligent hiring
• After-acquired evidence may also help in
wrongful termination suits
• Reference checks are best accompanied by
written releases
Munroe v. Universal Health
Services, Inc.
277 Ga. 861, 596 S.E.2d 604 (2004)

• Christine Munroe entered Universal’s treatment facility as a

patient, and while there, a mental health assistant named
Shawn Love made improper advances toward her, and later
drugged and raped her. She brought an action for negligent
hiring/retention against Universal.

• Universal hired ChoicePoint to conduct a background check

on Love. No criminal record was found. ChoicePoint could
not confirm that Love had attended the high school that he
claimed, that Love had misrepresented the reason he left a
prior employer, and that they could not confirm the existence
of 2 prior employers Love had listed.
NEGLIGENT HIRING AND RETENTION

• O.C.G.A. §34-7-20 An employer is bound to exercise

ordinary care in the selection of employees and not to
retain them after knowledge of incompetency.

• Restatement (Second) of Agency, §213 a person who

conducts an activity through servants or other agents
is subject to liability for harm resulting from his conduct
if he is negligent or reckless . . . In the employment of
improper persons . . . In work involving risk of harm to
others.
Ponticas v. K.M.S.
Investments

• Facts: A man was hired to manage an apartment complex and

was given a passkey to all of the apartments. Upon learning
that one tenant’s husband was away, he entered her apartment,
raped her at knifepoint and tried to strangle her. She escaped,
reported the assault, and sued his employer.
• Issue: Was the evidence sufficient to support the jury’s finding
of negligent hiring?
• Held: Yes. The employer had a duty to conduct an adequate
background check, based on the foreseeability of harm from
one with access to tenants’ apartments. The man had a criminal
history, was still on parole, and could not provide bona fide
references, which the employer would have known if it had
checked.
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Just the Facts
• A patient alleged that she was raped by a mental health
assistant at a residential health care facility. The facility had
used a private investigation firm to investigate his
background. They found no criminal record, but
inconsistencies, and were unable to confirm his prior
personal care experience. He was hired without being
interviewed or asked to clarify. Is the facility liable for
negligent hiring?
– Munroe v. Universal Health Services, 596 S.E.2d 604 (Ga. 2004)

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Advice for Conducting
Background Checks 1

• No particular measure is required in all cases, but

employers should always follow their own
procedures.
• Be especially wary of rush, last-minute hiring
decisions.
• Inconsistencies and gaps in information provided by
applicants must be discovered and confronted.

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Advice for Conducting
Background Checks 2

• The detail of a background check will depend on the

position to be filled.
– Background checks should be more extensive if there is a
greater chance that unfit employees could do harm to others.
• Employers should document all attempts to gather
information, even if those efforts are not successful.
• If you must hire without a background check, hire, do the
check, and fire the employee if unfit.

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References
• Failure to check at least recent references can be
evidence of negligence in hiring.
– Substantive information can be difficult to get because of
previous employers concerns about charges of
defamation, and other legal issues.

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Elements of a Claim of
Defamation
• A statement is made that purports to be factual in
nature.
• The statement is false or substantially false.
• The statement challenges the character, integrity or
ability of another person.
• The statement is “published”.
• The reputation of the person is harmed.

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http://www.youtube.com/watch?v=Bc600OeNxtE&feature=relmfu
Defenses to Defamation

• Employers have a qualified privilege

defense to a claim of defamation.
• This protection can be lost if:
– The statement was made with malicious intent
to harm the person’s reputation,
– Or with reckless disregard for the truth, or if
– Publication of the statement was overly broad.
• Smart Practice: Speak only to those with a need to
18 know.
Other Defenses to
Defamation
• Truth
• Consent

• Note: Even if the employer wins with such a

defense, it still must pay the cost of defending itself
in court, which is why most employers try to avoid
litigation.

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Defamation:
Libel & Slander

• Publication
• Defamatory meaning
• Untrue
See Atlanta Humane Society v. Mills, 274
Ga. App. 159; 618 S.E.2d 18 (2005).
Smart Practice –
Departing Employees
• Before providing references, ask the employee to
sign an authorization form.
• Negotiate with an employee who is leaving on an
agreed letter of reference.
• Make certain that only authorized employees
give references.
• Make sure references are based on documentary
evidence.

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Sigal Construction v.
Stanbury

• Facts: A man was terminated from his job as a project

manager, the reason for his firing in dispute. Giving a
reference to a potential future employer, a manager at his
former employer made disparaging statements, although
he had never observed, supervised, evaluated or read an
evaluation of the employee. The man sued for defamation,
and the jury found in his favor.
• Issue: Whether the former employer defamed the former
employee in a manner that disqualified the firm from its
qualified privilege.
• Held: There was sufficient evidence from which a
reasonable jury could find the employee had been
defamed with recklessness or indifference to the truth, so
23 that the employer’s qualified privilege had been lost.
Negligent Referral
• An employer giving a reference may give incomplete
information or misrepresent the work of a former
employee.
– If that employee then harms others, the employer giving
the reference may be liable for negligent referral.
• If an employer chooses to give a reference, it must
not be misleading.

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Davis v. Board of County
Commissioners

• Facts: A prison employee facing disciplinary action for

inappropriate sexual conduct with female inmates
resigned before his hearing and sought work at a mental
health facility. His former employer provided very positive
references and did not mention the disciplinary hearing.
He was hired, and assaulted a female inmate. The patient
sued for false letters of recommendation.
• Issue: Whether an employer owes potential employers
and foreseeable third parties a duty of care not to
misrepresent when a substantial risk of harm is
foreseeable.
25 • Held: If an employer chooses to give a reference, it has a
duty not to misrepresent when the risk of harm is
Criminal Records 1

• Failing to check for a criminal history may be clear

evidence of negligent hiring.
• Distinguish between “arrests” and “convictions.”
– Employers may inquire about convictions, but not arrests.
• Distinguish between “misdemeanors” and “felonies.”
– Felonies are serious crimes.
• Criminal records are decentralized.

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Criminal Records 2

• Employers should use an investigative service and make

sure the search is sufficiently broad.
• If the information indicates unfitness where there is
foreseeability of harm, applicants should not be hired.
• African Americans and Latinos are far more likely to be
arrested or convicted, and the US imprisons far more citizens
than other countries.
– Thus, policies limiting employment based on criminal histories may
create adverse impact.

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Credit Reports
• Consumer credit report
– Any communication of information by a consumer
reporting agency bearing on a consumer’s credit
worthiness, character, or reputation, which is to be used
as a factor in assessing eligibility for employment
purposes.
• Investigative report
– A report containing similar information, but also based
on personal interviews with friends, neighbors, and
other associates.

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Fair Credit Reporting Act
• FCRA applies to credit reporting agencies and
others who do background checking.
• Employers must:
– Get a separate, written consent from the applicant to
obtain his credit report.
– Provide the applicant with a “pre-adverse action”
disclosure prior to taking any adverse action, if based in
part on credit report.
– Provide an adverse action notice.

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Verifying Employment
Eligibility 1

• Employers are prohibited from knowingly hiring or

retaining unauthorized “aliens”.
– Note that an employer must check the eligibility of ALL
hires, not just peoples from other countries.
– See this link to E-Verify.
• But, employers with 4 or more employees may not
discriminate in hiring or termination decisions based
on national origin and citizenship.
– This protection against discrimination applies only to US
citizens and legal immigrants.
– This requirement does not prohibit employers from
preferring US citizens over aliens when two individuals
30 are equally qualified.
Verifying Employment
Eligibility 2

• For all newly hired workers, within 3 days, the

employer must verify employment eligibility by
completing federal I-9, which requires certain
documents as proof of eligibility, including:
– Driver’s license
– Birth certificate
– US passport
– Resident alien registration card
– Unexpired employment authorization document
– And others
• See the back of the I-9 form
31 • See E-Verify
What Would You Do?
• Your security firm, which has sensitive, proprietary
information about the companies it serves, has an
immediate need for a night janitor. Sometimes,
confidential information on work in progress is
visible in offices which the new janitor would have to
clean. The new hire must start tonight and you have
had no opportunity to do a background check. What
would you do?

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Next:
• Chapter 6 – Employment Testing
– When may you use tests to screen applicants?
– What kinds of tests can you use, and what kinds are
prohibited?
• The answers to these questions and more are next.

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Instructor’s Note
• Instructor’s Notes for What Would You Do?
– Students should recognize that a background check
must be done. The new hire can start on the condition
that a background check be done and, if disqualifying
information is discovered, the new hire will be fired. In
addition, it would be prudent to make certain that no
confidential information is visible until eligibility is
verified.

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