In most states, employers are generally liable under the doctrine of negligent hiring when
- one of their employees causes harm to a third party (for example, a customer) and
- the employer knew or should have known of the employee’s risk to cause harm.
Employers are also liable if an employee causes injury and the employer would have discovered an employee’s potential risk of harm if it conducted a reasonable investigation.
While most states recognize a cause of action for negligent hiring (as generally outlined above), state laws differ a bit when it comes to specific standards for liability.
- For example, California law says that employers are liable if their negligence was a “substantial factor” in causing a victim’s harm.
- By contrast, Rhode Island law does not impose a substantial factor test and imposes liability simply if an employer did not exercise reasonable care in selecting a competent employee.
Note that employers can take certain steps to help avoid liability under a state’s negligent hiring laws, including:
- conducting criminal background checks of job candidates (if authorized under state law),
- including reference checks in a candidate’s screening process, and
- verifying a candidate’s work history.
1. What is negligent hiring?
Negligent hiring is a specific legal claim made by a person injured at the hands of an employer’s employee. The injured party could be a client of the employer or a coworker of the harmful worker.
In bringing these claims, injury victims assert that an employer is liable for their injuries provided that the employer
- knew or
- should have known of the employee’s risk to cause harm prior to staffing the harmful worker.1
These claims are based on a state’s “negligent hiring, supervision, and retention laws.”
Examples of causes of action in these cases include:
- a limousine company hiring a driver with a criminal record of sexual battery and sexual harassment and the driver commits sexual assault on a passenger.
- a restaurant employing a delivery driver with a horrendous driving record, and the driver negligently injures another motorist when making a delivery.
- a nursing home overlooking a job applicant’s criminal history of assault, and the applicant/employee later commits elder abuse on a resident.
2. Do different states have different negligent hiring laws?
Negligent hiring laws do slightly differ among some states. The main difference is that some states apply different standards for determining when an employer is liable for an employee’s actions or an employee’s unfitness.
For example, California law uses a four-part test for imposing liability:
- the employee was unfit or incompetent to perform the work for which he/she was hired,
- the defendant knew or should have known that the employee was unfit or incompetent and that it created a particular risk of harm to others,
- the employee’s unfitness or incompetence harmed the plaintiff, and
- the defendant’s negligence in hiring, supervising, or retaining the employee was a substantial factor in causing the plaintiff’s harm.2
In contrast, Rhode Island law chooses not to impose any type of “substantial factor” requirement for liability. The law rather states that an employer is liable under a theory of negligent hiring if it:
- hires, supervises, or retains an employee, and
- does so with knowledge of the employee’s unfitness, or after failing to use reasonable care to discover the unfitness.3
Further, Florida law treats the situation a bit differently. The state says there is a presumption against negligent hiring if the employer conducted thorough background checks/background screenings into an employee’s background during the hiring process.4
Note that other state laws focus on foreseeability, or whether an employer should have been able to foresee if a potential employee posed a threat to others or was likely to engage in dangerous conduct.
3. What are the damages in a successful negligent hiring claim?
If an injury victim is successful in bringing a negligent hiring claim, that party is entitled to compensation for his/her losses.
“Compensation” includes the employer (or its insurer) paying the victim for such items as:
- medical expenses and medical bills,
- lost wages,
- future lost earning capacity,
- property damage,
- out-of-pocket expenses,
- pain and suffering,
- disfigurement, and/or
- reduced quality of life.
Further, a plaintiff may try and recover punitive damages in cases where a defendant’s conduct was particularly wanton or reckless. Punitive damages aim to punish defendants and prevent similar acts in the future.
4. How can an employer avoid liability?
There are several steps that an employer can take to help avoid liability for negligent hiring, supervision, and negligent retention. Some of these include an employer:
- conducting pre-employment background checks and/or criminal background checks of job candidates (if authorized under state law),5
- including reference checks in a candidate’s screening process,
- reviewing a potential employee’s social media accounts,
- verifying a candidate’s work history,
- increasing the scope of a pre-employment investigation when making hiring decisions for positions where there is a greater risk of harm to the public or to co-workers,
- exercising a greater level of due diligence and using a more stringent duty of care when conducting hiring practices, and
- documenting all pre-employment investigatory efforts.
Employers that are unsure of the effectiveness of their hiring procedures should contact an experienced employment attorney for legal advice.
- See, for example, California Civil Jury Instructions (CACI) 426 – Negligent Hiring, Supervision, or Retention of Employee.
- See same. See also CRST, Inc. v. Superior Court (2017) 11 Cal.App.5th 1255; Liberty Surplus Ins. Co. v. Ledesma & Meyer Construction Co. (2018) 5 Cal.5th 216, Doe v. Capital Cities (1996) 50 Cal.App.4th 1038; and Government Code Secs. 815.4, 815.2 and 835.
- Mainella v. Staff Builders Indus. Servs., Inc. (R.I. 1992) 608 A.2d 1141.
- See Florida Statutes Section 768.096 (2021).
- Note that some states employment laws/hiring laws impose limitations in terms of inquiring into a job candidates’ criminal history before extending an offer of employment. For example, California’s ban the box law prohibits employers from inquiring into an applicant’s criminal history before making a conditional offer of employment.