Negligent Hiring: Colorado
Federal law and guidance on this subject should be reviewed together with this section.
Authors: Sarah Benjes, Stuart R. Buttrick, Susan W. Kline and Mary L. Will, Faegre Baker Daniels LLP
- Colorado recognizes a claim for negligent hiring against employers. See Elements of a Negligent Hiring Claim.
- Negligent hiring claims may apply to acts that occur within and outside of the scope of employment. See The Scope of Employment.
- Background checks are allowed in Colorado, subject to the terms of the Colorado Consumer Credit Reporting Act (CCCRA) and the federal Fair Credit Reporting Act (FCRA). See Background Checks.
- There are statutory requirements that require employers in certain professions to perform background checks on employees. See Background Checks.
Elements of a Negligent Hiring Claim
Colorado recognizes a claim for negligent hiring against employers. When assessing a possible claim for negligent hiring, a court will examine the following factors:
- Whether the employer had actual knowledge at the time of hiring or reason to believe that the person hired, by reason of some attribute or prior conduct, would create an undue risk of harm in carrying out his or her employment duties;
- Whether the employer knew at the time of hiring that the person hired would have frequent contact with members of the public or would be in close contact with particular individuals as a result of a special relationship between such persons and the employer;
- Whether the employer should have reasonably foreseen harm under the circumstances;
- The social utility of the employee's conduct;
- The magnitude of the burden of guarding against the harm caused to the injured party;
- The practical consequences of placing such a burden on the employer; and
- Any additional elements disclosed by the particular circumstances of the case.
Raleigh v. Performance Plumbing and Heating, Inc., +130 P.3d 1011 (Colo. 2006). No one factor is controlling. Instead, the question of whether a duty should be imposed in a particular case is assessed by determining whether a reasonable person would recognize a duty and agree that a duty exists under the circumstances presented.
The Scope of Employment
When the scope of a person's employment is likely to bring that individual into contact with the public, the diligence required of the employer in investigating the person is increased. Raleigh v. Performance Plumbing and Heating, Inc., +130 P.3d 1011 (Colo. 2006). Colorado courts have found that negligent hiring claims can operate to hold an employer responsible for certain intentional or negligent acts by an employee that occur either within or outside the scope of the employee's employment. Raleigh v. Performance Plumbing and Heating, Inc., +130 P.3d 1011 (Colo. 2006). The courts have cautioned, however, that negligent hiring claims are not supposed to function as insurance policies for all persons injured by an employee. Connes v. Molalla Transp. Sys. Inc., +831 P.2d 1316 (Colo. 1992).
When an employee's duties will bring him or her into frequent contact with the public or will involve close contact with particular individuals as a result of special relationships between such persons and the employer, an employer may have a duty to go beyond the job application and interview processes and make an independent inquiry into the applicant's background. For example, if an employee's primary duty involves driving commercial vehicles, the employer has a duty to investigate an applicant's driving record. However, the employer does not have a duty to conduct further investigation into the individual's non-vehicular criminal background. Connes v. Molalla Transp. Sys. Inc., +831 P.2d 1316 (Colo. 1992).
Background checks are allowed in Colorado, subject to the terms of the Colorado Consumer Credit Reporting Act (CCCRA) and the federal Fair Credit Reporting Act (FCRA). The CCCRA is Colorado's counterpart to the federal Fair Credit Reporting Act (FCRA). See +C.R.S. 5-18-104. The CCCRA has many similarities to the FCRA, including for example:
- Both only apply to reports procured through a consumer reporting agency and employers may conduct reference checks internally;
- Consumer reports are permissible for employment purposes under both; and
- The target of an employment-related report must receive notice of the intent to obtain a report and must consent in writing to the same under both.
Although the two statutes share many similarities, there are provisions unique to the CCCRA that employers should be aware of when requesting that a credit reporting agency provide a consumer report regarding a prospective employee. First, the CCCRA prohibits consumer reports from containing the following information:
- Bankruptcy cases more than 10 years old;
- Suits and judgments that predate the report by seven years or the governing statute of limitations, whichever is longer;
- Tax liens paid more than seven years before the report;
- Accounts placed for collection or charged to profit and loss that predate the report by more than seven years;
- Arrest, indictment or conviction records more than seven years old; or
- Any other adverse item of information that predates the report by more than seven years.
However, those exclusions do not apply to an employment consumer report of an individual that is reasonably expected to earn more than $75,000 annual salary.
Second, consumer reports furnished for employment purposes shall not contain medical information unless the consumer consents to the furnishing of the report.
Third, the CCCRA only applies to consumer reporting agencies and it does not contain any remedy for violations by employers. Any violations are thus most likely to be brought under the FCRA, if at all.
Further, effective July 1, 2013, background checks are also subject to Colorado's Employment Opportunity Act (Act), which prohibits employers with four or more employees (except for employers in law enforcement) from using consumer credit information for employment purposes subject to certain limited exceptions. The following employers and positions are exempt from the Act:
- Banks or financial institutions;
- Employers that are "required by law" to obtain such information;
- Some high-ranking executive or management personnel and their professional staff; and
- Positions involving contracts with defense, intelligence, national security or space agencies of the federal government.
The Act's protections apply to job applicants as well as employees.
Various Colorado statutes also require employers to conduct background checks for positions in certain industries, for example:
- Child care. +C.R.S. 26-6-104; +C.R.S. 26-6-103.5;
- Health care. +C.R.S. 27-90-111; +C.R.S. 25-1.5-302; +C.R.S. 25-1-124.5; and
- Juvenile facilities contractors. +C.R.S. 19-2-411.5.
In addition, under Colorado law, employers generally may ask applicants about their arrests and convictions. However, the Colorado Criminal Justice Records Act (Act) forbids employers, with few exceptions, from asking about sealed records in applications or interviews. Further, under the Act, an application may not be denied solely on the basis that the applicant refused to answer questions regarding sealed records. Employers should be aware that hiring decisions based on arrest and convictions records may have a disparate impact on certain racial or ethnic groups. Therefore, employers should be cautious about making hiring decisions solely on those grounds.
The Colorado Commission on Civil Rights has stated that any questions regarding arrests are discriminatory. For that reason, and because an arrest is not a finding of guilt, employers should consider whether arrests are relevant to the job and whether it is worth asking at all. If so, employers should further consider whether a particular arrest is relevant to the position at the time a particular applicant applies.
Colorado does not have a law that specifically governs drug and alcohol testing, preemployment or otherwise. Thus, Colorado employers are free to impose drug and alcohol testing on applicants provided that any such tests comply with the Americans with Disabilities Act (ADA), federal discrimination laws, the Colorado Anti-Discrimination Act (CADA) and other applicable laws.
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