New Jersey Courts have long recognized that employers may be held to be “vicariously” liable for the negligent acts of their employees while they act within the scope of their employment. The legal term is respondeat superior. But what about liability for a business, business owner, or manager that fails to properly vet an employee’s background? Can employers be found liable for this, too?
The answer is very frequently YES. Under a negligent hiring claim, employers may face direct liability for failing to exercise reasonable care in hiring or retaining employees whose backgrounds or conduct poses a foreseeable risk of harm to others.
What is Negligent Hiring?
Negligent hiring occurs when the employer creates by exposing members of the public – and their employees – to a potentially dangerous employee (see DiCosala v. Kay, 91 N.J. 159, 172 (1982)). An employer may be found directly at fault for employee conduct even when it falls outside of the scope of employment. For example, if an employer hires someone who sexually assaults or harasses a co-employee, a customer, or any other person who comes into contact with that employee while he or she is on-the-job, there may be a negligent hiring claim against that employer.
For a business or business owner to be found liable for negligent hiring, the person making the claim must show: “(1) that his/her employer knew or had reason to know of the particular unfitness, incompetence or dangerous attributes of the employee and could reasonably have foreseen that such qualities created a risk of harm to other persons and (2) that, through the negligence of the employer in hiring the employee, the latter’s incompetence, unfitness or dangerous characteristics proximately caused the injury.” (see G.A.-H. v. K.G.G., 238 N.J. 401, 407, 210 A.3d 907, 911 (2019)).
The statute of limitations for claims based on negligent hiring is two (2) years.
What can a business do to avoid Negligent Hiring?
Negligent hiring claims can be costly and damaging to a business. However, employer can put policies in place to help reduce the risk of a negligent hiring claim. Sound hiring and workplace practices can protect an employer’s business, and also increase compliance with New Jersey’s “ban the box” law (New Jersey Opportunity to Compete Act), the New Jersey Law Against Discrimination, the New Jersey Family Leave Act, the federal Family and Medical Leave Act and all other New Jersey employment laws.
The “ban the box” law bars employers from including a question on the initial employment application about criminal history, as well as asking about criminal history during the first interview. After those initial stages are complete, employers can and should inquire into the applicant’s criminal history to assess whether hiring the applicant is appropriate.
Pre-Hire Due Diligence
There are also several things that can be done before hiring anyone new, while still complying with the “ban the box” law. Businesses should conduct thorough background checks and always request a list of references from the applicant, and each reference should be contacted to inquire about past behavior in the workplace. Taking the time to speak with each reference further ensures that an employer is completing his or her “due diligence” before hiring anyone new. Employers should also be sure to standardize their screening process and keep records to ensure that if any questions are ever raised regarding the hiring of an employee, the employer will have a record of all vetting that took place prior to the employee being hired.
Ongoing Compliance and Supervision
Of equal importance, once an employee is hired, employers should have clear policies and procedures in place and provide ongoing training to all employees on a regular basis regarding anti-harassment and anti-sexual harassment policies in the workplace.
Every business should have an employee handbook, given to each employee. Employees should also be required to sign acknowledgements that they have read and understood the policies. As part of that, employers should have a standardized process for handling harassment related complaints in the workplace, taking care to keep detailed records of the complaints, who was involved, how the issues were addressed and ultimately resolved. While these practices are not 100% foolproof, they can go a long way to establishing due care on the part of a business if and when an employer is sued for negligent hiring.
Finally, as a last line of defense against negligent hiring claims, employers should strongly consider employment practices liability insurance. And as always, if there are any questions at all regarding negligent hiring claims, contact us
