At this point, the answer to that question should be obvious: employers are at far greater risk of being sued for not checking than they are if they carefully check both backgrounds and references. Not checking is very much like hiring people directly off the street and taking them at their word that they have the experience, training, and skills to do whatever the job happens to be – and hoping they’re telling the truth!
The only basis for being sued, if the employer checks references and does a background check without the candidate’s permission, is for invasion of privacy. However, if the employer makes sure every candidate signs a comprehensive waiver granting permission to do a background and reference check, that potential problem is eliminated.
Of course, it’s still possible to be sued for basing an employment decision on a response to a discriminatory question.
On the other hand, negligent hiring litigation is becoming more and more common. Failing to use reasonable care in the hiring process leaves the lawsuit door wide open for nearly any type of harm an unchecked employee may cause to others – especially when it can be shown that the employer could have reduced the risk of harm to others by careful checking. It’s really not possible to have too much information about a prospective employee; and, of equal importance, job seekers who are who they claim to be and can do what they claim they can should be universally happy to let prospective employers check whatever they want within reason, so they can increase their chances of being hired!
All of this is nothing more than common sense – put within a legalistic framework.