Security Shredding and Storage - a shredding industry publication

Export Regulations Reduce Pre-hire Exposure to Liability

By Tom Hamilton, CPP, CPC
When it comes to hiring practices by small shredding companies, the best advice to follow is “better safe than sorry.”

By simply conducting two often overlooked pre-employment screening checks on potential hires, a company could save thousands upon thousands of dollars — and possibly even save the business.

With more people than ever seeking employment today, the workforce has become more unstable than ever. These changes in the labor market have brought hiring practices to the forefront of many in the legal community. In today's litigious environment, lawsuits are commonplace. Fortunately, most of us are not familiar with the legal term "negligent hiring practices" because most companies conduct at least some background checks when hiring new employees.

Many human resource managers are doing all they can in the hiring process to protect their company, their employees and their customers. Their goal: to reduce their company's exposure to liability.

Most of these businesses conduct a formalized due diligence when hiring new employees, which often includes a pre-employment criminal background check and verification of previous employment using third-party companies that specialize in such services. A criminal background check generally includes every county, state and federal jurisdiction of residence over the past seven years; if a crime was committed outside the candidate’s county or state of residence, it is possible that a criminal conviction may not be discovered. It is also routine to do pre-employment drug screening.

Once these checks are completed, most companies are comfortable that they have taken the necessary steps to ensure they are hiring a good person. Once hired, a company can also utilize the federal government’s free E-Verify program, an Internet-based system that compares information from an employee's Form I-9, Employment Eligibility Verification, to data from U.S. Department of Homeland Security and Social Security Administration records to confirm employment eligibility. The program determines whether the information matches government records and whether the new hire is authorized to work in the United States. More than 500,000 employers of all sizes have used the program, according federal officials.

Small shredding companies, however, may be more lax in their hiring procedures, simply because they want to avoid the expense, or possibly because they face an unexpected personnel shortage and need to quickly hire someone. Although most companies attempt to adhere to a specified hiring procedure, one area often overlooked is verifying that any person being considered is, in fact, the person they say they are. A Social Security verification check conducted by a third-party company should be sufficient.

Companies could reduce their exposure to liability by taking one other overlooked additional step — a sex offender check — in the hiring process. This inexpensive check has the potential of saving a company from huge liability exposure and perhaps some ugly publicity. That liability exposure usually comes from lawsuits filed for negligent hiring practices or gross negligent hiring practices.

The two legal terms, “negligence” and “gross negligence” can significantly effect the outcome of a lawsuit and can result in devastating publicity associated with a case.

Here are two scenarios.

Scenario number one: An employee is hired who, unknown to you, has a criminal record for sexual assault, perhaps 10 or more years ago. The individual is sent out to service shredding customers and will have regular contact with one or more female employees at customer locations. One day the individual sexually assaults a female employee of one of your customers. In addition to criminal charges being filed against the employee, a civil lawsuit could be filed against you and your company for negligent hiring practices. During the pre-trial discovery phase, the plaintiff’s attorney learns that a full criminal records check including a sex offender check was not conducted on the employee.

As a result, you could be guilty of negligent hiring practices. If this situation came to the attention of local media, it would undoubtedly result in bad publicity for your company. Had a sex offense check been conducted and discovered that the person had a history of the offense, you would have had two choices: not hire him for a legitimate reason or hire him and place him in a position that did not require him to come in contact with female employees of your customers and your staff.

Scenario number two: The same scenario as above, except a sex offender check was conducted and it found that the person had been convicted of sexual assault 15 years ago. He served five years in prison, and for the past 10 years had been a fairly good citizen with a fairly clean criminal record. You decide that this person deserves a second chance and you hire him.

Once on board, he proves to be a good employee so he is sent out to deal with shred customers on a daily basis. One customer he comes in contact with is an attractive female. After making a number of routine early morning stops at this customer’s location, he subsequently sexually assaults her. Once again, criminal charges are filed against the employee and your company faces a civil lawsuit for negligent hiring practices.

This time, however, the civil outcome will be much different. In the pre-trial discovery phase, the plaintiff’s attorney learns that a full criminal records investigation, including a sex offender records check, was conducted. You were aware of his past criminal acts and despite that history, he was put in a position to come in contact with the female employee. In this case, you would be guilty of gross negligent hiring practices because you knew of his past conviction and knowingly placed him in a position to come in contact with the woman.

If the case went to trial, a jury would likely award a much larger sum of money to the victim. This situation, however, would be so obvious that it would probably never see the inside of a courtroom. Your attorney would probably recommend a settlement to avoid further publicity. No doubt some of the details surrounding the case itself could end up in the media.

As standard legal practice, a plaintiff’s attorney will subpoena your employee’s file and maybe the files of all your employees to establish a precedence on the company’s hiring procedures. Attorneys for plaintiffs love to try their cases in the media and the press would have a field day with the two scenarios stated here.

The end result could be devastating to you and the company that you worked hard to build: huge legal fees; loss of work and productivity for yourself and perhaps other members of your office staff and management team; and the potential for lost customers, resulting in reduced revenues. More drastic steps might have to be taken, such as changing the name of the company or selling out at a much reduced price due to the negative publicity.

In both scenarios, the outcomes would not be good for anyone. You, your company and the victim would suffer greatly from such incidents that potentially could have been avoided had you spent as little as $4 to $6, the average cost for a sex offender records check.

In some businesses, owners and managers may be reluctant to spend the money to do it right the first time but they will always spend the money to do it over. Doing it over, though, usually costs more than would have been spent to do it right the first time. The problem in the two scenarios is that there is no chance to do it over. It should have been done right the first time.

Both scenarios may be extreme examples, but it only takes one incident to result in serious consequences. The time required to do two extra steps in the pre-employment hiring process could save not only thousands of dollars, but the business as well. Business owners have an obligation to take every step necessary to protect their employees, their customers and their customers’ employees. They also have an obligation to protect the shredding business they have built.

Ensuring a person's true identity through verification of their Social Security number or other means and requesting a sex offender check could be the best money a business will ever spend. Considering how little time it takes to perform these two steps and the small cost involved, businesses need to ask themselves if they are willing to gamble with their future.

Owners of shred companies have worked hard to build their businesses. With the potential risk involved and the cost of just one misstep in the hiring process, it makes good sense to take the extra steps to reduce a company's exposure to unnecessary liability.

When hiring a new employee, the things you should consider are simple: have I done all that is necessary to protect my customers and my business, and, in doing so, am I in full compliance with all the laws and regulations governing employment practices.

Tom Hamilton, CPP, CPC, is a senior managing consultant at Hamilton Consulting Services, Inc. in Houston, TX. Tom is routinely engaged by local, state and international companies, organizations and agencies to conduct Risk Assessments, Security Audits, Emergency Response Planning and other vital security related functions. He is also engaged as an expert witness in litigation proceedings. Tom can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. or (281) 398-7774.

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