“Hiring Right the First Time
and Avoiding Costly Mistakes”
Presented By: Gurdon Blackwell,
Regional Vice President
April 19, 2012
Who will star in your next big movie?
 You are a big time Hollywood executive. You need to find the next
big star to play the leading role in your upcoming blockbuster!
 You want to make sure you hire the best leading actor and actress
to make your movie a huge success.
 Can you guess the Star from their resume?
Who will star in your next big movie?
 Resume: Resume: Highest paid actor on television, earning $1.8
million per episode. Golden Globe award winner. Starred in
Platoon, Eight Men Out, Wall Street, Major League and dozens
more.
 Booked for second degree assault, menacing and criminal
mischief. Held with no bond.
Who will star in your next big movie?
 Resume: She began her career as a Ford Model and appeared in
over 60 commercials. Starred in 23 movies Disney’s the Parent
Trap to Herbie Fully Loaded. Is a recording artist as well.
 Arrested for felony, probation violation and grand theft.
Who will star in your next big movie?
 Resume: Nominated for 2 Oscars and has another 20 awards to
his credit. Has appeared in 74 movies and is best known for his
role in Iron Man, Sherlock Holmes and Tropic Thunder.
 Arrested numerous times on drug related charges including
cocaine, heroin and marijuana. Also for trespassing and a
concealed weapon. Spent nearly a year in a substance abuse
treatment facility.
Industry Facts
 According to the Workplace Violence Research Institute, negligent
hiring costs U.S. businesses in excess of $20 billion annually.
 Nearly 45% of potential employees have either a criminal record,
bad driving record, worker’s compensation claim or a bad credit
history.
 Nearly 33% list inaccurate dates of employment by more than
three months.
 9% of job applicants falsely claim they have a college degree, list
false employers, or identify jobs that don't exist.
Source:
www.americandatabank.com/statistics.htm
Resume Inflation: 2 Wrongs May Mean No Rights, by Barbara Kat Repa, Nolo.com
If Background Checking Is Not Required By Law,
Why Do It?
Accuracy
Confirm the applicant is accurately representing him / herself.
Productivity
Ensure the person is really qualified for and can perform the job.
Safety
Ensure the person does not pose a threat of harm to co-workers,
patients and the public.
Legal
Minimize the likelihood of litigation and large jury verdicts.
Potential Legal Action By Employees
 Jury Verdicts
 Negligent Hiring / Retention
Negligent Hiring / Retention Cause of Action

Hires or retains an “incompetent” employee

Knows or should have known the employee was unfit to do
the job

Acts in a negligent manner (or fails to act) by breaching its
duty to maintain a safe workplace
The injury caused must have been foreseeable, and proximately
caused by the employer’s negligence.
Jury Verdicts

Employers lose 72% of all negligent hiring suits.

Employee violence

$46 million verdict against Home Health Care Company in New
Jersey

$30 million verdict against national retailer

High risk situations where employee has access to customer homes
(e.g., deliveries, home care, home demonstrations/cleaning)

Post 9/11: Look at employee’s level of supervision, amount of
contact with the public and access to safety sensitive information.
Statistics provided by: http://www.americandatabank.com/statistics.htm
Best Practices
Employment Application Process
 Resume / Cover Letter
 Employment Application Form
 Interview
 Conditional Offer of Employment
 Background Check
Preventive Tip:
Background Checking should be narrowly tailored to obtain
job-related information with respect to the position at issue.
Best Practices
Minimize Litigation Risks By Job Applicants’ Pre- and Post-Adverse Action
 In Pre-Adverse Action Notice, reveal the nature of the
information received from the CRA.
 Include with this notice a copy of the report and notice of
rights as required by FCRA.
 Give a short but reasonable period of time to provide
information that would explain the discrepancy, omission or
misrepresentation.
 If employee is unable to do so, take adverse action and
follow FCRA requirements.
Best Practices
Other Preventive Strategies
 Look for red flags in the application process and follow-up
on them.
 Have job applicants sign statement on employment
application acknowledging that providing false information
is grounds for disciplinary action up to and including
termination.
 Consider centralizing verification procedures.
Resume / Cover Letter
 Recent Studies suggest that more than 40% of all job
seekers lie on their resume.
 A disturbingly high degree of misinformation concerning
past employment and educational background.
 Information obtained during the application process must
be tested and validated.
Statistics provided by: http://www.americandatabank.com/statistics.htm
Employment Application Form
 Review for legal compliance (e.g., question regarding
criminal convictions).
 Have good disclaimer language, including language that
false or misleading information constitutes grounds for
immediate termination.
 Require applicant to complete entire form, and sign and
date it (don't just allow applicants to attach their resume
or leave sections blank).
Conditional Offer of Employment

If you offer a position, make sure it is conditional on the
successful completion of a background check.

Conduct a thorough background check tailored to the
particular position.
If You Use An Outside Vendor,
You Must Comply with the FCRA

The Federal Fair Credit Reporting Act (“FCRA”) directly affects
an employer’s ability to obtain background information on
applicants and current employees through contracts with
third-party “consumer reporting agencies” (“CRA”).

Vendors that conduct background checks are CRAs.

The FCRA regulates the circumstances under which
employers can use CRAs to obtain background information
and to rely on that information to make employment
decisions.
State Laws Create Additional Compliance Issues

Some states have fair credit reporting laws that have
more stringent requirements than the FCRA (e.g.,
California).

States have other laws that also limit the use of
information you can obtain and how to use it once it is
obtained (e.g., New York, criminal convictions and
arrest records).
“What Types of Background Checks Are
Appropriate for my Company?”
Consider the menu of options that are
available…
Menu of Background Checking Options
Includes, but is not limited to:
 Social Security Trace
 Department of Motor Vehicle
Reports
 Consumer Credit Reports
 Substance Abuse Testing
 Criminal Conviction History Search
 Sexual Offender Search
 Social Media Screening
 Office of Foreign Asset Control
 Prior Employment / References
 Educational Verification
(OFAC)
 Vigilance / Recheck Program
Avoid Cases of Mistaken Identity
 Social Security Trace
 Check Names Retrieved on Report
 Address Information
 Make sure the information you obtain is for the correct individual.
Criminal Conviction History Search
Type of Information to consider:
 Applicant’s Name
 Jurisdiction
 Docket Number
 Indictment Number
 Arrest Date
 Reason for Arrest
 Disposition Date
 Disposition
Criminal Conviction Information
Factors to Consider:
 The seriousness of the offense
 The date the offense occurred
 The person’s age at the time of the offense
 Evidence of successful rehabilitation
 General lack of “good moral character” is insufficient
Consumer Credit Reports
The type of information to consider:
 Number and List of Accounts
 Number of Accounts with Negative Information
 Number and List of Accounts that have Placed the Applicant’s
Account for Collection
 Public Records
 Total Outstanding Balances
 Outstanding Balances and Payment History by Account
Why Should A Company Conduct Drug Testing
According to the 2010 National Household Survey on Drug Abuse (NHSDA) approximately:
 The majority of (65.9%) illicit drug users 18 and older are employed full
or part time… that's approximately 19.6% of the working population
(full- and part-time workers combined).
 The federal government reported that drug abusing employees, when
compared to non-using workers, are:
•
•
•
•
More likely to change jobs frequently.
More likely to be absent from work.
More likely to be involved in a workplace accident.
The U.S. Navy estimates each drug user costs his or her employer an
average of $6,600 annually more than non-substance abusing
co-workers.
Pre-Employment Substance Abuse Testing
Most Tests Screen for the Following Drugs:
 Cannabinoids (THC)
 Cocaine
 Amphetamines
 Opiates
 Phencyclidine (PCP)
 Barbiturates
 Benzodiazepines
 Methadone
 Propozyphene
Department of Motor Vehicle Reports
The type of information to consider:
 Current status of license
 History of speeding, reckless driving, careless driving, DUI,
DWI, etc.
 All suspensions with dates and causes of said suspensions
Social Media Screening
66 hours a month on
the Internet (not at work)
80%
Almost
of US recruiters
check reputational data online.
66 hrs
Source: http://www.dailycognition.com/index.php/2010/03/13/interestinginternet-statistics-from-2010-onwards.html
Social Media Screening
Criminal
searches tell
you what
they did
Social Media
tells you what
they are
doing
And what
they were
caught doing
Sometimes
things they
haven't been
caught doing
Social Media Screening
 Catch 22
NOT USING SOCIAL MEDIA?
• Not using publicly-available information to prevent hiring someone who committed
[violence at work] puts the company at risk of being accused of negligent hiring
practices.
USING SOCIAL MEDIA?
• Looking at Protected Class Information risks accusations of discrimination.
 Times Have Changed
• Used to be that when something happened, “he was a quiet, nice guy – I’m shocked!”
• Now: “If only someone had connected all of the dots.”
What Can Social Media Tell Us?
Conclusions

Employers should get to know the people they intend
to hire before making the decision to hire.

Background checks can be conducted effectively
without violating employee rights.

Employers that fail to do an adequate background
check subject themselves to legal liability.
“Hiring Right the First Time
and Avoiding Costly Mistakes”
Presented By: Gurdon Blackwell,
Regional Vice President
April 19, 2012