Know the Facts!

FACT: Businesses failing to check the backgrounds of their employees are open to serious legal costs and customer service risks.

30% of business failures are due to poor hiring practices (Department of Commerce).
If recent incarceration rates remain unchanged, an estimated 1 of every 20 persons (5.1%) will serve time in a prison during their lifetime (Bureau of Justice Statistics).
A recent study found that 53% of job applications contained false information (SHRM - The Society for Human Resource Managers).
On average in U.S. businesses, at least half of all new hires do not work out (Fortune Magazine - Feb. 2000).

FACT: Negligent hiring complaints on the rise: Employers can and are being held liable for the willful misconduct of their employees, even if the employee's actions occur outside the scope or place of employment. This form of liability is defined by the legal theories of negligent hiring and retention.

Beginning in the 1980's, negligent hiring and retention claims have been on a rapid rise. This rise could only be perceived as part of a larger trend as courts continue to show increasing interest in determining guilt and compensating the victim. Actual Negligent Hiring Cases.

Nursing home liable for $235,000 for negligent hiring of unlicensed nurse with 56 prior criminal convictions, who assaulted an 80 year-old visitor (Deerings West Nursing Ctr. v Scott).
Furniture company liable for $2.5 million for negligent hiring and retention of deliveryman who savagely attacked female customer in her home (Tallahassee Furniture Co. v. Harrison ).
Employer settles a $2.5 million suit held liable for negligent hiring and entrustment of intoxicated security guard, who had traffic accident in company vehicle which killed another motorist and himself (Butler v. Hertz Corp.).
Vacuum cleaner manufacturer liable for $45K because one of its distributors hired a door-to-door salesperson with a criminal record who raped a female customer in her home; courts stated: "Manufacturer should have required a pre-hiring screening for its distributors" (McLean v. Kirby Co.).
Store customer detained by security guard as suspected shoplifter and injured while being restrained awarded $10 million in damages in suit against store claiming negligent hiring (Porter v. Proffitt's Inc.).

FACT: Costs reduced by conducting background screenings

The average organization loses more than $9 per day, per employee and 6% of its annual revenue to fraud and abuse (Association of Certified Fraud Examiners).
It costs $7,000 to replace a salaried employee, $10,000 to replace a mid-level employee and $40,000 to replace a senior executive (Recruiting Times).

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