1.4 NEGLIGENT HIRING AND BACKGROUND CHECKS
1.401 Overview. There has been a growing trend in most states toward recognizing negligent hiring actions against employers. When courts have addressed the issue of an employer's liability for the negligent hiring, retention, or supervision of employees who engage in criminal or violent acts, they often have found employers liable for substantial monetary damages.
The negligent hiring theory of employer liability is to be distinguished from the well-established legal doctrine of respondeat superior, under which an employer may be held liable for the wrongs or negligence of an employee acting within the scope of the employee's duties or in furtherance of the employer's interests. In contrast, under the negligent hiring theory, an employer may be liable for an employee acting outside the scope of his or her employment—even when acting outside the employee's working time. 127 Virginia law follows the minority rule, which allows claims of respondeat superior and claims of negligent hiring to proceed in the same action. 128
An employer's liability for the negligent hiring of an unfit employee depends on the reasonableness of the investigation conducted by the employer into the employee's background in light of the job for which the employee was hired and the risk of harm or injury to third parties, such as customers or co-workers, as a result of violent or criminal behavior by the unfit employee. Issues for the jury include whether an employer was negligent in hiring or retaining the unfit employee and whether the employer should bear the costs associated with the injury or harm to innocent third parties caused by the employee's criminal or violent conduct.
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1.402 Theory of Negligent Hiring. In a negligent hiring action, the employer is held liable for its own conduct, not the conduct of the employee. The conduct of the employee is important only because it results in injury to the plaintiff, not because it is the basis of the employer's liability. The basis of the liability is the employer's negligence in hiring the employee. 129 As noted above, the employer may be held liable even if the employee was acting outside the scope of employment when the plaintiff was injured. 130 One court has held, however, that liability will only attach when the employee's actions occur at the employer's place of business or are committed within the scope of employment. 131
A related cause of action, "negligent retention," lies when the employer has failed to discharge an incompetent or unfit employee and it was foreseeable to the employer that the employee would be a source of harm or danger to others. The difference between negligent retention and negligent hiring is the time at which the employer is charged with either actual or constructive knowledge of the employee's incompetence or unfitness for employment. In Degitz v. Southern Management Services, Inc. 132 the court described negligent retention as occurring "when, during the course of employment, the employer becomes aware or should have become aware of problems with an employee that indicated his unfitness, and the employer fails to take further action such as investigating, discharge, or reassignment." 133
Negligent supervision of or negligent failure to control an employee is a cause of action against employers that evolved from the doctrine of respondeat superior. It imposes a duty on employers to exercise ordinary care in supervising the employment relationship so as to prevent the foreseeable misconduct of an employee from causing harm to others. As a result, liability can only be based on a tort committed within the employee's scope of employment. 134 The plaintiff must establish that the employer had knowledge of the employee's incompetence or unfitness and failed to properly supervise or control the employee. 135
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Restatement (Second) of Agency appears to address the tort of negligent hiring:
§ 213. Principal Negligent or Reckless
A person conducting an activity through servants or other agents is subject to liability for harm resulting from his conduct if he is negligent or reckless:
a. in giving improper or ambiguous orders or in failing to make proper regulations; or
b. in the employment of improper persons or instrumentalities in work involving risk of harm to others; or
c. in the supervision of the activity; or
d. in permitting, or failing to prevent, negligent or other tortious conduct by persons, whether or not his servants or agents, upon premises or with instrumentalities under his control.
The Restatement also provides:
§ 219. When Master Is Liable for Torts of His Servants
. . . .
2. A master is not subject to liability for the torts of his servants acting outside the scope of their employment, unless:
| a. the master intended the conduct or the consequences, or | |
| b. the master was negligent or reckless, or | |
| c. the conduct violated a non-delegable duty of the master, or | |
| d. the servant purported to act or to speak on behalf of the principal and there was reliance upon apparent authority, or he was aided in accomplishing the tort by the existence of the agency relation. |
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The Restatement (Second) of Torts also addresses the issue of negligent hiring:
§ 308. Permitting Improper Persons to Use Things or Engage in Activities
It is negligence to permit a third person to use a thing or to engage in an activity which is under the control of the actor, if the actor knows or should know that such person intends or is likely to use the thing or to conduct himself in the activity in such a manner as to create an unreasonable risk of harm to others.
These Restatement definitions have been adopted by a majority of the courts that have so far recognized a cause of action for negligent hiring.
1.403 Elements of Negligent Hiring.
A. In General. For an employer to be held liable for negligent hiring, retention, or supervision, a plaintiff must show that:
| 1. | An employment relationship existed between the employer and the person whose act caused the plaintiff's injury; | |
| 2. | The employee was unfit for hiring or retention, considering the nature of the employment and the risk posed by the employee to those who would foreseeably associate with that employee in the course of employment; | |
| 3. | The employer knew or should have known of the employee's unfitness; | |
| 4. | The employee's act or omission was the cause-in-fact of the plaintiff's injuries; and | |
| 5. | The hiring of the employee was the proximate cause of the plaintiff's injuries. |
B. Unfitness of Employee. The unfitness of the employee must be established with reference to the nature of the employment and the risk posed to persons who foreseeably would come into contact with the employee. The courts
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have generally agreed that an employee's incompetency or unfitness must be based on a course of conduct rather than on a single incident or act. 136
The employee was found to be unfit for hiring or retention in the following cases:
| • |
Woodward v. Mettille, 400 N.E.2d 934 (Ill. App. Ct. 1980) (employee's habitual intoxication). | |
| • |
Colwell v. Oatman, 510 P.2d 464 (Colo. Ct. App. 1973) (physical and mental defects that affected the employee's ability to perform the work). | |
| • | Svacek v. Shelley, 359 P.2d 127 (Alaska 1961) (employee frequently engaged in malicious or vicious behavior). |
Cases in which courts have found the employee to be fit and competent include:
| • |
Hersh v. Kentfield Builders, Inc., 189 N.W.2d 286 (Mich. 1971) (employee's criminal record only one factor in determining employee's competence). | |
| • |
Easley v. Apollo Detective Agency, Inc., 387 N.E.2d 1241 (Ill. App. Ct. 1979) (employee's arrest record not determinative of whether employee was competent and fit for employment; arrest record, however, was something that employer should have discovered and considered). | |
| • | Hipp v. Hospital Authority of Marietta, 121 S.E.2d 273 (Ga. Ct. App. 1961) (licensed professionals in good standing may be presumed to be competent and fit for employment). |
C. Duty to Use Reasonable Care. Under the theory of negligent hiring, the employer owes a duty to use reasonable care to ensure that the applicant is competent and fit for employment. 137 An important part of this duty is the responsibility of the employer to conduct a reasonable investigation of the applicant's background. To state a prima facie action for negligent hiring, the plaintiff must prove that the employer owed a duty to the plaintiff to use
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reasonable care in hiring. Courts have either used a foreseeability test or based the determination entirely on the legal status of the plaintiff. 138
The requirement that an employer hire fit and competent employees, and thus conduct reasonable background investigations, is based on the fact that the employer receives some benefit from the services of the employee.
The scope of the employer's duty depends on the circumstances of the employment. 139 In particular, the nature of the employment and the degree of risk to third persons who will foreseeably come into contact with the employee determine the scope of the duty. 140 Courts have held that the duty to investigate is greater when the applicant will be employed in a skilled or hazardous occupation. 141
In Evans v. Morsell, 142 a customer sued a tavern owner for damages resulting from personal injury when the customer was shot by the bartender of the tavern. The bartender had a prior criminal record of which the defendant was not aware. The defendant had asked the former owner about previous employees when the defendant purchased the tavern, and the former owner recommended the bartender as a good worker and a person whom the defendant should employ. The court found that the employer's investigation was sufficient to avoid a breach of duty, notwithstanding the failure to inquire into the bartender's criminal record, since the inquiry did...
