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Lawsuit Phobia

Lawsuit Phobia

If you want to have some fun on the job, wait until the door to the HR department is open, get a running start and yell, "lawsuit" as you dash by the door. Then, listen for the shrieks and screams as you scurry down the hall.

Sometimes I think lots of HR people are more afraid of being sued than they are of hiring Jack the Ripper. Therefore, the main rhetorical question in this piece is, "Which is the greater risk: Hiring a fraud or getting sued?"

In this increasingly litigious society, the risk of being sued has grown substantially in recent years. The net effect has been to make corporate America even more circumspect when it comes to hiring practices.    

This has resulted in a specific sort of litigation liability. If you carefully check references on a candidate for employment, you might get sued for invasion of privacy; if you don't check references at all, you might get sued for negligent hiring. On the other side of the fence, if you allow your employees to serve as references for former employees, you might get sued for defamation. But if you knowingly withhold information from a prospective employer that results in injury to an innocent third party, you could be sued for negligent referral. Many companies have thus instituted "don't ask, don't tell" hiring policies.

But when you really start to weigh the risks involved in the employee selection process, there is only one reasonable conclusion to draw: It's far better to make the most informed hiring decisions possible than it is to run scared because somebody might sue.

Careful reference checking can be done thoroughly and lawfully if a few simple principles are followed:

  • First and foremost, realize that reference checking has been and always will be a standard business practice.

  • Develop a comprehensive waiver for every job candidate to sign, giving you express permission to talk to references and anyone else familiar with the candidate's job performance and work history. That will eliminate the invasion of privacy problem.

  • Make sure every candidate provides appropriate references, people with whom the candidate has actually worked. Then make sure that whoever's doing the reference checking asks questions pertaining only to job performance. If a reference refuses to talk, put the burden on the candidate to come up with other references who will.

If you're asked and agree to serve as a reference, confine your comments to job performance. Also, remember that if, for example, a former employee was fired for stealing -- and it's true -- it's OK to say so. While this is in no way intended as legal advice, there is an old maxim in law that still stands today: The truth is an absolute defense. You might get sued for being honest, is passing along a thief to an unsuspecting employer or being honest and being sued more of a risk? Also, bear in mind that the burden is on the person doing the suing to prove you intentionally lied, instead of the burden being on you to prove you told the truth.

I recall one instance involving a candidate for a senior-level research position with a major pharmaceutical house. The position required a PhD. As it turned out, the candidate had lied about his academic credentials. He only had a bachelor’s degree. The prospective employer declined to hire the individual who, in turn, sued for wrongful denial of employment. Keeping in mind that the burden was on the candidate to prove he did have the required degree, how long do you think the suit lasted? It was over within less than half a day. The candidate could not show he had earned the degree. Case dismissed.

Now, suppose the pharmaceutical house had not checked his credentials because of lawsuit phobia and, as a result, a flawed medication went on the market and injured hundreds, maybe thousands, of people. Do you think there might have been a few negligent-hiring lawsuits filed? It's always better, in my opinion, to make an informed hiring decision, despite the specter of a lawsuit.

None of the information provided herein constitutes legal advice on behalf of Monster.
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