Negligent hiring generally refers to the hiring of a person that the employer knows or should have known possesses "some attribute of character or prior conduct that would create an undue risk of harm to others in carrying out his or her employment responsibilities." Past misconduct of the employee is primary indicator of the employer's negligence. Courts also consider the nature of work for which the employee is hired. Therefor, the standard of due diligence expected of an employer in its hiring practices generally depends on the employee's anticipated contact with others in carrying out the normal duties of employment. The employer's required standard of care increases substantially when the employer anticipates the employee will have greater contact with the public. This enhanced duty of care is also triggered when the nature of the employment fosters close contact and a special relationship between particular persons and the employee.
A plaintiff who alleges negligent hiring must first establish that the employer owed the plaintiff a duty to hire and retain only fit employees. A duty exists when there is some association or connection between plaintiff and employer. Courts have found such connections and corresponding duties in several situations such as: business-customer, student-district/school, landlords-tenants, prison officials-prisoners, youth organization-youth, and housing authority-tenants.
After determining that a duty is owed, the court then considers the nature of the employer's responsibility. The extent of this responsibility is based on the nature and frequency of contact with others. Therefore, it is enhanced if the contact represents a potential risk of harm to a third party. For example, counselors generally have regular, intimate contact with counselees who may be emotionally fragile and vulnerable, good reason why employers of counselors should exercise considerable care when making hiring decisions.
The last factor that a court considers in determining whether an employer has breached this duty is whether or not any evidence existed prior to and at the time of the hiring. In some jurisdictions the specific injury sustained by the plaintiff need not be foreseeable as long as there was a foreseeable risk of some injury. In these cases, the requirement of pre-employment investigation is well-established. Reference to case law is instructive, as is any evidence in the case at hand that the employer has a reasonable basis to suspect that an employee might represent a problem. Depending upon the seriousness of a suspected problem and/or frequency of occurrence, it might be reasonable for an employer to conduct a review of an employee's complete training background. This is an important issue in a negligent hiring action since the defendant is held accountable for knowledge held, or which reasonably should have been known at the time of the hiring.