Do I really need to bother with background checks?

Excerpted from Delaware Employment Law Letter, written by attorneys at the law firm Young, Conaway, Stargatt & Taylor
June 25, 2004

Q: My business requires going into people's homes to read utility meters and work on appliances. My human resources director says we should do criminal background checks on all job applicants. What do you think?

A: With the country's heightened sensitivity to national and personal security issues, background checks have become more important than ever. In my view, any business that employs people who have regular contact with the public, particularly away from the company's offices, should do background checks on all job applicants to protect itself against claims for negligent hiring or retention. Background checks should also be done on employees who will handle financial data or other sensitive information. When you consider the time and expense associated with recruiting, hiring, and training employees, the idea of verifying background details just makes good sense. With that in mind, let's outline some general considerations regarding background checks.

Q: Which applicants should I do background checks on?

A: You don't have to do background checks for everyone, but your reasons for doing them or not doing them should be related to legitimate business interests. For example, if your company has 120 employees, 40 of whom read utility meters and work on appliances in customers' homes and 80 of whom are administrative personnel, you may have a legitimate reason for investigating only the meter readers and appliance repair personnel. But if you investigate one meter reader or appliance repair person, you should investigate all of them.

Q: How can I do background checks myself without paying an outside agency?

A: Some applicants have a very casual relationship with the truth. The information you obtain from them on your employment application before an interview allows you to "investigate" their truthfulness during the interview.

Start with the job application. Most applications seek information about a prospective employee's education and criminal history along with his social security number. Using a social security number and with the applicant's consent, you may be able to obtain court and criminal records; credit reports and bankruptcy filings; driving records and vehicle registrations; records relating to workers' or unemployment compensation claims; military service records; and property ownership and state licensing records. Reviewing those documents before the interview puts you in the best position to ask informed, meaningful questions about the applicant's past.

Q: What about checking references listed on the employment application?

A: People who agree to be identified as references for a job applicant will obviously be inclined to speak favorably about him. But specific questions can often yield useful, job-related information, such as whether the facts provided in the application fairly represent the candidate's former responsibilities and accomplishments, how he handles anger and frustration, or how he resolves conflicts.

Q: How about drug tests?

A: You can ask applicants to submit to a test for illegal drugs at any time. But be aware that a test intended to identify any medications or substances other than illegal drugs violates the Americans with Disabilities Act.

Q: Can't I just use a polygraph test?

A: Probably not. There's a federal law that severely limits your ability to use polygraphs. Bottom line: Don't do it.

Q: What red flags should I look for on an employment application?

A: In a word, gaps. That is, unexplained lapses in a person's life or work history. Gaps are a problem because without knowing where someone lived, worked, or went to school, you can't check all the counties in which she might have a criminal history (criminal records are kept county by county).

Q: What should I not ask an applicant about his background?

A: You shouldn't ask about arrest records. An arrest isn't the same thing as a conviction. Inquiries about arrests tend to discourage members of protected groups from seeking jobs and encourage members of those groups to answer your questions falsely because they fear they'll be penalized for truthful responses.

Q: What are the potential liabilities for failing to conduct a background check?

A: Generally, an employer that fails to investigate the background of an applicant who's hired for a risk-sensitive position may be liable for negligent hiring or retention if the employee is later involved in harmful misconduct or illegal activities. Punitive damages for those cases can run into millions of dollars. Consequently, the time and money you might "save" by not doing background checks are only a drop in the bucket compared to what you might be required to spend to defend yourself against a negligent hiring lawsuit.

Copyright 2004 M. Lee Smith Publishers LLC. This article is an excerpt from DELAWARE EMPLOYMENT LAW LETTER. Delaware Employment Law Letter does not attempt to offer solutions to individual problems but rather to provide information about current developments in Delaware employment law. Questions about individual problems should be addressed to the employment law attorney of your choice.