Walking the Fine Line Between Legal Background Checks and Liability for Employee Conduct

When an employer is hiring a new employee, it must engage in a balancing act between protecting the interests of its customers, with the rights of the prospective employee. Under Ohio law, an employer may be held liable under a theory of negligent hiring for injuries sustained by customers or other third parties for injuries caused by an employee who is negligently hired. However, federal and state law place certain restrictions on the types of inquiries and background checks employers can undertake relative to those prospective employees.

Every employer should endeavor to understand these competing interests. A claim for negligent hiring under Ohio law has the following five elements: (1) the existence of an employment relationship; (2) the employee’s incompetence; (3) the employer’s actual or constructive knowledge of such incompetence; (4) the employee’s act or omission causing plaintiff’s injuries; and (5) the employer’s negligence in hiring or retaining the employee as the proximate cause of plaintiff’s injuries. See Evans v. Ohio St. Univ., 112 Ohio App.3d 24, 739 (10th Dist) 1996. With respect to the second element, incompetence relates to an employee’s lack of ability to perform the tasks the job involves. For example, if an employee is being hired as a delivery driver, but has a suspended driver’s license, they would be considered incompetent for that job.


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Complicating this analysis, is the fact that some courts have pointed to things such as alcoholism, mental illness or past violent behavior as potentially establishing an employee’s incompetence. See Radcliffe v. Mercy Hospital Anderson, 997 WL 249 (1st Dist) 1997. Inquiring about issues such as alcoholism or mental illness, however, potentially implicates the Americans With Disabilities Act, which has provisions that limit an employer’s ability to ask questions regarding potential disabilities during the hiring process. Both alcoholism and mental illness potentially constitute disabilities.

The Americans With Disabilities Act provides that prior to making an employee an offer, an employer may not ask questions related to whether an applicant has a disability. Employers are also not allowed to ask questions about disabilities in general, but can state the job requirements and ask the applicant whether they can perform those requirements with or without a reasonable accommodation. Likewise, an employer cannot request a medical examination prior to making an offer.

Once an employer makes an offer to an employee, however, they are allowed to undertake a broader scope of inquiry, so long as they do so with all applicants. Employers cannot single out individuals for post-offer inquiries based on the employer’s perception that an employee may have a disability. Rather, these post-offer inquiries must be a standard procedure. Aft er an offer of employment has been made, an employer may also subject the applicant to a medical exam which can include drug testing. The employer may not withdraw employment based solely on the discovery of some type of disability, but, rather, can only withdraw an offer if it discovered that the disability would prevent the applicant from performing essential duties of the job or because the applicant poses a significant risk of causing harm to themselves or others.


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It is unclear whether negligent hiring claims require an employer to perform a background check. In Stevens v. A. Able Rents Co., 101 Ohio App.3d 20 (8th Dist. 1995), the court held that there was a genuine issue of fact as to whether or not the employer was negligent because it failed to contact a previous employer who knew about the prospective employee’s drug use. Contrast that holding with Whitt v. Country Club Apartments, 1999 WL 576051 (6th Dist. 1999), which stated that an employer is only obligated to conduct a background check if there is reasonable suspicion that would give rise to the necessity to do so.

If an employer is going to undertake a background check, it is important to understand that the Federal Credit Reporting Act sets forth certain requirements for use of credit or consumer reports in the hiring process. See 15 U.S.C. Section 1681(b).

First, the employer has to submit a certification to the consumer reporting agency that they will only use the report for purposes allowed under law. Second, the potential employer must disclose in writing to the applicant in a clear and conspicuous manner that a consumer report may be obtained for employment purposes. The consumer must then authorize, in writing, the procurement of that report. Finally, if the employer is going to take an adverse action based on information contained in that report, the employer must provide a copy of the report and a description in writing, setting forth the consumers’ rights under the Federal Credit Reporting Act. Th is last requirement is designed to protect the consumer or applicant from any incorrect information in their consumer report and give them the opportunity to correct information or explain it to the potential employer. Richard N. Selby II 


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