08:54 PM

Why Background Checks Matter

What you don't know about a job candidate could severely hurt your business

This is the story of three guys who met in college and formed a small high tech company a couple of years ago. Their growth was modest, but steady. Soon they had 20 employees. They were poised for additional growth, but knew they needed a new CEO to take them there. Candidates were interviewed and the men made an offer to the most impressive one.

To take the position, the candidate would have to relocate from another state, but he was excited about the opportunity and discussed buying a new house and checking out schools in the area for his kids.

The three guys called the references on the candidate's resume, who all verified the information provided. Next they faxed their potential CEO an offer, which he signed and sent back. It was only then that one of the partners decided to go to their new CEO's business Website and check it out. It was impressive.

Until the page about ethics and values. Because of his religious beliefs, the new CEO listed a number of companies that he refused to work with, many of which were his new employers' clients.

In a panic, the partner Googled his new CEO's name and up popped a series of lawsuits filed against him, all stemming from protest activities in which the CEO participated in the name of defending his religious belief, with one lawsuit filed by a reputable magazine whose site he had allegedly hacked.

"Everything they did [to check out the new CEO after their offer was accepted] could have been done without a third party," said Erik Winton, an employment lawyer with Jackson Lewis, who counseled one of his clients on a similar case. "They didn't even need authorization. It's amazing how much information you can find."

Ultimately, the job offer was rescinded and, predictably, the three partners were sued. They eventually settled the case for an undisclosed amount.

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