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Ring Ring or Ding Ding? Know the Legal Way to Answer Reference Calls

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in Case In Point,Employment Law,Human Resources

We’ve all picked up the phone and been asked to give a reference about a former employee. For some, you’re glad they are out of your hair and it’s too late for them to sue you. So you’re honest about the person. But be careful. As a new case shows, it may never be too late for an ex-employee to take you to court …


Case in Point: Bernadine Matthews worked for Wisconsin Gas for 20 years but the relationship ended badly. Matthews departed with a settlement agreement that specified how the company should respond to any future reference checks.

The settlement required the company to follow a script, “At this time the company’s policy is what you call name, rank, and serial number. We confirm people worked there, the dates of employment, and their position or at least their last position. That is what our policy is at this time. And that’s what I can agree to.”

After Matthews left, the company received three reference calls. On two occasions, supervisors initially denied Mathews ever worked there and then gave out the agreed upon information. On a third occasion, the company lawyer also added that Mathews was involved in ongoing litigation with the company.

Mathews sued Wisconsin Gas, claiming the company breached the contract and retaliated against her under the Civil Rights Act of 1964. She claims she was harmed by the company’s reference-call comments. The company denied she was affected in any way.

What happened next …and what lessons can be learned?

While a lower court agreed with the company, the appellate court reversed the ruling. It sent the case to a jury trial, noting that Matthews's prospects for a future job had been damaged by the additional comments made during the reference check. (Matthews v. Wisconsin Energy Corp., E.D. Wis., 1/20/10)

3+ Lessons Learned … Without Going to Court

1. Dust off your reference check policy. Unemployment rates are up. Everyone is looking for a job these days. Know what your organization's reference-check policy limits you and your supervisors to say -- then stick to it. No extraneous comments or you could create a lawsuit, which will give the unemployed a full-time job.

2. If you don’t have a policy, implement one. It’s too risky today not to have a reference-check policy in place to limit your organization’s risks against former employees.

3. Train everyone on it. Make sure everyone knows your company’s policy so they can comply. Reference check calls don’t always go to HR, so employees need to know where to reroute the calls and what not to say before they forward them.

4. Never breach a settlement agreement. I just had to toss this obvious one in, as it wasn’t so obvious for the company in this case.

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