Background Checks: Controlling the Conduct of Your Employees in Pennsylvania

In Pennsylvania, typically an employer can only be found to be liable for the negligent acts of its employee which cause injury to a third person, when the negligent acts are committed during the course of and within the scope of the employee’s employment. This is the law of vicarious liability. However, there is a body of case law which allows a victim to sue employers directly for failing to check employees out before hiring them, for failing to monitor their employees, or for failing to fire them after learning of their questionable conduct. This case law may apply even if the employee is acting outside the scope of his employment.

The courts in Pennsylvania have followed the Restatement (Second) of Torts § 317, entitled “Duty of Master to Control Conduct of Servant,” which provides as follows:

A master is under a duty to exercise reasonable care so to control his servant while acting outside the scope of his employment as to prevent him from intentionally harming others or from so conducting himself as to create an unreasonable risk of bodily harm to them, if

  1. the servant
    1. is upon the premises in possession of the master or upon which the servant is privileged to enter only as his servant, or
    2. is using a chattel of the master, and
  2. the master
    1. knows or has reason to know that he has the ability to control his servant, and
    2. knows or should know of the necessity and opportunity for exercising such control.

As the cases below demonstrate, Restatement Section 317 imposes the duty to exercise reasonable care on an employer in selecting, supervising, and controlling employees.

In Dempsey v. Walso Bureau, Inc. , 431 Pa. 562, 246 A.2d 418 (1968), a security guard employed by the defendant assaulted an employee at a bus terminal where the security guard was assigned to work. It was conceded at trial that the employee’s actions were outside the scope of his employment. The issue was whether the employer could be held liable for his employee’s actions if the employer knew (or by the exercise of reasonable care, should have known) of the security guard’s dangerous propensity for violence because of the security guard’s conduct at various previous occasions. Applying Restatement Section 317, the Court held that the employer could be held liable if the plaintiff could prove that “the employer knew, or in the exercise or ordinary care, should have known of the necessity for exercising control of [the security guard].” Id. at 570-72, 246 A.2d at 422-23. However, in this case the court concluded that “there [was] no evidence of record to show either knowledge or reason for knowledge on the part of [the employer] of [the security guard’s] conduct. Id.

Subsequently, the court applied the Dempsey rule in Coath v. Jones, 277 Pa.Super. 479, 419 A.2d 1249 (1980), where a former employee of the defendant raped the plaintiff, having gained entry to her home by representing that he was there on the defendant’s business. The plaintiff alleged that the defendant knew of the perpetrator’s propensity for violence against women, and that the defendant was negligent in hiring and retaining the perpetrator and in failing to warn its customers not to allow the perpetrator into their homes. The court found the employer to be negligent, holding as follows:

An employer may be negligent if he knew or should have known that his employee had a propensity for violence and such employment might create a situation where the violence would harm a third person. Dempsey v. Walso Bureau, Inc. , 431 Pa. 562, 246 A.2d 418 (1968) indicates that an employer may be negligent for the failure to exercise reasonable care in determining an employee’s propensity for violence.

Coath, 277 Pa.Super. at 482, 419 A.2d at 1250. The court further held that “if it were foreseeable by the defendant that [the perpetrator] . . . could attack a customer because he had, on a previous occasion, been admitted to her home on the employer’s business, then there would exist a special relationship between defendant and customer and a duty on the employer to give a reasonable warning to the customer.” Id. at 485, 419 A.2d at 1252.

Similarly, in Hutchison v. Luddy, 560 Pa. 51, 742 A.2d 1052 (1999), a minor sued a priest, alleging that the priest molested him on non-church owned property. The minor also sued the church, the bishop, and the diocese, alleging that they negligently hired, supervised, and retained the priest, despite knowledge of his pedophilic disposition. Testimony in the case revealed that the bishop and the diocese “knew for certain that [the priest] had a propensity for pedophilic behavior and were aware of several specific instances of such conduct. They knew that placing him in a position in which he would have contact with children would afford [the priest] ample opportunity to commit further acts of abuse, which would likely result in extreme harm to the children under his supervision.” Id. at 64, 742 A.2d at 1059. Relying on the principles of Restatement Section 317, the Court held that the bishop and the diocese “had a duty to take appropriate precautions to prevent [the priest] from molesting any more children, e.g., by assigning him to a position in which he would not have any contact with children, by ensuring that he sought treatment for his disorder, or by terminating his employment altogether.” Id. at 65, 742 A.2d at 1059.

So what can you, as an employer, do to protect yourself? PERFORM A THOROUGH BACKGROUND CHECK on prospective employees! As long as you comply with the Fair Credit Reporting Act (FRCA), you may use consumer reports when hiring new employees and even when evaluating employees for promotion, reassignment, and retention. To be covered by the FCRA, a report must be prepared by a consumer reporting agency (CRA)—a business that assembles such reports for other businesses. The consumer report contains information about a prospective employee’s personal and credit characteristics, character, general reputation, and lifestyle. Be warned, however, that before an employer can get a consumer report for employment purposes, he must notify the individual in writing, in a document consisting solely of this notice, that a report may be used. The individual’s written authorization must be received before the consumer report may be requested from the CRA. In addition to the consumer report, an employer can request a criminal background check from the Pennsylvania State Police, using the Pennsylvania Access to the Criminal History (PATCH) System, which can by accessed through their website located at www.psp.state.pa.us.

If the employer decides to take adverse action, relying on a consumer report, he must give the individual a pre-adverse action disclosure that includes a copy of the individual’s consumer report and a copy of the pamphlet entitled, “A Summary of Your Rights Under the Fair Credit Reporting Act.” After the adverse action has been taken, an employer must give the individual notice—orally, in writing, or electronically—that the action has been taken in an “adverse action notice.” This notice must include the following:

  1. the name, address, and phone number of the CRA that supplied the report;
  2. a statement that the CRA that supplied the report did not make the decision to take the adverse action and cannot give specific reasons for it; and
  3. a notice of the individual’s rights to dispute the accuracy or completeness of any information the agency furnished, and his or her right to an additional free consumer report from the agency upon request within 60 days.

FTC Facts for Business, Using Consumer Reports: What Employers Need to Know, March 1999.

To help avoid liability for the acts of an employee, an employer should conduct background checks on its employees. The time and expense it takes to conduct the background check is negligible compared to a lawsuit as a result of your employees’ negligent and possibly even criminal acts.

The attorneys of Wolf, Baldwin & Associates, P.C. have experience representing both employers and employees in employment litigation cases. We can prosecute injury suits against employers who have failed to control their employees correctly. We can counsel businesses regarding actual and potential claims for their own negligence or that of their employees. Contact us today to schedule an appointment. We look forward to speaking with you.

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