Hiring Successfully: Legal Considerations and Best Practices for New Employees

Proper implementation of these three items will help minimize the potential for legal liability

Companies hiring new employees face a daunting array of legal requirements and concerns. Although the law’s application differs from employer to employer, most organizations can ensure success for both themselves and their new hires by giving careful thought to a few key matters. In particular, companies should examine and confirm they are making the best use of background checks and drug tests, employment agreements and onboarding programs. Proper implementation of these three items will help minimize the potential for legal liability and can maximize the efficiency and effectiveness of the company’s most valuable asset – its people.


Background checks and drug tests are powerful tools that can inform and reassure employers about their new or potential employees. Of course, a multitude of state and federal laws, including the Fair Credit Reporting Act, the Colorado Employment Opportunity Act and the Colorado Consumer Credit Reporting Act, govern the use of such screenings; employers must be careful to comply with all laws and regulations. Additionally, the Equal Employment Opportunity Commission can investigate any discriminatory impact resulting from the use of background checks or drug tests. However, despite their potentially burdensome legal requirements, and although generally not mandated, most employers should make it a best practice to perform background checks and drug tests on potential new hires. And as timing is important from a legal standpoint, employers should generally make an offer of employment before requiring a background check or drug test. The offer can be contingent upon the new hire successfully passing all screenings.

Companies that use background checks and drug tests can be more confident they are hiring honest and responsible employees, and can help ensure safe workplaces by reducing the likelihood of employee theft, violence or harassment. Moreover, background checks can serve as critical defenses against lawsuits for negligent hiring. Although background screenings are not without drawbacks (they may be time-consuming and costly and can contain errors) the benefits often outweigh the costs and burdens of compliance. Accordingly, most employers should make it a practice to perform background tests and drug tests.


Another important consideration for employers is which employment agreements, if any, they will require new hires to sign. At a minimum, all companies should have comprehensive handbooks that discuss, among other things, at-will employment status, anti-discrimination and harassment policies, equal employment opportunities, pay practices and benefits offered. Companies should require a signed acknowledgment and statement of understanding from all employees. 


Additionally, companies must determine whether the new hire should sign arbitration, nondisclosure, noncompetition or intellectual property agreements. These agreements are critical when protecting the company’s trade secrets, proprietary information and overall competitive advantage. Each company’s and new hire’s individual circumstances will determine which of these agreements are applicable, but to best protect themselves, companies should at least give thoughtful consideration to these agreements and discuss their applicability and enforceability with qualified legal counsel.


It is also a best practice to ensure your company has an effective employee training and onboarding program. A good onboarding program will not only provide the new hire with the tools and information necessary for success within the organization, but will provide crucial legal training that makes clear that the company does not tolerate abusive or illegal behavior by any of its employees.

For example, the company should impress upon new hires the importance of abiding by anti-discrimination and anti-harassment policies. The company should also demonstrate to the new hire that the company’s culture – and not merely its written rules – prohibits abusive behavior. The company can do this by hosting interactive discussions or programs with co-workers and supervisors that explain how, for example, the company investigates reports of discrimination, how it promotes bystander intervention, or how it rigorously applies its policies equally to all employees, regardless of their rank or importance within the organization. Showing that the company and its employees live the values propounded in the handbook allows a new hire to more quickly and effectively learn what is appropriate and what is not, thus minimizing legal risk for the company.

Hiring new employees can be an exciting process and one emblematic of a company’s growth and success. By thoughtfully utilizing background checks and drug tests, employment agreements and onboarding programs, companies can better create safe, secure and inclusive workplaces. Effective use of these practices can increase employee morale, efficiency and retention and minimize legal risk for both the employer and the employee.

David C. Roth is an attorney with the Denver office of Fisher Phillips LLP. His practice focuses on employment litigation, counseling and defending employers against a variety of claims, including discrimination, retaliation, harassment, wage and hour and workplace safety. He also protects trade secrets and confidential information from misappropriation by competitors and former employees. For additional information, you may contact him at (303) 218-3647 or droth@fisherphillips.com.

Categories: Management & Leadership