"Due Diligence & Background Checks"
April 2018
The Talon Shield
At Talon Companies, we assist companies of all sizes in identifying and securing their most valuable assets. Business owners agree: their people are their most important assets. Whether it be a salesman, a CFO, or an entry-level technician, the role that person will play is vital to your day-to-day business.

So how do you secure your greatest asset, the people within your organization? Starting off with the right person in the right position is absolutely essential. According to FBI statistics, nearly one-third of adults in the United States today have a criminal record. While many of those records may not be pertinent for some industries or specific jobs, it is important for you to be able to make informed choices about who you are hiring.

Did you know…

  • Employers lose approximately $600 billion annually due to asset misappropriations, corruption, and fraudulent statements.
  • 30% of small business failures are the result of crime.
  • The incidence of employee theft is 15 times greater than external theft.
  • 53% of resumes and job applications contain falsifications.

It quickly becomes apparent that a company’s greatest asset – its own employees – can also be a company’s greatest liability. Employment screening is a critical tool for organizations of all kinds, to help you lay the foundation for a secure work environment.

Types of searches included in employment screening will vary depending on industry and the position for which you are hiring. Varying levels of checks may include one or more of the following commonly requested searches:

  • Criminal Court Records
  • Civil Court Records
  • Professional License Verification
  • Education Verification
  • Professional and Personal References
  • Previous Employment Verification
  • Driving Record

Additionally, more and more employers are utilizing social media in both the recruitment and screening process. While social media profiles should not be relied on for conclusive decision-making about a candidate, they can sometimes reveal additional detail not found in traditional background checks. For example, the subject of a recent background check had posted on his Facebook profile about lessons he had learned while spending the night in jail. Further details noted in the comments led to the confirmed identification of a criminal record for assault, in a state where the individual had not otherwise been known to live or work.

Additionally, from both an ethical and business standpoint, every employer seeks to avoid violent situations in the workplace. Federal legislation (as well as some individual state laws) provide for compensation to victims of workplace violence if a court deems that the employer was able to, but did not, prevent the incident from occurring.

Consider these statistics relative to workplace violence:

  • Nearly 2 million American workers report having been victims of workplace violence each year (and many cases go unreported).
  • 500 workplace injuries reported in the US in 2016 were a result of homicide, 13% of which were perpetrated by a co-worker.
  • Employers lose an estimated 1.8 million work days each year (not including days covered by sick time and annual leave) due to workplace violence.

Examples of actual negligent hiring suits:

  • Currently pending in Louisiana: A young boy was raped by an elementary school janitor. The janitor was convicted and sent to prison, but the parents recently filed suit against the school district for negligent hiring, alleging that there were elements of his background that should have prevented him from being hired to work at the school.
  • An employee in Texas was killed on the job by a co-worker. The negligent hiring suit filed by the family claimed that the employer failed to conduct comprehensive background checks on their employees, and in 2016 the family was awarded over $1 million.
  • Less than three weeks after being hired, a driver for a timber company was involved in a deadly accident. The family of one of the individuals killed in the accident sued the company for negligent hiring, and they were awarded over $7 million in damages.
  • A home health care company was ordered to pay $26.5 million to the family of a patient who was murdered by one of their employees. A background check would have shown that the applicant had a felony criminal record.
While there is no silver bullet when it comes to avoiding or prevailing in any type of lawsuit brought against your company, any employer who utilizes a sound standard of employment screening demonstrates a level of due diligence that can prove to be a critical factor should a negligent hiring suit arise.

Background checks aren’t just for employees. The Bureau of Labor Statistics estimates that more than one-third of the workforce in the United States today involves an “extended workforce.” These non-traditional employer-employee relationships can include multiple job holders, on-demand or as-needed workers, freelancers, temporary workers, independent contractors, consultants, and other types of workers in alternative work arrangements. However, the same types of exposure can result from these “extended workforce” members.

If you don’t have any employment screening protocols currently in place, talk with your legal counsel first. They can help guide you in setting up employment screening that is compliant with federal and local legislation. For example, the Fair Credit Reporting Act requires employers to obtain specific written consent from applicants before conducting a background investigation, as well as to disclose specific information to the applicant if adverse action is taken because of something in the background report.

If you do currently screen, consult with your employment screening professional regularly to be sure you understand the types of checks you are conducting, the reasons behind them, and the results that you are getting. For further information about employment screening services available from Talon, contact Shelley Miner at .

Ron Williams, CFS
United States Secret Service-Retired
Talon Companies