Key Takeaways
Based on our review, 92.5% of employer payouts for negligent hiring due to past convictions involved four job types - driving, vulnerable populations, access to homes, and law enforcement/security
The employer payouts for verdicts and settlements involving these four jobs categories were also 3x more expensive than the remaining cases
Despite the narrowness of employer liability for negligent hiring, employers need clear guidance, standards and protections to avoid over-disqualifying candidates with past convictions
Having spent the past six years working with companies to implement Fair Chance employment strategies, we have come to understand the primary barriers standing between available jobs and talented candidates with past convictions. Chief among these barriers is a concern about employers’ exposure to negligent hiring liability if they hire a candidate with a conviction history.
Employers, HR leaders, and their attorneys all understand that not all convictions are job-relevant and pose a liability risk, but they also have no industry standards to guide them in how to consider a conviction relative to a job. The research field has offered some insights. Legal Action Center and National Workrights Institute recently showed the narrowness of employer liability using a subset of appeals court verdicts; Shawn Bushway from RAND has argued that conviction relevance is not even a useful measure. Despite these findings, without concrete guidance, employers have consistently disqualified wide swaths of candidates based on their past convictions for fear of negligence lawsuits that lead to high-dollar settlements or high-profile cases.
In 2023, our team identified a set of 4,300 cases and settlements that involved negligent hiring claims pertaining to employees with past convictions. The set includes every relevant verdict and a sample of 1500 settlements and mediations paid by employers over the past 35 years. So far, our team has reviewed and coded 1,350 cases from the set, with this question in mind: what are the circumstances under which employers should be concerned about negligent hiring exposure? Here are the main takeaways from our review:
44% of cases involved jobs that require driving
23% of cases involved jobs directly serving vulnerable populations (including education, healthcare, and religious institutions),
14% of cases involved jobs that provide access to private homes
11% of cases involved jobs related to security or law enforcement
Only 7.5% of cases involved jobs outside of these categories
The verdicts and settlement payouts involving jobs that required driving, vulnerable populations, security/law enforcement, or home access were 3x larger than the other cases
The vast majority of the U.S. workforce falls outside of these four job categories, yet candidates with past convictions still face massive barriers to entry across the labor market. This creates inefficiencies for employers and negative outcomes for job candidates impacted by the justice system. So how do we fix this?
Employers need clarity. With no industry standards on how to manage background screenings based on job-risk or how to consider specific conviction categories against specific job categories, employers will overprotect against downside risk and inevitably disqualify high-quality candidates.
Employers need tools. A common and credible “green-light matrix” to pre-adjudicate specific conviction categories as non-risky to specific job categories could quickly enable millions of candidates to bypass lengthy and expensive individual assessment processes.
Employers need protections: More concrete industry norms would enable local and state policymakers to create better protections against liability for employers that follow best practices.
Employers need data and research: The field of Fair Chance employment is still nascent and needs more evidence to demonstrate if and how more inclusive practices can improve outcomes for companies and job candidates.
Envoy is proud to work with leading employers that are re-imagining their risk calculus and embracing the expanded talent pools that come from Fair Chance employment. We’re also thrilled to partner with business and trade associations providing credible guidance to the employer community on how to effectively implement Fair Chance strategies. But we are just scratching the surface, and hope that data such as this strengthens the case to change employer norms and build a policy and legal environment that encourages inclusivity.