Earlier this year, Arizona Governor Doug Ducey signed HB 2311, strengthening limited liability protection for employers when hiring employees or contracting with independent contractors who have been previously convicted of criminal offenses.
Specifically, the law prohibits litigants in negligent hiring cases from introducing evidence of an employee’s or independent contractor’s criminal offenses and/or convictions occurring prior to their date of hire. However, the limited liability protections employers will receive under the new law are somewhat reduced by the following exceptions:
- The legislation’s definition of “criminal offense” does not cover all past crimes, but rather, is limited to “any criminal offense except violent offenses and sexual offenses,” meaning evidence of crimes that are violent and/or sexual in nature may still be submitted as evidence in negligent hiring cases.
- The liability limitations do not preclude potential lawsuits based on negligent supervision theories.
- The limited liability protections will not be afforded to employers in situations where the employee/contractor was convicted of a criminal offense that is directly related to the nature of the work being performed and the conduct giving rise to the action if the employer knew of the conviction or acted in a grossly negligent manner in not knowing of the conviction.
- Finally, the law’s limited liability protections do not apply in cases that are based on any of the following causes of action:
- Misuse of monies or property by the employee/contractor if the employee/contractor has previously been convicted for an offense encompassing fraud or the misuse of monies prior to being hired or contracted, and it was foreseeable that the position would involve fiduciary responsibilities.
- Misappropriation of monies by an employee/contractor who was hired or contracted as an attorney, if the employee/contractor had prior convictions associated with fraud, the misuse of monies, or properties prior to being hired or contracted.
- Violent offenses or improper use of excessive force by an employee/contractor hired as a law enforcement officer or security guard.
The provisions of HB 2311 are set to take effect on August 3, 2018. Arizona employers who have questions regarding employee reference checks and negligent hiring should contact one of Employers Council’s Arizona-licensed attorneys for guidance.
 The provisions of HB 2311 will be codified at Arizona Revised Statutes § 12-558.03.