When employees leave your company, whether they resigned or were terminated, you can expect prospective employers to contact you at some point for information about them. Your risk in providing references is that former employees may sue you if your references are unfavorable and lead to job rejection. Awards in successful defamation suits may include damages for lost earnings, mental anguish, or pain and suffering, and potentially punitive damages. You are protected if you disclose information to a prospective employer that you believe is true. But you may lose this protection if the information is not limited in scope to the inquiry being made, is disclosed at an improper time or in an improper manner.
On the flip side, you can also get in trouble for NOT providing certain information when called for a reference. If you know that a former employee has a history of criminal violence or extremely aggressive behavior and you do not disclose that information to a prospective employer, you run the risk of being sued for failing to disclose the information if that employee were to harm someone at the new job. Consult with an attorney in this situation to determine what, if anything, you may be obligated to disclose.
Your best policy may be the “name, job title and dates employed” approach, where you provide only limited information. However, the bottom line is that the decision is yours as to what information, if any, you will provide in response to reference requests. Whatever you decide, make sure you have a clear company policy about what information will be provided and the people in your organization who are authorized to respond to reference requests.
Do’s and Don’ts of Reference Checks
DO
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Be truthful. Provide facts, opinions and conclusions that you can back up and substantiate, rather than statements based on allegations, speculation or gossip.
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Be clear. If you decide to disclose the reason for termination, state the reasons in objective and specific terms. Use of termination reasons such as “insubordination”, “unsatisfactory performance”, or “for cause” could be considered defamatory by implication.
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Watch your tone. Discuss the facts in an objective manner, not in a petty, vindictive or accusatory way.
Just the facts. Stick to information that is relevant to the employee’s performance or behavior in the workplace. Comments about an employee’s personal life may raise invasion of privacy issues. -
Be selective. Only disclose employee information to those persons who have a legitimate business interest in that information. The same information provided to spouses, friends or other employees, who have no business need for the information, may be considered defamatory.
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Verify callers. If you’re providing a reference by phone, provide the information in a return call so you can verify who the caller is. Or require that the reference request be submitted in writing.
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Get consent. Your best protection against claims that may arise from giving employment references is to get former employees to provide a written consent for you to release their information.
DON’T
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Make accusations. Accusing an employee of engaging in illegal or improper conduct will most certainly lead to a defamation lawsuit. If you fired an employee because you suspected the employee of engaging in illegal or improper conduct and you feel compelled to share this, then restrict your statement to your suspicion, but only if you can support your suspicion with objective evidence.
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Exaggerate. Exaggerating an employee’s misconduct can also get you into trouble. Using the term “gross insubordination” as the reason for termination when the employee’s alleged misconduct was using the copier to make flyers for his church’s bake sale would be considered defamatory.
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Make untrue statements. If you know your statements are untrue or if you make no effort to determine if they are untrue, then your statements are not made in good faith. Making statements based on rumors without personal observation is one such example.
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Make statements to improper parties. Statements may only be made to persons having a legitimate business interest in the information disclosed, such as a potential employer. Sharing your suspicions with other employees and friends who have no business reason for knowing the details of why the person was fired, may be considered defamatory.
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Volunteer information. Limit the information you provide to what is requested. Don’t feel compelled to provide all requested information, because generally you’re under no legal obligation to provide employment references at all. Don’t volunteer any information that is not requested, favorable or unfavorable.
