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Legal Report November 2006


NEGLIGENT HIRING. In a recent South Carolina case, a state appeals court has ruled that an employer could not be held liable for failure to conduct a background check on an employee who later stole from a company client. The background check, according to the court, would not have indicated that the employee would commit theft.

In 1997, Shirley Kirk hired Mumford, Inc., to provide in-home care aides for herself and her daughter. Kirk and her daughter are both disabled and require assistance to complete daily activities.

In the spring of 2001, Kirk noticed that jewelry and other valuables were missing from her home. She called the police, who conducted an investigation, but the items were not recovered. In April 2002, Kirk noticed that more items were missing and again reported the theft to the police. A Mumford employee, Shirley Caples, confessed to the theft and told the police that she had pawned several of the items, which were subsequently recovered. Mumford immediately fired Caples.

Kirk filed a lawsuit against Mumford for negligent hiring. At the subsequent trial, Mumford employees testified that applicants complete a written application, provide two references, and take a competency exam. The applicant also signs a document allowing Mumford to conduct a criminal records check. Then, a receptionist reviews the application and checks the references. Company employees testified that Mumford does not actually conduct criminal background checks because they are too expensive.

Caples indicated that she had prior experience at Coastal Center, a company similar to Mumford, and was currently employed in food service at a local elementary school. A temporary, part-time receptionist, who had been with Mumford only a few months, conducted the screening on Caples. The receptionist determined that Caples was an employee in good standing at the elementary school but did not call the Coastal Center.

At trial, a licensed private investigator testified that after conducting a search, for which he usually charges a $25 fee, he found that Caples had used three Social Security numbers and had ten addresses in the previous 12 years. He also found four versions of Caples name associated with three birth dates. He determined that this warranted a further search. He then found that Caples had been convicted of felony DUI and served five years of probation in another state.

The Charleston County Circuit Court found in favor of Mumford, ruling that it had no duty to conduct a background check on Caples. Kirk appealed.

Kirk argued that Mumford had a duty to perform background checks on employees because they sent those employees to the private homes of patients. Kirk contended that had a check been done, Caples would not have been hired.

The South Carolina Court of Appeals agreed with the lower court’s ruling. The court noted that had a background check been conducted, Mumford would have discovered that Caples had alternate names, multiple addresses, multiple Social Security numbers, and a DUI. However, added the court “none of these prior acts has a sufficient nexus to the crime of theft.” So even if Mumford had conducted the background check on Caples, it would not have been on notice that theft might occur, according to the court. (Kirk v. Mumford, Inc., South Carolina Court of Appeals, No. 2006-UP-179, 2006)

PREMISES LIABILITY. A club owner may be held liable for failing to protect two patrons who were attacked outside as they left the premises. The only exit from the club was on an alleyway in which fights frequently occurred.

The Zei Club, a bar and dance club located in Washington, D.C., is not located on a particular street. Instead it is located between two alleys and is accessible only from two doors—one on each alleyway.

Around 2:00 a.m. on March 23, 1998, Dominic Novak and George Valdivia were leaving the bar when they were attacked by 15 men in the alley.

Two off-duty police officers who were working as security guards at the club ran to assist the two men. The officers stopped the attack and apprehended some of the attackers. Valdivia required emergency surgery and months of physical therapy to recover from his injuries. Novak was in a coma and emerged three weeks later with permanent brain damage.

Novak sued the nightclub for negligent security, claiming that it knew fights were likely to occur outside the one exit. The club argued that it employed 15 security guards to guard the inside of the establishment and that it had no duty to protect patrons once they had left the club.

The U.S. District Court for the District of Columbia agreed with the property owners and ruled that a business has a duty to protect its patrons only if the criminal activity takes place in a portion of the premises exclusively within its control. The court determined that the club did not have exclusive control over the alley. The court ruled that though fights occurred in the alley as often as twice a month, this frequency was not sufficient to make such altercations foreseeable. Novak appealed the decision.

The U.S. Court of Appeals for the District of Columbia disagreed and found that a jury should hear the case. The appellate court ruled that the issue at hand was not whether the property owner had exclusive control of an area but whether the owner put an area to substantial special use.

Given the fact that the club’s only exit opened into the alley, a reasonable person could conclude that the club put the alley to substantial special use. Also, no other businesses used the alley at that hour and the club routinely used its security guards to clear the alley of loiterers and maintain order. The court determined that two fights a month was sufficient to establish foreseeability. (Novak v. Capital Management and Development Corporation, U.S. Court of Appeals for the District of Columbia, No. 04-7149, 2006)


PORT SECURITY. A port security bill (H.R. 4954) has been approved by both the House of Representatives and the Senate and signed into law by President Bush.

The law requires that the Department of Homeland Security (DHS) develop and implement a strategic plan to enhance maritime security. The measure also requires that DHS develop and implement a plan to improve existing programs that identify high-risk containers moving through the international supply chain.

H.R. 4954 requires that states submit to the federal government biographic information on current and future employees who have access to secured areas of seaports. The DHS will compare this information to data on terrorist watch lists.

The measure also requires that DHS establish minimum standards and verification procedures for securing containers in transit, including international standards for containers moving through the global supply chain. DHS would also submit a plan to Congress for deployment of radiation detection equipment at all U.S. ports.

EMERGENCY MANAGEMENT. A bill (H.R. 5351) introduced by Rep. David Reichert (R-WA) would establish a Directorate of Emergency Management within the Department of Homeland Security (DHS). The bill has been approved by the House Homeland Security Committee. However, it is still under consideration in the House Transportation and Infrastructure Committee and the House Energy and Commerce Committee.

The bill would also require that the secretary of the DHS update, revise, or replace emergency preparedness information for state local, and tribal governments around the country. The bill would require that DHS establish an advisory council on emergency responders, an education program on homeland security, an equipment program, an integrated national public alert and warning system, and a Gulf Coast long-term recovery office.

BIOTERRORISM. A bill (S. 2825) introduced by Sen. Jeff Bingaman (D-MN) would require that the government award grants to improve the health of those living on the U.S. border with Mexico. The program would also include a health alert system that would inform public health officials of emerging disease clusters and syndromes along the border. The system would also alert to threats of bioterrorism.

The bill has three cosponsors and has been referred to the Senate Health, Education, Labor, and Pensions Committee.

SECURITY GUARDS. Citing the reliance companies have placed in private security officers since 9-11, Rep. Robert Andrews (D-NJ) has introduced a bill (H.R. 5893) that would require employers to obtain a federal criminal records check on all contract and proprietary security guards.

Under the bill, it would be illegal to hire a guard who had been previously convicted of any one of a number of offenses under state or federal law. These offenses include illegally carrying, possessing, or using a firearm or other dangerous weapon. Other disqualifying offenses are buying or receiving stolen property, unlawful entry, aiding an escape from prison, illegal drug possession, and theft. Recklessly endangering another person, making a threat of terror, or committing any crime of assault or battery would also bar an individual from becoming a security officer.

Under the bill, employers are protected from liability if they act in good faith in interpreting and using the criminal background information. Also, the provisions of the Fair Credit Reporting Act do not apply to these background checks.

H.R. 5893 has no cosponsors and has been referred to the House Education and Workforce Committee and the House Judiciary Committee.

CHEMICAL FACILITIES. A bill (H.R. 5695) introduced by Rep. Daniel Lungren (R-CA) that would require that the DHS categorize dangerous chemicals as substances of concern has been approved by the House Homeland Security Committee. It is still pending in the House Energy and Commerce Committee.

The bill would establish the most dangerous chemical substances and require chemical facilities to establish procedures to protect the public from them. Chemical facilities would be required to establish standards, protocols, and procedures for vulnerability assessments and facility security. Facilities using the highest-risk chemicals would have to conduct penetration exercises and establish security performance requirements.


New Jersey

EMPLOYMENT. A New Jersey law (formerly S.B. 1123) will protect employees from intimidation over religious and political matters. The law makes it illegal for employers to require that workers attend meetings or participate in communication about political or religious issues. The law is intended to combat the practice of holding mandatory meetings to discuss religion or express support for a political candidate or point of view. The law also protects employees from retaliation if they raise concerns about activity that might violate the law.

Employers may continue to hold captive-audience meetings to express their views on unions. Also, religious and political groups are exempted under the law so long as the meetings or communication pertains to the regular work of the organization.

Violators are liable for civil fines of up to $1,000 for a first offense and up to $5,000 for subsequent offenses. Employees can get restraining orders against violating companies as well as reinstatement, lost wages, and punitive damages.


COMMUNICATIONS. A bill (A.B. 1848) in California would require that state officials provide an annual report to lawmakers on the state’s interoperable public safety communications network. Existing law says that such as system must be established using federally specified frequencies to ensure that first responders can communicate during an emergency.

This column should not be construed as legal or legislative advice.