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Statutory Limitations on Claims for Negligent Hiring and Supervision

On June 13, 2013, Governor Rick Perry signed H.B. 1188, codified under Texas Civil Practice & Remedies Code § 142.001, et seq., that is designed to limit claims against employers for negligent hiring and supervision of employees.  Pursuant to § 142.002 of the Texas Civil Practice & Remedies Code, an employer may not be liable for a cause of action solely for negligently hiring or failing to adequately supervise an employee, based on evidence that an employee has been convicted of an offense.  In other words, under the recent statute, in order to prevail on a claim for negligent hiring or supervision, the movant must do more than merely show that the applicable employee has previously been convicted of a criminal offense.

The statute was designed to assist prospective employees with criminal backgrounds.  Research indicates that job applicants with a criminal record receive less than half as many job offers as compared against applicants with no criminal record.  A legislative policy was put in place so as to allow job seekers with a criminal record to be productive and contributing members of society.  The goal is to prevent repeat criminal activity due to unemployment.

Notably, the statute does not insulate employers from all claims for negligent hiring and supervision.  The statutory protection specifically does not apply, if:

  1. The employer knew or should have known of a conviction; and
  2. The employee was convicted of:
    1. An offense that was committed while performing duties substantially similar to those reasonably expected to be performed in the applicable employment position, or under conditions substantially similar to those reasonably expected to be encountered during the course of employment;
    2. Certain offenses identified under Section 3g, Article 42.12 of the Texas Code of Criminal Procedure (including, among other things, murder, aggravated robbery, aggravated assault, indecency with a child and aggravated kidnapping);
    3. A sexually violent crime; or
    4. Certain prior acts of fraud or misuse of funds, if it is foreseeable that the employee was hired for a position that would involve discharging a fiduciary responsibility in the management of funds or property.

Therefore, if an employer hires an employee with a criminal record meeting one of the above-referenced criteria, the employer may still be liable for negligent hiring or supervision merely because it hired such employee.  The movant need not show further egregious conduct on behalf of an employer to substantiate a claim for negligent hiring or supervision.

The takeaway from the recently enacted statute is that employers have greater protection from claims for negligent hiring or supervision.  However, employers must remain diligent when conducting background investigations on job applicants and be cognizant of certain more serious criminal offenses and offenses involving similar activities as will be performed by the applicant in his new employment position.

In a follow-up post, we will discuss some important issues and concerns to consider when evaluating whether to run criminal background checks on prospective employees.