Screening Out the Walking Lawsuit

One of my law partners is fond of explaining that lawsuits do not simply "happen," but rather, they walk in on two legs and apply for work. The founding partner of our law firm, Ike Fisher, took this analysis one step further and concluded that employers could nearly eliminate their employment lawsuits, frivolous workers' compensation claims, government investigations and union drives if they would avoid hiring three types of employees: the "marginal employee," the "perpetual complainer" and the "unofficial supervisor." Clearly, employers should zealously seek to screen out such individuals using the most sophisticated and legally defensible tools. Of course, therein lies the rub-"lawfully" using tools in an era when many employers feel that they will run afoul of the law if they ask a candidate for much more than their name and current address.

Despite the flood of advertisements for new hi-tech applicant screening services, employers should implement five steps:

1. Determine the skills and qualities you want in a new hire, both for the company as a whole, and for each specific job group.
2. Determine the "risks" you want to avoid, such as employees with a propensity to engage in violence against employees and customers.
3. Select the "tools" to achieve these goals, including an effective employment application, interview questions, drug testing or criminal and credit checks.
4. Throw out questions and screening tools you don't need.
5. Devise a "lawful" means to use these tools.

As the first step to lawfully improving pre-employment screening efforts, an employer should confer with its own employees and other industry employers in an effort to determine its goals and which questions, screening tools and background checks are effective. More is not necessarily better. Narrow down the information you will genuinely use. As an example, not every position warrants a criminal or consumer credit check, and if you do not need an employee who speaks French, don't ask the question on a general employment application. 

Tailor the screening efforts to your operation. Employers have a legitimate interest in avoiding claims of negligent hire, supervision and retention based upon the employer having allegedly hired an employee whose unacceptable behavior should have come to the attention of the hiring employer. An employer should determine the criminal record and the general temperament of an employee who may be working in isolated circumstances or having substantial interaction with the public or customers. Similarly, an employer may have many reasons to learn about a candidate's driving history. Federal Motor Carrier Safety Regulations may require additional screening, drug tests and verification of skills. Work performed at airports, energy-related facilities and in numerous other settings may necessitate various levels of federal and state security clearances.

Some inquiries or tests are prohibited by federal or state employment and discrimination laws. Some lawful questions are unwise because asking the question may make it appear that the company is improperly considering unlawful factors. Even where the employer is seeking neutral information, if responses to these questions result in a disproportionate disqualification of applicants in a protected class, an applicant or an anti-discrimination agency such as the Equal Employment Opportunity Commission (EEOC) may claim that the facially neutral inquiry unlawfully adversely affected a protected group. An employer will then have to prove that there is a legitimate business reason to use the information. An employer should therefore limit the inquiries and investigative tools used to those which logically predict success on the job and protect the company's legitimate interests. If a more controversial and invasive screening tool, such as a consumer credit report, does not seem to assist the employer in hiring for a particular position, the employer should consider saving the cost of the inquiry and the potential legal challenges. 

Drug testing is widely accepted by employees and employers in almost all industries and occupations. Drug testing is lawfully required for certain jobs. If a construction employer does not drug test applicants, the company may become the "employer of choice" for drug users because most of its competitors require drug tests. The tight labor market does not justify looking the other way. Under the Americans with Disabilities Act and most state anti-discrimination laws, a confirmed positive urinalysis drug test result is a "silver bullet" defense to a discrimination claim. Pre-employment alcohol testing is generally not lawful. Properly conducted hair testing is reliable and lawful in many states; however, urinalysis continues to be more  widely recognized and may be mandated by state workers' compensation laws. Some employers prefer hair testing because the test may show a longer history of drug usage (months versus days). Others prefer the wider recognition of urinalysis testing and prefer to learn only of "recent" drug use.

In an age of increasing identity theft or theft of employer and customer trade secrets and confidential material, many employers now conduct criminal, credit or consumer credit investigations. There is a great deal of debate among employers as to whether a poor credit record predicts a greater propensity for employees to engage in inappropriate workplace behavior. Certainly, employees handling customer financial information or who have financial responsibilities within the company would logically seem to be candidates for some type of credit checks. Likewise, criminal checks may be appropriate. It is largely a matter of employer preference as to whether to extend such checks to positions not involving customer safety, financial responsibilities or access to customer and employer credit information. For EEO-law reasons, it is best to conduct credit checks where the position has access to such sensitive information, financial assets or other removable valuables.

Once an employer has developed its goals and specific information required, it should consider the potential sources from which it may seek information: interviews, former employers, personal references, character references, driving records, vehicle registration records, bankruptcy proceedings, social security records, property ownership records, military records, sex offender lists, incarceration records, drug testing records, professional licensing records and workers' compensation records. Obviously, some of this information may be prohibited at the pre-employment stage or may not be grounds to exclude one from employment.

In addition to these potential sources, an employer's best screening tool remains the employment application and interviews. 

Employment Applications

Even in the construction setting, the employer should require every candidate to completely and accurately fill out an employment application and should then carefully review the results. No matter how desperate an employer is to fill a position, he should think twice before hiring a candidate who has held six jobs in five years, been fired twice and listed abusive supervisors or "poor management" as a reason for leaving others. An employer should consider including questions such as the following:

1. Have you ever committed or been convicted of a crime that has not been expunged, annulled or sealed? If so, please state the nature of the conviction (misdemeanor or felony; type of offense) and when and where it occurred.
2. Have you ever had a government security clearance? If yes, is it still in force? If not still in force, why not?
3. Have you ever been previously bonded? If yes, is it still in force? If not still in force, why not?
4. Have you ever been known by another name?

Do not accept a resume in lieu of the application, or allow the applicant to put "see resume" on the application. Many employers have found that the word "resume" is synonymous with "fiction writing." Include a statement on the employment application that the information is absolutely true and the candidate understands that they will be disqualified for hire, or subsequently terminated after hire, should information be found untrue or inaccurate. Ensure that the candidate signs the application, and if he or she refuses to sign it, you should refuse to consider the application further.

Examine the application carefully for scratch outs of important items, P. O. boxes for addresses or 800 numbers for phone numbers, blank responses to questions about criminal convictions, information missing from employment history or gaps in employment history, an apparent inability to stick with a job for a reasonable time period, failure to sign the application and victim-like responses to questions as to why the applicant left prior jobs.

Train supervisors to aggressively interview candidates. Supervisors should understand that their job is both to "sell" the job to the applicant and to learn as much about the applicant as possible. Many employers interview "backwards." They tell the applicant about the organization and the job, and then leave time for only a few cliché questions. The better approach is to ask open-ended questions that require the applicant to do the talking so that they may reveal such "toxic" traits as a lack of respect for authority, victim-like thinking, the inability to get along with supervisors and co-workers, refusal to take responsibility and a poor work ethic. Numerous good questions come to mind, including:

1. What are some of the things you wish to avoid in a new job? What are you looking for in a new job?
2. What do you think of your current supervisor?
3. How do you think your current supervisor will respond to my request for a reference?

Of course, there are questions you should avoid that may indicate or appear to indicate an intent to consider unlawful factors in making hiring decisions, including asking about age, ancestry, racial or ethnic background, plans for a family, who will take care of children, religious beliefs, health condition, workers' compensation history or conditions not related to the applicant's ability to perform the essential duties of the job. On the other hand, it may seem strange to an applicant if the interviewer woodenly states that they cannot talk about family or church. Many married or church attending candidates may very well want to talk about family or church involvement, and it is not per se illegal to engage in such discussions. The employer should simply ensure that it does not appear that it is considering a woman's childbearing plans or a candidate's religious beliefs in making their decision.

Reference Checking

Unfortunately, the legal profession has made it increasingly difficult to obtain information from former employers, except where required by law, such as Federal Motor Carrier Safety Regulations. Nevertheless, an employer should attempt to reveal a candidate's work experience and why they left a former employer. Some former employers will talk if provided a release signed by their former employee. Many employers adopt a blanket approach of simply stating the positions held and dates worked by a former employee. Other employers simply state that they do not respond to inquiries. If an employer regularly hires applicants who have worked at a select set of former employers, such as other area contractors, it is worthwhile for the employer to develop relationships with these former employers. An employer may find that its competitors would be more forthright in responding to reference checks if it provides information. Common sense guidelines should be followed such as providing only truthful and verifiable information and seeking to avoid making inflammatory statements. 

Fair Credit Reporting Act (FCRA) and Comparable State Laws 

Where an employer seeks to obtain information directly from former employers, state or local criminal repositories or other firsthand sources of information, the requirements of the FCRA and similar laws are generally not triggered. However, anytime the prospective employer utilizes a third-party agency to obtain information, it must comply with the FCRA and similar laws including the requirement to obtain an authorization form from employees which clearly states that the information is being obtained. For investigations involving outside interviews, the authorization form must specify such an investigation, and advise a candidate of his right to request disclosure of the nature and scope of the inquiry and a summary of his rights under the FCRA. If the company does not hire an applicant based in whole or in part on any other kind of FCRA-covered report, it must give the person a copy of the report prior to taking adverse action and must provide additional information regarding the consumer reporting agency after the adverse action.

Each state's laws vary, and an employer is wise to consult with labor counsel regarding that state's unique rules. However, common sense interviewing remains an employer's most effective screening tool.

 

Construction Business Owner, August 2006