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Business Observer Friday, Oct. 8, 2004 17 years ago

Limit Exposure to Vicarious Liability

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There are steps employers can take to minimize their exposure to vicarious liability and claims for negligent hiring, retention and entrustment, says John-Edward Alley, a Tampa attorney ranked as one of the "Best Lawyers in America."

Limit Exposure to Vicarious Liability

By David R. Corder

Associate Editor

There are steps employers can take to minimize their exposure to vicarious liability and claims for negligent hiring, retention and entrustment, says John-Edward Alley, a Tampa attorney board certified by the Florida Bar in labor and employment law and ranked as one of the "Best Lawyers in America."

He has simple advice he offers to clients:

"My focus always is on hiring the right employee in the first place," he says. "If you hire the right employee in the first place, then you don't have to worry about training them, becoming a problem employee, firing them and them possibly suing."

Alley and other lawyers in the Tampa office of Ford & Harrison LLP offer clients a checklist on how to minimize exposure to liability for vicarious liability and negligent employment claims. Here's a summary of that checklist:

× Create an employment application that requires applicants to list every employer for the past seven to 10 years, including a list of all supervisors' names. Be curious about omissions.

× Get signed permission from the applicant to gather information from other employers, educational institutions and references. The authorization should include an indemnification clause that protects prior employers contacted.

× Contact employers, supervisors and references. Ask questions about the applicant's competency, honesty, trustworthiness and reliability. Document the findings.

× Require discharged members of the U.S. armed forces to produce a copy of DD Form 214. It lists discharge status.

× Check the applicant's driver's license and driving record.

× Pay the fee required to conduct a criminal background check. Be careful, however. The federal Equal Employment Opportunity Commission screens pre-employment questions about arrests or convictions because a greater percentage of African-Americans and other minorities tend to have arrest records. The inquiry should be sufficiently job-related. So it may be best just to ask the applicant about crimes attempted or committed rather than arrests or convictions.

× Check references on employees recommended by employment agencies. Do not rely only on the agency's recommendation.

× Make reference checks on temporary employees required by the employer to interact with the public. Hold them to a higher threshold of reference checks.

× Complete the employment prescreening process prior to offering an applicant a job.

× Make employment contingent on a satisfactory reference check.

Alley's firm advises clients to take the following action with regard to existing employees:

× Be careful when offering employees "one last chance." The employer should evaluate that decision the same way a jury might decide in a negligent retention lawsuit.

× Hold employees who interact with the public to a higher threshold of scrutiny.

× Take immediate corrective action in any instance of sexual harassment.

× Be sure employee evaluations are accurate, and terminate employees who exhibit unfitness or incompetence.

× Re-evaluate, and perhaps recheck references, to determine an employee's fitness for a new job or transfer within the same company.

Employers also should be aware of a common myth about reference checking, Alley says. It is not illegal to ask a prior employer for information about the competency and trustworthiness of an applicant/former employee.

"People say you can't get former employers to say anything," Alley says. "I say, 'Hogwash.' Many employers are misguided. They are living in the Dark Ages. They're being terrified by employment law lawyers who know nothing about First Amendment law.

"Here's what they tell employers: 'You can be sued for defamation if you give information about a former employee,' " he adds. "That's absolutely true. You can be sued for anything. The fact you may be sued should not impact on whether you do the investigation. If don't do the investigation you can be sued for negligent employment."

There are strategies to use to persuade prior employers to release information, Alley says. Be sure to ask the applicant the reason he or she left the prior employment. Call the prior employer and state that reason.

"If (the applicant) gave a false answer, that prior employer will probably confirm or deny the information," he says.

If the prior employer remains reticent, then Alley offers the following advice: Fax a copy of the applicant's signed employment application to the prior employer, with all disclaimers to protect the prior employer.

"It not only authorizes the former employee to provide the reference information but directs the former employer to provide the information," he says.

If the prior employer still remains reticent, remind them that Florida law allows an affirmative defense against defamation when the prior employer releases employment information.

"The employer has statutory immunity over giving of a reference for a current or former employee unless the plaintiff can show by clear and convincing evidence that when the employer representative gave the information he or she knew it was false," Alley says.

If that still doesn't work, Alley suggests the hiring employer remind the prior employer about case law that has penalized companies for withholding information about a former employee's past misdeeds or criminal activities.

As a last resort, Alley says, the hiring employer may want to warn the former employer about its liability if the applicant subsequently commits an act that subjects the hiring employer to a claim of vicarious liability or negligent employment.

"It generally works," he adds.

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