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What is Negligent Hiring, and When is an Employer Liable? 

Posted by Inna Gorin | Sep 27, 2022

It happens more often than you might think – an employer hires a new employee who ends up causing harm to a customer or another third party. When this happens, the employee is clearly liable to the third party, but is the employer? 

Under the doctrine of negligent hiring, they can be. If an employer would have discovered a potential risk of the employee's hiring if they had performed a reasonable investigation before hiring, they are more likely to be held liable for negligently hiring the employee, and therefore vicariously liable for causing the victim's injuries. This determination, of course, depends on the specific laws of the state the employer is in. 

What is Negligent Hiring?

Negligent hiring is a claim that can be made against an employer for their employee's actions. To bring such a claim, the injured party must prove that the employer is liable for their injuries because they either knew or should have known of the employee's potential to cause harm before hiring them. 

For instance, if a daycare overlooked a job applicant's criminal history of sexual assault when hiring them, and that employee sexually assaulted another employee or one of the children that attends the daycare, the daycare would be liable for negligent hiring because they knew of the employee's risk of sexually assaulting someone.

Why Pursue the Employer?

It's not always enough to show that the person at fault is clearly liable for the victim's injuries. In order for the victim to actually receive monetary compensation, the party at fault must have the ability to pay. Unfortunately, it's. not uncommon for the tortfeasor, the negligent party, to be what's called "judgment-proof." This means that even though the fault is established and damages proven, the party at fault is unable to pay the award of judgment because they simply do not have the financial means to do so. 

Unlike individual defendants (employees), the employer is usually a commercial entity with assets or insurance policies in place to cover the damage award. They are, what you would call, "a deep pocket," a defendant with the means and the ability to pay. 

California Negligent Hiring Law

States do differ in how they apply the negligent hiring law. Some states use a different standard when deciding if an employer is liable for their employee's actions. These states might consider an employer liable for negligently hiring if it hired, supervised, or retained an employee actually knowing that the employee was unfit for the role or did not take reasonable care to discover if the employee was unfit for the role. Other states presume that if an employer has conducted a background check during the hiring process, they cannot be found liable for negligently hiring an employee. 

In California, courts use a four-part test to determine if an employer is liable. This test asks whether:

  1. The employee was incapable of, or incompetent to, execute the work they were hired to do,
  2. The employer knew or should have known that the employee was incapable or incompetent and that it produced a specific risk of harm to others,
  3. The employee's incapability or incompetence injured the plaintiff, and
  4. The employer's negligence in hiring, supervising, or retaining the employee was a significant cause of the plaintiff's injury. 

Damages in Negligent Hiring Cases

If a victim can successfully prove that the employer was negligent in their hiring, the employer or their insurer must pay the victim certain damages. These damages are known as compensatory damages and can be either economic (lost wages, property damage, medical expenses) or non-economic (disfigurement, reduced quality of life, pain and suffering). 

Victims might also try to recover punitive damages if the employer's hiring decision was exceedingly wanton or reckless. Punitive damages are meant to punish the employer for their actions and deter others from performing similar behaviors. In California, punitive damages are awarded in personal injury cases when the plaintiff can prove by clear and convincing evidence that the defendant acted maliciously, oppressively, or fraudulently. 

Plaintiffs will be awarded punitive damages for an employer's negligent hiring if they can prove that the employer's hiring practices were malicious (intending to cause the plaintiff harm or conducted with a willful and conscious disregard for the safety of others), oppressive (subjecting a person to cruel and unnecessary injury in conscious disregard of the plaintiff's rights), or fraudulently (made with the intent to conceal a material fact). 

How to Protect Yourself

Suppose the negligent acts of an employee have injured you. In that case, you may seek compensation from that individual's employer, especially if the employer knew or should have known their employee posed a potential risk to others.

Personal injury attorneys understand the complexities that a negligent hiring claim might present and will be able to explain the best course of action for your case. 

About the Author

Inna Gorin

Inna Gorin, the founding Partner of Injury Justice Law Firm modeled the Firm after her ideals and principles of what skilled, aggressive and tenacious representation of individual clients should embody. Ms. Gorin's mission is to level the playing field, and provide her clients with the same level...

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