It is one of the worst nightmares a staffing firm can face. A recently assigned temporary financial consultant physically assaults another employee in the client’s office. A receptionist just placed at a dental office is operating an identity theft scheme using patients’ information. These scenarios are markedly different from acts of negligence by these same employees. Acts of negligence are almost always covered by the standard errors and omissions, general liability, and other insurance coverage that every staffing firm should have. However, intentional harmful acts committed by employees are almost never covered by insurance.
Staffing Firms: Take the Necessary Precautions
If a customer is damaged or injured as a result of a temporary employee’s intentional act, it is all but assured that the staffing firm will be sued for compensation. The only way a staffing firm can be adequately protected from these types of lawsuits is by taking a comprehensive approach to applicant screening. It is important that the mission of the staffing firm’s screening procedures is clearly stated. If screening for criminal records, state the years that will be checked and the applicable jurisdictions.
When it comes to the actual screening process for applicants, it’s imperative that all available avenues are explored. Former employees, when available, should be asked about honesty in the workplace as well as reliability and performance under stress. State licensing claims should be fully investigated and confirmed with documentation, when possible. In certain instances, the application itself must be thoroughly examined for potential warning signs, such as consistent gaps in employment or short employment tenures.
Avoid using vague language in any marketing materials that may imply a higher level of screening than is typically provided. Often times, a staffing firm will make broad claims about its screening policies that may not apply to every applicant or every industry. That’s important because a client’s interpretation of certain marketing language may constitute grounds for a breach of contract lawsuit. And although the marketing fluff is usually standard procedure for staffing firms, it can present a legal liability that is easily avoided.
Documentation is Key
Often, a negligent hiring lawsuit may occur months or years after an applicant was initially screened. Therefore, it is extremely important that every step of the screening process is documented as completely as possible. All contact with references, employers, and any appropriate licensing agencies should be noted. Any failed attempts to contact references or the refusal of former employers to offer information should also be noted.
In the event that legal action is brought, the ability to easily reference documented materials will prove invaluable. It will make mounting a solid defense much easier and, in some cases, may dissuade the plaintiff from pursuing the matter.
Pay Now, Gain Later
The moral of the story here is that a sound and thoroughly documented screening process is well worth its costs, both administrative and financial. By taking the time to develop and implement a consistent and detailed screening process, a staffing firm can virtually eliminate exposure to future negligent hiring lawsuits. The suits may inevitably be brought, but the potential damage they represent can be greatly minimized, if not entirely negated.
Although many staffing firms hesitate to implement an across-the-board screening policy, the legal advantages are undisputed and the competitive advantage it offers may be coming increasingly more important to potential clients. In today’s world of sensationalized media coverage and ‘no-fee-unless-we-win’ legal representation, clients are trying to protect their interests as well. If a prospective client knows that a staffing firm is doing everything possible to screen for troubled applicants, then it stands to reason that that staffing firm will be an attractive option moving forward.