What Constitutes Negligent Hiring and Employer Liability in Iowa?

In this article, we explain negligent hiring and discuss the law regarding negligent hiring and employer liability in Iowa.

Every company will need to hire new employees at some point. The process can be arduous for small and large businesses alike, with many companies turning to recruiters for their hiring needs. Both recruiters and company employees in charge of hiring are responsible for conducting a variety of pre-employment investigations, including background checks, verifying professional and personal references, running credit reports, performing drug tests and checking job qualifications (professional certificates, college degrees, work experience). Pre-employment screening must walk the line between being thorough and non-discriminatory.

Failure to meet these standards can result in negligent hiring claims against employers.

Negligent hiring is a legal claim where an employee or customer claims that another employee injured them on the job or in connection in some way to the defendant’s employment and that the employee has a history of similar criminal activity that was either not identified by the employer or willfully ignored during the hiring process. The negligent hiring claim posits that the employer knew or should have known of the employee’s history before hiring them.

Negligent hiring claims can be damaging to any business but are especially detrimental to businesses that hire employees for one on one work, manage sensitive information (passwords), or handle other people’s property.

An Example of Negligent Hiring

Let’s say Bob’s Construction and Remodeling service places contract employee Alfred with a client. Bob’s Construction and Remodeling service will be listed as the employer of record. While on the job, Alfred gets into a fight with another employee, Bernard, and injures Bernard who then files a negligent hiring claim against the company. The investigation into the injury finds that Alfred was convicted of aggravated assault three years ago and Bob’s company failed to do a background check on Alfred when they hired him. Now, Bob’s company is liable and the negligent hiring claim will likely succeed in court.

The state of Iowa recognizes a cause of action against an employer who negligently hires or retains employment with an employee that the company knew, or should have reasonably known, is unfit for the job so as to create a danger of harm to employees or customers. The following must be pleaded and proven by the plaintiff’s party in order to sustain a cause of action for negligent hiring in Iowa:

• The employer knew or should have known of the employee’s previous history and unfitness to work prior to hiring;
• By ignoring known and available information, the employer’s hiring actions, and the employee’s unfit, dangerous, and/or incompetent behavior were directly involved in and lead to the injuries sustained by the plaintiff;
• There is an employment relationship or some other type of contractual relationship for employment between the tortfeasor (the person who committed the criminal act) and the defendant employer (also the person defending the allegations against them). Basically this means the person who injured the other person must have a relationship to the company that is being sued for wrongful negligence;
• The employer’s supervision failed to stop the act leading to the wrongful negligence claim;
• The activity of the defendant must have resulted in some kind of injury they can potentially get compensated for.
  

In April of 2019, Iowa Governor Kim Reynolds signed legislation H.F. 650 relating to private employers, general contractors, and premises owners for negligent hiring of employees, agents, general contractors, etc, convicted of a public offense. The new law set forth more explicit guidelines on what constitutes a legitimate negligent hiring claim, listing a number of criteria and specific criminal offenses. If you or your company is the target of a negligent hiring claim, or you believe another employee’s actions against you validate a claim, don’t hesitate to give us a call at 630-324-6666 and learn about your legal options.