Legal issues surrounding references.(legal)

AS AN EMPLOYER, YOU may have attempted to check a prospective employee's references in order to make a more informed decision. (1) Or, you may have received a request from a another company for information regarding a former employee. Did you know that both the employer giving the reference, and the employer receiving the reference, face potential legal exposure?

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Employers must avoid committing "negligent hiring." This means that the employer has a duty to protect the company, its shareholders, employees and customers from injury that the employer knew, or should have known about. This is one reason why employers attempt to check references. However, because employers giving references also face potential legal liability, they may be unwilling to give references, other than to confirm dates of employment and position. Usually, this refusal stems from an attempt to avoid litigation arising from a negative or a positive statement (defamation, libel, slander, discrimination, retaliation).

Consider the following: an employer interviewing a prospective candidate for a position of trust within the company calls the references listed on the candidate's resume. The candidate's former employer gives a glowing reference, but omits known facts involving the candidate's past acts of violence because the former employee wants the employee to have a "clean" slate. However, once in the new position, the employee harms fellow employees. The new employer finds out that the former employer had direct knowledge of the employee's violent tendencies, yet said nothing. The new employer sues.

Or, another example: an employee interviewing for a position with a competitor lists his former supervisor as a reference. The supervisor is upset that the former employee is going to work for its competitor. When the interviewing employer calls the supervisor to discuss the employee's work performance, the former supervisor stretches the truth to put the employee in a bad light and ends up slandering the employee. The employee does not get the job and sues his former employer for defamation.

For most employers, the benefits of providing references do not outweigh the risks. While the inquiring employer receives the benefit of any information provided, the former employer does not usually receive a corresponding benefit in exchange for the legal exposure resulting from providing the reference. But because this information can be helpful to the overall hiring process, and because an employer has a duty to avoid negligent hiring, over 30 states have enacted laws which offer protection to employers who give references in good faith. However, some states require that for protection to apply, the reference given must involve only truthful facts about job performance.

If you do decide to provide a reference, keep in mind the following, which can help reduce your legal liability. First, keep your comments related to the job, ensure that they are documented and were personally observed. Do not relay hearsay or the opinions of others. Second, if your comment would be illegal under any federal or state discrimination laws for the workplace, it is equally illegal when giving a reference. For example, if you have personal knowledge of the employee's sexual orientation, you should not share that with the prospective employer.

Third, if you don't remember the employee, were not in a position to observe his/her performance, or can't remember anything about the employee's performance, you should carefully refuse to serve as a reference. It is better to not say anything at all, rather than to give a glowing reference that is not based in fact. Fourth, don't make any negative comments unless they relate to job performance. If you do make negative comments, they should have already been communicated to the former employee through performance evaluations, etc.

Fifth, for your protection, take notes during the conversation, noting the name and position of the person calling, the questions asked and the responses provided. Sixth, communicate your policy of providing references, whatever it may be, to your employees so that they are not surprised when they leave your employ and attempt to secure a reference.

About the Author: Heidi Abegg is an associate at Webster, Chamberlain & Bean--a Washington, DC-based law firm. She can be reached at habegg@wc-b.com.

(1). The information provided herein is for general informational purposes only and is not intended to constitute legal advice.

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