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Corporate America’s growing use of outsourcing to cut labor costs-without adequate background checks-has put it at substantially greater risk of litigation, employment lawyers are warning. Employees with troubled or criminal pasts are sneaking into the labor force, upping the liability stakes for companies. At issue is one critical question: Who is responsible for the background check-the employer or the staffing agency? That legal debate has already surfaced in the courts, where companies and staffing agencies are pointing the finger at one another, each blaming the other for a bad employee that has slipped through the cracks. “More and more what you’re seeing now is that when companies get into trouble with a non-employee doing something, they’re pointing their finger at these staffing agencies,” said Craig Annunziata, partner in the Chicago office of Fisher & Phillips, a national employment law firm based in Atlanta. Annunziata also views outsourcing as new ammunition for plaintiffs’ lawyers. “If an employer has someone working for them and something goes wrong, a diligent plaintiffs’ lawyer-when they find out there’s a staffing agency involved-is going to sue both,” he said. “If you think about it, where there might have been just one defendant, now there potentially could be two. It is double the litigation.” A murder in N.J.
To avoid a lawsuit, take these steps While outsourcing can open the door to litigation, it doesn’t mean that companies should shy away from it entirely. Employment attorneys note that there are steps that a company can take to avoid a lawsuit when using nonemployees. Rule number one: Get a background check. “The background check is the biggest thing,” said Tyler Paetkau of the San Francisco office of Chicago’s Winston & Strawn, who counsels staffing agencies and companies on outsourcing issues. “I think it just makes good sense to spend money on a thorough background check. Even just basic stuff is good.” Background checks should be done on:

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