How to Avoid Juries and Headlines

[Phone Rings]

Ann: “Cutting Edge, this is Ann.”

Prospective Customer: “I got lawyers and insurance agents yacking about how my employees could be a huge liability.”

Ann (flips on computer): “That’s true.”

Customer: “How can I be responsible for something they did?”

Ann (plugs in superwide monitor): “The buck has to stop somewhere, and if something bad happens on work hours you, my friend, are usually the deep pocket.”

Customer: “My pockets aren’t that deep!”

Ann (adjusts chair): “Then let’s talk about the hairy kinds of liability you may be facing with your workforce and how to avoid them. I like to think of this as: How to Avoid Juries and Headlines.”

So, there are lots of horror stories.

  • A carpet cleaning company in California hired a guy straight out of prison—they didn’t know that, because they didn’t check for criminal records. They didn’t verify his employment claims either, which were fraudulent. They just needed a warm body that could clean carpets. His second week on the job he raped and murdered a woman whose carpets he was supposed to clean. Did the family sue him? No, they sued the company that hired him and sent him into their home. It was a multi-million-dollar suit, the family won. The company appealed, and they settled out of court.

Companies hire C-level executives without verifying their education.

  • Yahoo hired a CEO who said he had a bachelor’s degree in accounting and computer science but it was only in accounting. The former CFO of Veritas falsely claimed he had an MBA from Stanford. The former CEO of Bausch and Lomb falsely claimed an MBA from New York University.

It’s only a matter of time before publicly-traded firms are the subject of shareholder lawsuits for loss of value as a result of negligent hiring.

  • A California-based software firm failed to perform a simple background check on its CFO. When it was revealed that the CFO did not, in fact, have an MBA as he claimed, the stock’s value plummeted 15% and a major analyst lowered their rating on the firm’s stock from “out-perform” to “neutral.”

There is an easy, and I have to say relatively fast and inexpensive way to avoid these horrors – Do a background check.

In my last blog I touted our Standard package—that will cover the criminals. Add an employment piece and you will ferret out any fraudulent employment claims like we saw in the first scenario with the carpet cleaning company.

Education, particularly at the post-secondary level, is very easy to verify. While I know most people in HR who do the hiring are incredibly busy and may not be able to take the time to contact the schools, it takes less than 30 seconds to order that education verification with us and let us do the heavy lifting here.

You ask me how to easily reduce your liability when it comes to your force? Do a background check. Is it crazy to think that you may not know everything you need to about your applicants when they walk in the door? Of course not. Do the checks and know that you have reduced your liability.