Hiring is an unavoidable responsibility of an employer. Written applications, resumes, interviews, background checks - which were discussed in last month’s column Hiring Part I: Background Checks – and contacting an applicant’s references can generate information that will help evaluate an applicant’s qualifications and assist you in picking the best candidate. It is in a prospective employer’s best interest that such information is freely and candidly available. However, is it in the former employer’s best interest to readily disclose it?
| Dos and Don’ts of Providing References |
Dos |
Employers who are asked to provide information on a former or current employee may find themselves in a veritable catch-22.
If former employers disclose negative information to the prospective employer, they may expose themselves to a lawsuit from the employee for defamation or invasion of privacy. On the other hand, a former employer who fails to provide full information about an employee may be sued by a subsequent employer or third party for fraud or negligent misrepresentation.
Fortunately, in response to this predicament, the vast majority of states have passed legislation granting businesses employment reference immunity. Although the scope of the immunity differs from state to state, there are some commonalities. The remainder of this article will discuss the potential lawsuits related to providing a reference, the general characteristics of the immunity statutes, and some dos and don’ts when it comes to serving as a reference.
Potential Lawsuits
From the Former Employee
Defamation – Defamation is an oral or written statement that damages the reputation and social or professional standing of a person. In the reference context, there is a risk of defamation any time a former employer provides unfavorable information about an employee to a prospective employer. What’s the best defense to a defamation claim? The truth! Recently, a
From a Third Party
Negligent or Fraudulent Misrepresentation – Misrepresentation occurs when someone makes a false or misleading statement, or a “half-truth” with the intent that the listener rely on the statement. Misrepresentations can be fraudulent, for example where the speaker knows the statement is false and intends to deceive the listener. They can also be negligent, where the speaker makes a statement with no basis of knowing if the statement is true.
The Supreme Court of California allowed such a claim when a school district provided a positive reference for a former vice principal, despite the former employer’s knowledge that the vice principal had previously been accused of sexual wrongdoing toward minor students. “The writer of a letter of recommendations,” the Court wrote, “owes to third persons a duty not to misrepresent the facts in describing the qualifications and character of a former employee, if making these representations would present a substantial, foreseeable risk of physical injury to third persons.” Although the letter ignored the allegations altogether and instead focused on positive aspects of the vice principal’s tenure, the court held that the school district was nonetheless liable for sending a letter containing “misleading half truths” about the vice principal’s character.
Note that you generally do not have a legal duty to provide a letter of reference for an employee if you don’t wish to do so. On the other hand, if employees complain about discrimination and you refuse to provide them with a letter, a court may view the failure to provide the letter as unlawful retaliation. Tread carefully in this circumstance.
Immunity Statutes
Although these statutes can vary widely, most share some general characteristics. First, most do not require a business to provide references. Second, the majority presume that an employer will provide a reference in good faith. Finally, most statutes require a plaintiff to overcome the presumption of good faith by proving that the employer knew the information was false and acted recklessly in regards to the truth.