Employee background checks can provide an abundance of useful information and a world of legal risk. Properly informed employers, however, can wield this double-edged sword with precision to find the best person for the job while avoiding liability for poor hiring decisions. In this post, we’ll discuss the benefits of background checks; certain “barrier crimes” with unique application within the LTC industry; and general legal principles to keep in mind in order to avoid claims for employment discrimination.

While background checks serve as the ultimate gatekeeper for employee trustworthiness, they also reduce litigation exposure; mitigate the risk of employee misconduct; and identify individuals with propensities for resident abuse and neglect.

Studies have shown a sharp rise in résumé fraud since the 2008 recession, with nearly 63% of résumés submitted to health care employers containing outright lies rather than the expected “creative writing.” Now, more than ever, background checks are an important first step for LTC employers seeking to avoid liability for the actions of employees. Background checks can reduce exposure to claims for respondeat superior (Latin for “let the master answer”), which are claims against the employer based on the tortious acts of employees committed within the scope of employment. Additionally, although not required in many states, background checks may reduce claims for negligent hiring and negligent retention, which are based on the theory that an employer “knew or should have known” that an employee had “dangerous propensities” likely to place residents or other employees at risk, but did nothing.

At a minimum, LTC employers should review federal and state laws regarding “barrier crimes,” which preclude certain individuals from employment in the LTC setting. For example, facilities receiving Medicare/Medicaid funds cannot employ, for a minimum of five years post-conviction, individuals that have been convicted of patient abuse or neglect under state or federal law; felony health care fraud; or a felony related to controlled substances. Misdemeanor fraud or controlled substance convictions, however, result only in a 3-year permissive exclusion from employment. Similarly, Virginia facilities may not employ individuals with felony convictions for assault, extortion, neglect, or obscenity offenses. However, Virginia allows for permissive employment of an individual with one misdemeanor conviction – not involving abuse or neglect – that is at least five years old. Barrier crime laws must be strictly followed, or the facility could lose its funding and/or license.

At the same time, employers should resist the temptation to institute blanket policies denying employment to any individual with a criminal record, as doing so may give rise to claims for disparate impact employment discrimination. These claims arise when uniform application of a criminal record exclusion policy disproportionately excludes a protected class of job applicants as a result of their race, color, religion, sex, national origin, disability, or age. Rather than enacting over-broad exclusions and risking liability, employers should develop a targeted screening process that considers, at a minimum, the following three factors first-announced in the landmark decision of Green v. Missouri Pac. R.R. Co., 549 F.2d 1158 (8th Cir. 1977):

  1. The nature and gravity of the offense or conduct;
  2. The amount of time that has passed since the offense or conduct or completion of the offender’s sentence; and
  3. The nature of the job held or sought.

Thus, declining to hire a 45-year-old minority for a caregiver position on the grounds that he/she is “dishonest” and exercises “poor judgment” based on an under-age drinking ticket may be a risky endeavor. While balancing the Green factors in more difficult situations can seem intimidating in the abstract, LTC employers can find detailed guidance by visiting the Equal Employment Opportunity Commission’s (“EEOC”) website, and reviewing the EEOC’s 2014 joint publication with the Federal Trade Commission entitled, “Background Checks: What Employers Need to Know.” This joint publication is particularly helpful for employers that outsource to third-party companies in the business of compiling background check information, as doing so adds notice, disclosure, and consent requirements under the Fair Credit Reporting Act.

LTC facilities should not be afraid to institute background check policies. When properly wielded, they can be used by LTC facilities as both a litigation sword and a litigation shield.

By Richard Holbrook of LeClairRyan