In: Operations Management
Illinois law does not require an employer to ensure the safety of every person who happens to come into contact with the employee simply because his / her employee status. Every situation is fact-specific. The duty to refrain from hiring or retaining an employee, who is a threat to third-persons, to whom the employee is exposed, must be considered especially in the pre-hiring process.
Bob was hired by GRP, Inc. as a Quality Control Technician for its manufactured items. GRP, Inc. manufactures specialty security systems, which it installs and maintains for both commercial and residential use. Bob's position requires him to visit local businesses and private residences wherein GRP's security systems have been installed and are maintained under service contracts.
GRP, Inc. required, as a condition of employment, a background check on all employees. Bob successful passed the background check after an initial offer of employment was made. Unknown to GRP, Inc., Bob misrepresented his identity, submitted a false social security number, and lied about his former experience.
The police arrested Bob six months into his employment with GRP, Inc., after one of GRP, Inc.'s corporate customers learned that Bob stole approximately $50,000.00 (in cash and securities), while at its premises and while making various service calls on behalf of GRP, Inc.. Apparently, Bob had access to the cash and securities while at the company's premises.
At the time of Bob's arrest, he already spent and converted the cash and securities. He subsequently pled guilty to the criminal charges and is awaiting sentencing by the judge. GRP, Inc. fired Bob after learning of his guilty plea (he was suspended for investigation following his arrest).
The company, ABC, Inc., which was the customer of GRP, Inc. involved in this matter, has now sued GRP, Inc. seeking to recover the $50,000.00 loss of its cash and securities. Its argument is that GRP, Inc. negligently hired Bob and is, therefore, liable for damages. GRP, Inc. denies any claim of liability. What are the arguments for and against liability based on these facts and your understanding of the law? Who wins? Why / why not?
Arguments for liability of GRP Inc. towards payment of $50000 to ABC Inc. are that an employee of GRP Inc. who represents the company acts on behalf of the company itself. So if Bob stole $50000 from ABC Inc., it is the responsibility of GRP Inc. to return that amount to ABC Inc. since Bob represeted GRP Inc. at the time of theft and hence GRP Inc. was liable for all the losses caused to ABC Inc.
Arguments against liability of GRP Inc. towards payment of $50000 to ABC Inc. are that Illinois Law does not require an employer to ensure the safety of every person who happens to come into contact with the employee simply because of his / her employee status. Hence even if Bob stole money from ABC Inc., as per Illinois Law GRP Inc. is not responsible for the actions of Bob which caused damages to ABC Inc.
In my opinion, GRP Inc. wins the case because the case happened in the state of Illinois and in this case, as per law the duty to refrain from hiring or retaining an employee, who is a threat to third-persons, to whom the employee is exposed, must be considered especially in the pre-hiring process. But Bob submitted fake documents to GRP Inc. at the time of hiring and he misrepresented his identity and truth could not be ascertained at the time of his hiring. Also since Illinois law does not require an employer to ensure the safety of every person who happens to come into contact with the employee simply because his / her employee status, hence it is not the responsibility of GRP Inc. to be liable for the losses caused by Bob to ABC Inc. and hence GRP Inc. wins the case.