Understanding Civil Litigation Checks in the Employment Screening Process

We all aware of the standard background check components for employment screening by now, which include criminal conviction checks, driving histories, credit reports, referencing, drug testing and so forth, yet there exists a little used component, which needs to be understood, just as a parent needs to understand her child, before she can parent him effectively.

Civil Litigation Histories are a very misunderstood animal.  Unlike Criminal Conviction Records, Driver’s License Checks, or Employment Credit Reports, Civil Litigation Histories are comprised of civil lawsuits that may involve a candidate, but are extremely hard to identify because of the lack of “normal” identifiers contained in the other available modules, such as date of birth, address, social security number, physical description, etc

What is a Civil Lawsuit? 

A civil lawsuit is basically a matter between two parties, where in one party alleges wrongdoing against another party.  These matters can take the form of anything you can think of, from dog bites, to car accidents, to evictions, to recovery of money loaned and wrongful death claims. (Wrongful Death Claims, by the way are useful in locating undisclosed/undiscovered murder convictions!)  

Unfortunately, a civil lawsuit is between parties who know each other (usually), and thus, no platform has been established to delineate one party from another to anyone “looking in” since, the lawsuit is basically a dispute resolution technique (among many others) which is increasingly utilized throughout the world, and most of the time, too often, when other methods are readily available.

Since the disputes are between specific parties, and not actually matters involving public policy, or which may have an effect on the public, (excepting, of course, “class-action” lawsuits) generally, the disputes are kept between the interested parties, (even though they are matters of public record) and it is up to anyone looking into the matters to discern for themselves if the lawsuit(s) discovered attribute to the person that the decision-maker has an interest.

A Condensed History of Civil Litigation Checks  

In the olden days of yore, the decision to investigate civil litigation histories originated with banking institutions who wanted to determine if a party that they intended to lend money to was litigious, thus exposing the monies lent to potential risk, by attachment of funds by an opposing party to the borrower. 

At just about the same time in history, the legal community had determined that this research was very important to attorneys who sought to determine the “litigation posture” of either a prospective client, or an opponent.  The concept has evolved into being a very effective tool in the performance of “Due Diligence” studies across the spectrum of business-related matters, including acquisition, sale of a business, public-debt financing, taking an entity public, and the screening of employment candidates.

Since the beginning of “Suit Searches”, as they are referred to in the public record research industry, the problem of subject identification has been a researchers greatest challenge, and a research company’s greatest “dance” to try to explain to a client why it cannot be determined that a particular lawsuit attributes to their subject.

 Notwithstanding these facts, the lack of available identifiers in civil litigation files has contributed to increased cost and confusion as to the applicability of a discovered lawsuit bearing a similar or exact name to a subject in question.  In this era of intense privacy legislation, that particular challenge has become vastly more formidable with the Gramm-Leach Bliley Act, the Fair and Accurate Credit Transactions Act, and numerous other statutes which have forced jurisdictions into removing identifiers from the public records over the past few years.

Understanding the Costs Involved  

It is for this reason that the cost of a legitimate suit search is broken into two parts; first; is the “index search”, which identifies all suits attributable to the name searched, and, second; the “file review/retrieval” which is to authorize a researcher to look at the file, and attempt to determine if it applies to the subject, and then copy the salient items in the file which will identify the nature of the case, who the parties are, and the status or outcome of the matter.  The industry term for the second phase is known as pulling “cover, prayer, docket and dispo(sition).”

Part one is usually billed on a per unit basis, and part two is usually billed on either a per unit basis (where the jurisdiction’s prospective copy costs are predictable) or, as in the case of many of the major metropolitan jurisdictions on a hourly basis because of the obvious lack of control a researcher has in identifying the case;  requesting the clerk to locate the case; the  time to wait for the retrieval of the case, and the time to review the case, each of the components of  which can be substantial.

(Example: in the Federal Archives system, usually a minimum of two visits are required, the first, to make an appointment with the records clerk in order to determine and obtain a case’s “accession number”, and, at  that time, the file retrieval process is started, and within a prescribed period of time [sometimes up to two weeks], a re-visit is required to actually see the file – WHEW !)

Obviously, the research industry learned a long time ago that the time costs of “metropolitan”  research must be borne by the client, or the researcher would go broke!

Also critical in understanding civil litigation checks, is the concept of time, which is broken down as follows:  Index Searches are usually fast, because  they are available on the internet, or through other proprietary private methods and sources.  Remember to always get an “index date” from the index researched so that you will know how current the search is. 

Private databases rarely provide this because, for the most part, the information is outdated, and is not the most current information available, as would be available at the Clerk’s counter.  A “hand-search”, as with a criminal index search is usually 1 to 2 days, dependant upon the location and limitations of the jurisdiction.  The retrieval and review process is what takes the time, (as with criminal convictions) because this part is not automatable, and has to be completed by hand, by a public-employee clerk, who has little interest in their job other than “when is my lunch break” in many jurisdictions. 

If a case is “archived”, expect delays just on the retrieval of up to two weeks.  If the case is not archived, the speed will depend on if the file is in the “ready” section of the Clerk’s office, or scheduled to go to archives, which will delay it up to one week.  Then, it’s just how fast the researcher can review the case, copy the necessary parts, or determine the applicability to the subject. 

Don’t fret, most researchers are very adept at determining through several factors, including their “gut” feeling if a case belongs to the subject you are interested in.  As a general rule, good researchers will copy more cases that appear to attribute to your subject rather than less, in order to err on the side of caution.  With common names, however, sometimes, the task is overwhelming, and you will be notified that there are too many cases to research, or you will be asked to join in the research.  Cell Phones have advanced this component dramatically.  Pain in the Neck? You decide.

Understanding the Risks of Civil Litigation Histories in Recruitment  

 In the employment setting, civil cases pose a multitude of potential risks for a decision maker, not the least of which rests with making a wrong decision to employ based upon case information not actually attributable to the candidate. 

This is why most legitimate employment screening firms advise their clients against civil histories, unless there exists enough budget to thoroughly determine which discovered cases actually apply to the candidate.  Sometimes, there is no ultimate way to determine applicability of a particular case, and the candidate must be re-interviewed, in order to provide information as to the cases discovered, and whether or not the case(s) attribute to the candidate.

One of the widest abuses of the civil litigation histories is in the area of the seeking of cases filed against former employers for Worker’s Compensation claims, rejected by the insurance carrier.

Many employers feel that if an individual was rejected by a carrier, or that the claim, even though “short paid” by the carrier, that the existence of ONE lawsuit reflects negatively on the candidate.  As with ANY Worker’s Comp history, before ANY decision is made, each case should be research thoroughly, and the candidate should be interviewed several times in order to determine if the candidate is a potential troublemaker, or had a legitimate claim, that was mishandled.

All in all, it is always advised that WC issues should be omitted from any employment decision process, because of the obvious volatility of the history, and the subjectivity of the facts, and outcome.  The only real exception to this rule is the existence of MULTIPLE lawsuits for WC claims, against former employers.  This is the ONLY legitimate basis I know of, after 25 years in the employment screening business, with thousands of clients served that may be used to eliminate candidacy. 

It is important to remember, however, the even if it is clear cut that the candidate poses a potential litigation risk, there will be a Plaintiff’s Counsel out there who will question the decision-maker on the witness stand about how the WC lawsuit history affects job performance, so if you use this tool, be aware of the potential repercussions, in that regard.

What can you use a litigation history for, effectively?

The answer is more simple than complex, but is complex, nonetheless, and relies PRIMARILY on the gut feeling of the decision-maker.

Areas of “specific applicability” include, for example  fiduciary complaints against employees in a fiduciary capacity, and who usurped corporate opportunity for personal gain (much as what could be determined from a criminal file of the same type), and where no criminal file was pursued by a jurisdiction, for whatever reason. 

Another biggie that we find regularly is when we screen employees for a property management company, and discover an eviction history with prior residences, or other “same-type” employers.  This is a direct corollary, and does provide at least the basis for further review of the matter(s) with the candidate so that the interviewer can make further “gut” determination as to the veracity or potential “litigation bias” of the candidate.

As with the use of specifically applicable conviction histories in determining the job-worthiness of a candidate (stealing from the till cannot be used to avoid hiring an asphalt worker, etc.), such is the caveat in the use of civil litigation histories, but the  magnification used to scrutinize the decision-maker who uses this tool will be vastly more intense, than with the use of, say, the criminal conviction tool, because of the obviousness of the ramifications of generally hiring a “convicted felon”, versus someone who was “involved in a lawsuit”.

In summary, while civil litigation checks do provide a wonderful window into the litigation attitudes of a prospective employee, the EFFECTIVE use of them depends on many factors, which, in review, are as follows:

1. Willingness on the part of the end-user to thoroughly identify whether or not a case attributes to the candidate, (This can get expensive with common names, in multiple jurisdictions)

2. Understanding that the word “delay” is the order of the day in determining the ultimate civil litigation history of the candidate, and that “true” and “thorough” research of civil litigation histories is expensive, and can outstrip the cost of standard employment screening  by several fold.

3. Understanding that not all matters litigated have any bearing on a candidates’ abilities or prowess on the job, and that even the use of a discovered and validated civil case will subject the user to incredible scrutiny, more so than the use of a conviction history, or other tools.

4. That, in many cases identity can not be determined by the information in the file (public record) that the case is attributable to the candidate, and that the decision-maker should avoid falling into that rut of laziness (which is very alluring to HR managers when the term “delay” is used) and simply look at the index data, which IS NOT an determinant of a candidate’s litigation history, it is only a list of  same or similar names identified to be involved in matters brought before that Court.

With the multitude of good screening tools  available in the employment screening world, civil litigation checks should be used very wisely, obtained through competent research firms that understand ENTIRELY all that is involved in searching and retrieving civil cases.  (Firms that are members of the National Public Record Research Association, Public Record Retrievers Network, and/or National Association of Professional Background Screeners are usually qualified to conduct this more sophisticated type of research)

Ultimately, the civil litigation history as a screening tool should be used in the context of managerial strategies to determine life suitability to a culture, versus job suitability to a candidate. – HAPPY HUNTING!

Author - Thomas C. Lawson CFE, CII is the CEO and Founder of APSCREEN, the nation’s oldest, continuously operated Factual Employment Screening firm, based in Rancho Santa Margarita, CA . Mr. Lawson was the first Court-Certified Expert Witness on Negligent Hiring from the Improper Employment Screening perspective, and testifies on other HR matters, as well.  Published credits include Fraud Magazine (Editorial Review Board Member), Business Week, LA Times, ABC’s American Agenda, CBS Syndicated Talk Radio, NBC’s EXTRA!, and KNX News Radio, to name a few.  Mr. Lawson is a proud member of SHRM, PIHRA, ASIS, ACFE (Life), CII, WAD, WIN, NPRRA, PRRN* NAPBS* and other local groups.  Mr. Lawson can be contacted at (949)646-4003. *Founding Members