Why the Larry Nassar Scandal Has Everything to Do with Employment Law and Background Checks

By Michael Klazema on 1/26/2018
On January 24, Larry Nassar was sentenced to “40 to 175 years in prison” for assaulting and molesting at least 150 underage girls. Nassar, a former doctor for the USA Gymnastics team and osteopathic physician and professor at Michigan State University, had previously been sentenced to 60 years in prison for child pornography. His victims, including famous Olympic athletes, testified against him at length, detailing the nature and extent of his abuses.

With Nassar’s conviction and sentencing, it seems like the book has been shut on a scandal that dates to the 1990s. In truth, the story may just be starting. While Nassar’s fate has been sealed, the same is not true for USA Gymnastics and MSU, both of which could be held liable for negligent hiring or negligent retention.

What began as a major sex abuse scandal has potentially become a landmark employment law case. Already, the two entities that employed Nassar—and put him in a position to abuse underage girls—are embroiled in controversy.

There are four big questions at this point:

1) Who at these two institutions knew about Nassar’s criminal behaviors?
2) How much did these individuals know?
3) How long did they know?
4) What did MSU or USA Gymnastics officials do once they were made aware of Nassar’s conduct?

Nassar began working as the national medical coordinator for USA Gymnastics in 1996. He began teaching and practicing medicine at MSU the following year. He retired from his role with USA Gymnastics in 2015 when the organization became aware of “athlete concerns” about him. In September 2016, The Indianapolis Star published the first public accusations against Nassar. MSU fired him on September 20 of that year in the wake of the Star article. Nassar was arrested in December 2016 on child pornography charges.

Either MSU or USA Gymnastics could be found liable for negligent hiring if there is a reason to believe they could have foreseen Nassar’s actions before hiring him. So far, it appears both organizations conducted background checks on Nassar and he had no criminal history to speak of. The allegations against Nassar date back to 1992 when he was still in medical school, but there is no evidence MSU or USA Gymnastics had access to this information when they hired Nassar.

The true employment law implication here has to do with negligent retention. In other words, was there a point when MSU or USA Gymnastics knew about Nassar’s misconduct but failed to do anything about it?

The first murmurs of Nassar’s sexual misconduct appeared early in his tenures with both USA Gymnastics and MSU. In 1998, an MSU athlete allegedly reported concerns about Nassar to university trainers and coaches. Three other MSU student-athletes allege they notified coaches and trainers about Nassar’s inappropriate behavior. It appears the university never formally investigated the allegations.

USA Gymnastics has not been as roundly implicated for negligent retention. However, the organization did allegedly fail to report Nassar to authorities until five weeks after becoming aware of allegations against him in 2015.

Already, the fallout is starting: MSU’s President and Athletic Director both resigned from their posts, as did the entire board of USA Gymnastics. In February 2017, MSU suspended gymnastics coach Kathie Klages, who allegedly discouraged several of her athletes from filing sexual assault complaints against Nassar over the years. Investigations are pending at both organizations to determine how deep the cover-up goes.

There are several lessons here that any employer can learn about negligence, liability, and handling misconduct.

First, complaints and accusations—whether they deal with bullying, sexual harassment, sexual assault, or discrimination—must be taken seriously and investigated thoroughly. It is not up to a manager, coach, CEO, or administrator to independently decide whether allegations hold water.

Second, allegations involving minors must be reported to the authorities immediately, even before an internal investigation takes place.

Third, all employers need policies in place that give victims a way to report misconduct safely and without fear of judgment or retaliation. By encouraging employees, clients, customers, or students to report concerns, businesses can avoid being blindsided.

As the Nassar investigation moves forward, it’s clear there is more required to avoid negligence than conducting background checks. As an employer, you are accountable for the safety of the people you employ and the clients you serve. Taking issues of abuse and misconduct seriously is one of the best ways to make sure you are doing your due diligence.


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