As employers face a critical talent shortage amongst historically low unemployment rates, organizations are turning to untraditional methods to source workers. While it’s not uncommon for a job listing to include a set of requirements for the position, what if those prerequisites were limited only to the ability to lift over 50 pounds, stand for eight hours, and be authorized to work the United States? No “previous experience required.” No “college degree preferred” or minimum GPA necessary. No verifiable qualifications demanded. That’s what candidates for employment at The Body Shop’s retail stores will find in store for them come this summer.
Open hiring policies abandon traditional pre-employment screening, such as criminal background checks, drug tests, and verifications of employment, education, and references in favor of, “replacing scrutiny with trust.” In most cases, there’s not even an interview – any interested worker is eligible for hire.
While the unemployment rate in the U.S. lingers around 3.6%, that still represents an estimated 5.9 million people who are without a job. And for many of these individuals, their past histories, which may include criminal convictions, present barriers from getting a paycheck. In fact, 1 in 3 adults in America, or an estimated 77 million individuals, have a criminal record, and around 2.2 million individuals are currently inmates in the federal or state penitentiary systems. What’s more, criminal recidivism rates show that about 4 in 9 ex-offenders will re-offend at least once during their first year out of prison.
And that’s where open hiring fills a gap.
From Greyston to The Body Shop
Since 1982, New York-based Greyston Bakery has utilized an open hiring model to “accept an individual based on current actions and future potential, not judge them on their past.” Open hiring hopes to curb criminal recidivism by getting people employed.
Greyston maintains a waiting list of individuals wanting a job. When a position opens up, the person at the top of the list gets invited to complete a paid internship at their bakery. Upon successful completion of the course, a full-time job is theirs. It’s that simple. Around 75% of Greyston’s bakery staff, which comprises close to 80 workers, have come through their open hiring model.
After consulting with Greyston and piloting open hiring at their distribution center in North Carolina, The Body Shop recently announced that it will adopt an open hiring model for its retail associates in the United States. Much like Greyston, candidates seeking employment at The Body Shop will be hired on a first-come-first-served basis, absent background screening, or drug testing.
By comparison to Greyston, the deployment of open hiring at The Body Shop is massive. The Body Shop employs around 1,000 retail workers during peak seasons, with 10,000 employees in total and annual revenue close to one billion dollars (U.S.). And with size comes greater risk.
Employers must act reasonably when hiring, supervising and retaining workers. Negligent hiring occurs when an employer fails to verify that a prospective employee may present a danger to the organization. Negligent hiring claims can be brought by an individual when an employer fails to screen a worker adequately, and that worker subsequently harms someone else.
In making a negligent hiring claim, the harmed individual argues that the business knew or should have known their worker’s background history before hiring them. While states have defined the elements necessary to prove a negligent hiring claim, at their most basic, the harmed party must establish:
- The employer owed a “duty of care” to others when hiring the worker
- The employer breached that duty
- The breach was the cause of the injury or harm
- The injury or harm was reasonably foreseeable
- Damages resulted from the employer’s inaction.
Bottom line – if an employer is not diligent in assessing a worker’s background and that worker harms someone, that employer could be on the line for the worker’s actions. And employers are responsible for the ongoing supervision of their workers and ensuring that their retention does not indicate foreseeable harm to the organization’s workforce or its clients.
Case In Point
Successful negligent hiring claims are disruptive to business and are avoidable. The number of lawsuits filed against organizations is numerous, with settlements averaging more than 1 million dollars, and court awards often exceeding several million dollars.
Take the case of a healthcare provider who failed to perform a background check on its employee who subsequently murdered a client and his grandmother. A criminal background check would have revealed six felony convictions. Instead, two individuals are dead, and the company paid out $26.5 million to the Plaintiff, including $18 million in punitive damages.
In the manufacturing space, an employee shot and killed a coworker as a result of a workplace confrontation. If the employer had conducted a criminal background check and requested a reference check of former employers, the employer would have learned that the Defendant had multiple criminal convictions, including carrying an illegal weapon on the job site. The employer was found liable for negligent hiring, supervision, and retention.
And in retail, the actions range the gamut from allegations of sexual assault of a child customer to incidents resulting in the murder of coworkers. In all cases, the employer is held accountable for the actions of their employee if they could have reasonably foreseen the consequences of their employee’s actions.
Balancing Inclusivity with Risk
While open hiring models are admirable, they introduce risk to an organization that comes with legal liabilities associated with negligent hiring. Directly inquiring into and verifying an individual’s past can help to reduce an employer’s risk of a negligent hiring claim. Some states have even passed legislation that protects organizations from negligent hiring claims when hiring ex-offenders. And most employers are amenable to working with individuals with criminal records.
Here are some tips to avoid a negligent hiring claim while supporting inclusive hiring:
- Eliminate barriers in the pre-hire process
Ban the Box measures delay when an employer can inquire into a candidate’s criminal history. In some cases, they may also include special notice requirements and may also limit the types of criminal information that an employer can consider when making their suitability decision. Even if you are not in one of the 34 jurisdictions in the U.S. that have enacted a ban the box law, you might consider removing the criminal history question from your job postings and application so that all individuals are encouraged to apply regardless of their criminal history.
- Trust but verify
Ask candidates to disclose their former employment and education history. Verify that information looking for gaps in a candidate’s past. Engage in an open discussion with the candidate to understand how life events have shaped their work history; professional references that solicit substantive information can help develop a picture of the individual as a worker.
- Equitably assess criminal history
Employers should avoid blanket policies that exclude individuals from hire. Instead, employers should create policies that promote fair hiring practices. In particular, employers are encouraged to following the Equal Employment Opportunity Commission’s guidance and consider:
- The nature and gravity of the crime
- The time that has passed since the crime or completion of the sentence
- The relationship of the crime to the worker’s ability to perform the job without reasonable cause of harm to the organization
- Screen proportional to role
Not all workers introduce the same amount of risk to an organization. Employers should consider tailoring their background screening practices to align with the roles their workers will fill. Identity verifications and reviews of previous employment and references should be a must for all workers. Criminal record searches and drug testing may be relevant for some positions but not others. And remember that industries like energy, finance, healthcare, and transportation must meet specific minimum background check requirements as identified within the regulations that govern them.
- Benchmark to avoid negligence
Remember that negligence results when an organization falls below a reasonable standard of care. Employers should network with other businesses in their industry to set a baseline for screening. Falling below that baseline could be evidence of negligent hiring practices.
Good Intentions May Lead to Bad Consequences
While open hiring models are a novel way to approach recruiting, employers should proceed cautiously and understand the legal risks associated with adopting an open hiring model. Employers can still foster inclusivity and embrace change for the better while taking reasonable measures to protect their workforce and guests through effective background screening.