As a small business owner who has invested in a franchise, could your operation survive a multimillion-dollar negligent hiring verdict?
Negligent hiring lawsuits seek to impose liability on an employer when a worker causes harm to a third party, such as a customer, colleague or the general public. If the employer should have “reasonably known” that the individual was unfit for the position, then the employer could be held responsible for the resulting damages.
Implementing a background screening program is an effective method for franchises to help protect themselves against negligent hiring suits. Background screening for criminal history, sexual abuse and motor vehicle violations also helps to reduce the risks of workplace theft, violence, property damage and other unsafe, unethical or criminal behaviors.
To create a safer work environment, mitigate the risks of negligent hiring and increase your overall quality of hire, follow these three best practices for implementing a background screening program in your franchise:
1. Know State and Federal Laws
To build a compliant employment screening program, familiarize yourself with the applicable federal and state requirements. In New Jersey, for example, job applicants must submit to a criminal background check when a business has a liquor license. In some states, like Massachusetts, the state restricts how employers use criminal history during hiring.
Consult with your legal counsel or background screening provider to ensure your program complies with all applicable legal requirements.
2. Meet the Terms of Franchise Agreements
In addition to negligent hiring lawsuits, franchise owners can also use background screening to help protect against breach of contract lawsuits. If an employee causes a negative or criminal incident in the workplace, then the employer may be liable for a breach of contract claim by the franchisor.
Review the terms of your franchise agreement with the help of a lawyer. The contract will likely specify how employers must vet employees. Use the contract terms as a guideline to help structure your background screening program.
3. Consult with Legal Counsel
Consulting with an attorney can help franchise owners implement a program that complies with the Fair Credit Reporting Act and select background screening solutions that fit their needs and risk profile. Franchises that regularly hire drivers, for example, will want to consider motor vehicle record checks for those positions.
Legal counsel can also help your business determine which, if any, roles should include credit checks and ensure that credit checks comply with any applicable state requirements.
By following these three best practices, franchises will be able to take steps to better protect their customers, employees and property.
Free Report: Protecting the Franchise
Discover the risks of failing to properly background screen franchise employees, and tips on how to create an effective screening program by downloading:
Protecting the Franchise: What Franchises Need to Know to Protect Their Customers and Their Investment