Governor Signs Law on Inadmissibility of Evidence of Employee Criminal History in Negligence Cases Against Employers

By Ted Olsen and Brooke Colaizzi

Who would have thought that convicted criminals and employers would join forces on proposed legislation?  Who would have thought that, in a sagging economy, the Colorado General Assembly would attempt to enhance the employability of convicted criminals, of all conceivable segments of the population? 

On March 25, 2010, Governor Ritter signed House Bill 1023, which itemizes various conditions under which evidence of an employee’s criminal history is not admissible in lawsuits against employers for the negligence of their employees or the employers’ negligence in hiring the employees.

Although this law is generally beneficial to some employers in some situations, its value should not be overestimated, as explained further below.  Oddly, the stated purpose of the law is to reduce "unnecessary barriers" to employment for persons with criminal convictions, not exactly a group with strong political clout.  Despite the new law, employers should continue to be wary of employing criminal offenders.

House Bill 1023 amends Colo. Rev. Stat. § 8-2-201, a Colorado statute that makes employers liable to any agents or employees who suffer injuries caused by other agents or employees of the employer.  Section 8-2-201 eliminates the so-called "fellow servant rule," a common law rule that immunized an employer from liability if one of its employees injured another employee. 

The new law provides that evidence of the criminal history of an employee or former employee may not be introduced "in a civil action against an employer or its employees or agents" based on the conduct of the employee or former employee, under any of four conditions:

  1. The nature of the criminal history does not bear a direct relationship to the facts underlying the case; or
  2. Before the acts giving rise to the civil action, the criminal record was sealed, or the employee or former employee received a pardon; or
  3. The record relates to an arrest or a charge that did not result in a conviction; or
  4. The employee or former employee received a deferred judgment at sentencing, and the deferred judgment was not revoked.

The new law encourages the hiring of criminal offenders by employers that have not done so in the past due to a concern that (a) an offender on-the-job would injure another person, and (b) the injured party would use evidence of the offender’s criminal history to show his or her dangerousness or recklessness (or the employer’s negligence in hiring such a dangerous or reckless person).  With less risk of the evidence of the offender’s criminal history being admissible, at least in theory, employers would face less legal risk in hiring the offender.

This new law is highly deceptive.  One initial question is whether House Bill 1023 is limited strictly to cases where an employee with a criminal history injures another employee or agent of the same employer – the subject of Colo. Rev. Stat. § 8-2-201 – or extends to all cases where an employee with a criminal history injures anyone.  This is a significant question because employers’ workers’ compensation coverage has virtually eliminated the "fellow servant rule."  (Employee #1’s exclusive relief against the employer for Employee #2’s negligence is limited to workers’ compensation.)  If the new law only applies to fellow servant rule cases not barred by workers’ compensation, then it will apply to only a handful of cases.  On the other hand, if the new law applies to any case where anyone (whether or not a fellow servant) is injured by a criminal offender in the course and scope of the offender’s employment, then it will be applicable to a large number of negligent hiring and negligent supervision claims against employers.

Another deceiving feature of this law is the implication that such criminal history evidence has always been received by judges in negligence cases against employers in the past.  In reality, this new law merely sets forth in a statute certain factors that have been used by judges to weigh whether such evidence should be received.

By no means should House Bill 1023 be interpreted as making criminal background checks unnecessary.  Given a choice between avoiding entirely the hire of a dangerous applicant, and hiring the dangerous applicant and then arguing to exclude evidence of his criminal record in a later negligence case, most employers would choose the former.  Employers that are required by Colorado law to conduct criminal background checks or review the criminal history records of new hires into certain positions must still do so – the new law expressly does not supersede those Colorado statutes.

One final warning about the new law:  this bill provides some protection for employers that get sued for hiring criminal offenders.  But what about employers that want to sue?  Some employers are injured by criminal offenders, and in those instances, they want judges and juries to consider evidence of the person’s criminal past.  For instance, if a fast food restaurant hires a personnel agency to send a temporary employee to work in a cashier position, and the personnel agency sends a convicted criminal, who then steals from the cash register, the temporary agency would be responsible, and the restaurant would want to present the very evidence that House Bill 1023 may exclude.

Sherman & Howard has prepared this advisory to provide general information on recent legal developments that may be of interest. This advisory does not provide legal advice for any specific situation. This does not create an attorney-client relationship between any reader and the Firm. If you want legal advice on a specific situation, you must speak with one of our lawyers and reach an express agreement for legal representation.

©2010 Sherman & Howard L.L.C.                                                        May 10, 2010