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☛ The pros and cons of background checks 2-13-18

THE PROS & CONS OF BACKGROUND CHECKS

By Rick Dennis
Feb. 13, 2018

Arguably, the most often debated subject in the private sector business arena is the necessity of conducting background checks.  Most often proponents argue, “it’s a sound business principle” while opponents opt for the age ole excuse “it’s a violation of privacy.”

These two concepts have been debated through time and memorial. Each are viewed as ideologies, with only one being a clear winner in the common sense arena.  Background checks have the advantage over the “violation of privacy issue” simply due to the fact that we live in a litigation (lawsuit) and security world.

For the record, and due in-part to my law enforcement and military resume’, my life has been constantly subjected to background checks for: security clearances, law enforcement hiring, military and private security services. My typical background check includes: an annual criminal and civil records check, fingerprint evaluations, peer association including  references, education and work history verification, medical history evaluation, as well as a DMV (Department of Motor Vehicle) a driving records check. On occasion and depending on a Personal Detail Application (PDA) – Personal Protection engagement, I’ve been required to undergo a polygraph examination, i.e., “lie detector test.” Therefore, background checks and I are old friends – “so-to-speak.”

In an article entitled “Why Do Background Checks – The Pros and Cons” the author’s first paragraph signals the reading audience as to why “Background Checks Are A Necessity, e.g.,:  A Pre-Employment Background Check has become a matter of necessity. Too many applicants make false claims on their job applications and resumes or attempt to cover up prior criminal activity. About 40% of the background checks processed by “A Matter of Fact” turn up at least one serious discrepancy.

Yet in another “matter-of-fact” statement the author asserts the pros of employee background checks.

Why do background checks? The benefits of comprehensive employment background screening include: increased applicant and new hire quality, reduced workplace violence, reduced negligent hiring liability, reduced losses from employee dishonesty, making the right hire the first time, and avoiding negative publicity. The bottom line is that pre-employment background checks help an organization be more successful. That means greater profits to for-profit organizations and greater impact for nonprofit’s.
Click for article on background checks>> 

There’s a whole host of relevancy that can be applied to any industry, other than the ones mentioned in my background synopsis, to justify the utilization of background checks – including the horse industry. Whether it’s for an individual applying for a directorship, board of directors/member nominee, a President or other officer, trainer, or sale company owner. In my opinion, and as a matter of fact – “anyone in a position of authority, Hall of Fame members that members and kids look up to, or those who provide clinics – especially for children, or under-age minors. Also included should be anyone in a position of responsibility or acting as a fiduciary whose authority is handling thousands of dollars (in some cases millions of dollars)  should have a background check. After all, trainers and Hall of Fame members are the icons of the horse industry representing both the non-profit horse organization, a specific performance group and also the general public. It’s irresponsible for a non-profit horse organization to elevate such an individual to its highest stature position without knowing all there is to know about that individual and ending up regretting their decision later on.

It’s just plain old good common sense to represent an individual in a factual manner instead of representing an individual as a good guy when, in reality, you may know nothing or very little about that person. I’m an active proponent of implementing a rule adoption requiring any individual included on a horse non-profit’s Trainers Directory, Directorship, or Board Member is only eligible for inclusion after a thorough background check.

My advocacy of performing background checks stems from the fact that after 911, the Patriot Act was enacted whereby individuals setting foot on any dock, offshore vessel or offshore oil and gas-producing platform to collect urine for employee drug and alcohol screening for sobriety has to have a security clearance as ordered by the Department of Homeland Security (DHS).

Therefore, if the private sector contractors has to have a background check to set foot on a dock in the United States of America, shouldn’t the same sound business principle be applied to the private sector horse industry, especially for those individuals who have a major contact with the general public either by representing a specific horse nonprofit or a specific performance category during his or her endeavor?  As a Risk Analyst, it’s just good business. The cost: $50 to $500.

WHERE TO HAVE A BACKGROUND CHECK PERFORMED:

Normally, a typical background check previously mentioned in the above categories can easily be performed by a private investigator, a law enforcement agency, a private security agency or an individual specializing in background checks. My personal preference is to use an outside individual or agency instead of performing them myself. This relieves me of the bias theory.  Equally, I’m not an advocate of using internet background check systems simply due to the fact the information contained therein might not be accurate or it may be deficient. My own representative of choice is “Christina Robertson Legal Services of Oceano, California. (805) 801-0346 or (805) 903-3695.

Ms. Robertson states that “If you truly want a thorough background check, you must search through Open Source Intelligence Gathering (OSINT). This is where Ms. Robertson excels.

What exactly is OSINT? Open Source Intelligence is the collection and analysis of information that is gathered from public or open sources. OSINT sources can be  media, internet, public government data, professional and academic publications, commercial data and “grey” literature, which could encompass technical reports, patents, business documents, newsletters, etc.

OSINT differs from research, in that it applies the process of intelligence to create knowledge for a specific decision by a specific individual or group.

For the record, if you’re going to have a background check performed on an individual for employment, a training engagement, or any of the criteria included in this article, it’s going to require a signed “Authorization Release Form” from the individual specifically authorizing the background check and release of information, especially if it’s referencing an employment or other work engagement decision.  That’s why you see a “disclaimer” on internet search engines advertising background checks.  A prudent business practice is to have a professional conduct this type of research of information for you.

POSITIVE FACTORS RELATED TO PERFORMING BACKGROUND CHECKS:

Increase Applicant And New Hire Quality:

The first benefit of background checks that most clients see is an increase in applicant quality. We often hear from our new customers that they saw an almost immediate improvement in the quality of applicants once the word got out that they were conducting thorough background checks. A complete employee screening process results in fewer applications with serious discrepancies such as criminal records or a registered sex offender status. A background check requirement also discourages applicants who are trying to hide something, increases applications from applicants who want to work in a safe environment and increases the quality of new hires due to an improved applicant pool and improved selection process

Reduce Workplace Violence:

According to a survey conducted by the U.S. Department of Justice, the staggering cost of violence in the workplace includes the fact that 1.75 million days of work are lost each year by victims of workplace violence. The cost in lost wages account for about $55 million per year. When less direct, but further-reaching costs are considered, such as lost productivity, legal expenses and diminished public image, the annual cost of workplace violence could measure in the billions.

An Employer’s Imperative:

Employers have a moral and legal obligation to provide a safe work environment. Therefore, knowing whether a potential employee has been involved in criminal activity such as sex crimes, drug or other substance abuse, reckless behavior, dishonesty, theft or dangerous and violent behaviors, allows the employer to determine if an applicant is appropriate for the job and work environment. It also helps the employer determine if the applicant poses a potential threat to other employees.

 

How Do Background Checks Help?

Prior history is a good predictor of future performance. Background checks are used by employers to identify applicants prone to unacceptable workplace behavior. Background check tools such as criminal-record checks including instances of animal abuse reports, registered sex offenders, incarceration for violent offenses,  prior employment verifications, education verification, license verifications and other research tools can reveal potential problem areas.

 

Protect Against Negligent Hiring Liability:
“What is Negligent Hiring Liability?” Negligent-hiring liability holds employers responsible both for what they do know and what they should have known about their employees, agents, assigns or representatives. It can even hold employers responsible for employees’ actions off the job. Courts have repeatedly affirmed that employers have a duty to exercise reasonable care in hiring individuals who, because of the nature of their employment, may pose a threat to the public.

Cost of Employee Dishonesty:

The typical organization loses 5 percent of its annual revenue to occupational fraud. The median loss caused by occupational fraud was $140,000. More than one-fifth of fraud cases caused losses of at least $1 million. Small organizations are disproportionately victimized by occupational fraud. See, ACFE: 2012 Report to the Nation on Occupational Fraud and Abuse. Employee theft and dishonesty can also reduce production, damage public confidence, destroy employer reputation and negatively affect employee morale.

A particular case I was involved in the horse industry was litigated by criminal charges in the Gainesville, Texas, courts whereby an assistant trainer and exercise rider, “Dakota Lindsey Harrell”  was indicted and accused of accessing a client’s bank account numbers from client-provided checks paid to the trainer for services rendered. This individual was alleged to have embezzled over $500,000 over a period of years from the client’s personal bank account. The incident was resolved by the Texas Criminal Justice System. However, this is just one instance where a background check in the horse industry may have been favorable to the trainer and the client in preventing this gross theft of funds.

I performed a Risk Analysis of the incident and initiated a series of counter measures for a recovery of assets, as well as changing the client’s entire banking process to prevent a future occurrence.

Click for theft case>>

Prevalence of Employee Dishonesty:

Theft and fraud is something that employers are aware but perhaps a bit complacent. The true prevalence of these crimes is pervasive and not well known. Approximately 30 percent of employees admit to stealing from their employers. The perpetrators are not those one would expect: 41.2 percent are managers, 39 percent are employees and 19.3 percent are owners or executives.

Therefore, it’s incumbent for anyone, whether a 50(c)3 non-profit horse organization, or any other support group of the horse industry, to do all it can to protect itself from unscrupulous individuals in our society. Remember, “failing to act” after knowing something about an individual could result in a “negligence” jury verdict for the individual or company later on, due to a mishap involving that individual.

 

AMERICAN HORSE INDUSTRY, AVOIDING THE PITFALLS:

In my book I cover a myriad of security aspects applicable to the horse industry, including implementing drug testing and background checks for employers and trainer selection.  A copy can be ordered either off the internet or from my website: http://www.windrivercompanyllc.com. It’s a five-star rated book.

“Until Next Time, Keep Em Between The Bridle”

WIND RIVER COMPANY LLC
Richard E. “Rick” Dennis
Managing Member
Office/Mobile: (985) 630-3500
Email: windrivercompany@gmail.com
Web Site: windrivercompanyllc.com

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4 Comments

  1. If a person doesn’t pass a background check, a potential employer needs to know why. It could have a disastrous effect on the employers’ business. If the potential employee is a nut case it could endanger the lives of many others – mass shootings, etc. I’m all for them and have done many for employment. But then I always pass a background check. Keep on keeping on Glory Ann. You keep some of them honest.
    Kathy

  2. Great article! I’m betting some people would be shocked if they actually did a background check on some horse trainers!!
    Bill

  3. Rick,
    Great analysis and report. All one who is in doubt has to do is watch the White House fiasco with Rob Porter and reference back to the recent embezzlement scandal in the Midwest involving millions and a Quarter Horse trainer (her name escapes me).
    Your point about positions of authority and minors is right on too. Thanks for your knowledge.
    Mark

  4. Mr. Dennis, I just wanted to contact you and say I agree with your Background Check article in every respect. I believe it’s a duty for every employer and horse organization to conduct background checks to promote safety not only in the work place but also at public events.

    What we’re seeing today is an erosion in the moral fiber of our country. The same is happening at the major sports level. Our kids deserve to have role models of the highest character. Thank you for bringing this subject up for discussion.

    Mike

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