What would you do? New hire may have hidden problem

Periodically, we ask three HR managers how they’d handle a difficult problem at work. Today’s problem: A new hire could have a dark, hidden past.
The scene
Chuck Rivera began speaking as soon as he entered Stan’s office. “This company has made a big mistake in hiring Woody Sullivan.”
Stan, the HR manager, got over his surprise and said, “Sit down, Chuck, and let’s talk about this.”
Chuck settled into the chair and resumed: “I used to work with him in the accounting department at ABZ Corp. several years ago. That’s why I almost choked when I saw him here today.”
“What do you mean, Chuck? Why?”
Chuck leaned forward and said, “He’s a racist of the worst kind.”
“That’s a serious charge,” Stan replied. “Did he do or say something to you when the two of you were at ABZ?”
“Not directly,” Chuck answered. “He’d make a lot of indirect comments to me and other employees who weren’t white. The guy was always in the HR office getting a lecture about his attitude.”
Clean reference checks
Stan had done the usual thorough reference checks on Woody, and nothing like this had popped up.
“Without some tangible proof that Woody’s a racist, we can’t just assume he is,” Stan said.
“Don’t you believe me?” Chuck asked.
“It’s not about what I believe,” Stan replied. “It’s about what we can prove.”
“OK, Stan,” Chuck said as he got up. “But you’re headed for big trouble with this guy.”
If you were Stan, what would you say or do about Woody?
Nancy Church, HR director, Nashville, TN
What Nancy would do: I’d tell the employee who made the charge to keep quiet about it and that we’re going to have to start Woody with a clean slate, since we have no proof that he’s a problem. I’d also probably monitor Woody closely to watch for any incidents, but I don’t think you can take action until you actually encounter a problem.
Reason: Without proof of the charge, you have to give Woody a fair shot to behave and perform as expected.
Jolene Snyder, HR manager, Ardmore, OK
What Jolene would do: I’ve encountered situations like that at least twice, so I can tell you that our approach was to treat it as if the only information we had was what we learned during the recruiting process – acting as if we’d never heard a complaint. Did it work out? Yes, in both instances the people turned out to be good employees.
Reason: You made the hiring decision based on the best information available at the time, so you stick with that. Plus, even if the problem did exist at one time, the person may have changed.
Alison Donley, general manager, West Grove, PA
What Alison would do: First, I’d ask the complaining employee to keep all of this confidential. Then, I’d consider having a conversation with the new hire, explaining that we have some unsubstantiated charges of misconduct in a previous job, but that we’re going to proceed as if we’d never heard the charges.
Reason: Just telling the new hire that we’ve heard about a problem could be good way to warn him, “We’re going to give you a fair chance, but be careful.” That sends a signal that they better toe the line and refrain from any bad behavior.