Smart hiring can not only help your business success but also help protect you legally.  If you have employees, you probably already know that paid personnel are more than just worker bees in your office following the queen bee.   They have the power and means to expose your business to significant liability.

Your business is “vicariously” liable for virtually all your employees actions while acting within the scope of their employment.  Generally, you will not be liable for traditional intentional torts (acts requiring specific intent) outside the scope of employment, but if you are negligent in hiring an employee, you still may be held liable.

So for example, if one of your employees steals the identity of one of your customers (an intentional tort), you may not be liable; however, what if that employee did not need access to confidential information and was exposed to the sensitive data unnecessarily.  Even worse, what if you hired someone that had a criminal record for check fraud.  Because you could have limited the exposure of the confidential information to that employee or have done a background check, your business is now exposed to a legal liability.

You will end up being the target. You know that your employee does not have the money to defend a lawsuit and pay for a judgment.  If an attorney can find a way to add someone with money in their pockets to a lawsuit, they will find a way.

The point is that even if you have the protections in place by creating strict rules and guidelines, your employees can easily get you into a legal mess.  In a case our firm handled six months ago, a company providing non-legal services had a salesman who represented that the company was a law firm and that he was a paralegal.  It did not matter that the company’s website clearly stated it was not a law firm, the salesman’s representation was enough to expose the company to liability.

It is easier said than done, but hiring and managing employees well will help protect you legally.  Do your homework before your hire.  Study their history and follow through with communicating with your employees with company policy.