Employment Screening Update

Negligent Hiring Lawsuit Fails

Negligent hiring lawsuits are one of HR's worst nightmares.  An employee is injured in an attack by a co-worker who has a history of violent behavior.  The injured worker sues the employer for negligent hiring and wins a huge award.  That unfortunate scenario was nearly acted out in a recent California court case.  A female employee was sexually assaulted by a newly hired male co-worker.  Though the co-worker had no criminal history, it turned out he'd been fired from his previous job after groping a female employee.  The plaintiff claimed the company should have known his history and refused to hire him.  The defendant -- the employer -- argued that it had conducted a background check and checked references before hiring him and found nothing that would indicate he shouldn't have been hired.  In this case, the employer prevailed.  The judge found for the defendant on the grounds that the employer had conducted adequate due diligence in hiring and was non-negligent.  So here's an instance where a simple inexpensive employment screening report saved a company from substantial financial loss.

Disgruntled Employees Being Laid Off May Steal Sensitive Data

Companies forced to lay off employees face a risk many are not fully aware of, says Adam Bosnian, VP of Products at IT security expert Cyber-Ark.  His company estimates that over fifty percent of office workers notified that they are being laid off or given the sack are downloading sensitive company secrets right under their bosses' noses.  "The damage that insiders can do should not be underestimated," says Bosnian.  "It can take just a few minutes for an entire database that has taken years to build to be copied to a CD or USB stick.  With a faltering economy resulting in increased job cuts, deferred promotions and additional stress, companies need to be especially vigilant about protecting their most sensitive data against nervous or disgruntled employees."  The most common types of data stolen, says Bosnian are customer and contact databases, with plans and proposals, product information, and access/password codes also frequently taken.

1 in 7 Executives Misstating Academic Credentials, says Liars Index

The Liars Index is a quarterly study conducted by Brookfield WI executive search firm Jude M. Werra & Associates.  It estimates the percentage of executives who are misstating their academic credentials on their resumes.  According to President Jude Werra, the study's index has varied from 6.06% in 2003 to as high as 23.3% in 2000.  The current estimate is 11.43%, but given the index's volatility the best guess is provided by looking at the the average over the past two years, which is 13.3%, or almost 1 in 7 executives fudging their education qualifications.  "Verification of education claims is an uncomplicated, but often overlooked, wise first step in considering candidates' representations," says Werra. 

Nonprofits Often Skip Volunteer Checks, Says Crime Victim Group

According to The National Center for Victims of Crime, most volunteer organizations do conduct some screening of volunteers but few conduct thorough background checks, including reference checking.  Over one-fourth do not conduct any background check at all.  Less than one-third utilize fingerprints.  The NCVC, basing its findings on a telephone survey of 517 nonprofit human service organizations, says most volunteer organizations are primarily interested in criminal history checking or a report of child or elder abuse, and for them references or credit history is not an issue.

Importance of Checking Job References Stressed

Checking job references would seem pretty straightforward.  Just contact the applicant's former supervisor and ask a few simple questions, right?  Not anymore.  Nowadays supervisors may face gag orders regarding references -- and be unwilling to say much if anything about a former employee for fear of a lawsuit.  Some will provide job titles and dates of employment, but nothing more.    According to J. H. Verkerke, an employment law professor at the University of Virginia, 70 to 80 percent of American companies now forbid employees from giving out detailed references.  Unfortunately, this can have terrible consequences for an employer.  An employee with violent tendencies may be hired or one who has a history of causing conflict in the workplace.  Proper criminal records checking and interviewing techniques are often the employer's best defense in the current environment.

Mississippi Now Requires Employers to Use E-Verify

Mississippi employers are now required to use the federal E-Verify system to determine whether new employees are authorized to work in the United States.  The Mississippi Employment Protection Act also provides that employers who terminate a U.S. citizen while continuing to employ unauthorized immigrants shall be liable for unlawful discrimination.  The use of E-Verify, however, may be used as a "safe harbor" for employers as a means of avoiding liability.  Our other website, Web Search Guides, covers these issues in more detail (Click on "Hiring Illegal Aliens). 

Proposed California Law Would Restrict Use of Credit Reports

A recently introduced California bill would severely restrict future use of credit reports for employment screening purposes.  California Law AB 2918 would prohibit an employer from obtaining a consumer credit report for employment screening unless the credit report is "substantially job related and the employer's reasons for the use of the report are disclosed to the consumer in writing" or "required by law to be disclosed to or obtained by the potential user of the report."

Falsified Resumes a Widespread Problem

Although definitive statistics are hard to come by, almost everyone in the employment screening and HR fields agrees that resume fraud is commonplace nowadays.  By one estimate about one in five resumes contains a misrepresentation or false statement, or omission of a significant detail.  According to a recent article in the Boston Business Journal, one of the most common resume lies is to stretch dates to cover up employment gaps.  Applicants often think that a period of unemployment will be viewed unfavorably so they may "stretch" their dates of previous employment to cover the gap.  Although such fibbing may seem minor, experts warn that it may signal worse falsifications or fraud to come once the applicant is on the job, and therefore should probably disqualify the applicant.

Small Business Fraud Increasing Nationwide

As recessionary forces pressure small businesspeople nationwide, another problem is growing -- fraud.  According to the Association of Certified Fraud Examiners, small companies lost an average of $190,000 last year due to fraud, including patent infringement, embezzlement, and product counterfeiting, among other types.  This is up from $98,000 the previous year.  In one case, a crook set up a phony website which was identical to that of a small business and used it to place huge orders from Office Depot, then had the bills sent to the small business owner he'd defrauded.  In another case, a bookkeeper used Internet access to a dozen small businesses' bank accounts to divert over $1 million to his own account.  According to the Association of Certified Fraud Examiners, small businesses are twice as likely as major corporations to be victimized by fraud, largely because small businesspeople often lack the time, knowledge, or resources to adequately protect themselves.