Issue: Court ruling makes it easier to win defamation suits stemming from poor job references.
Risk: Thousands of dollars in defamation claims.
Action: Limit the number of people authorized to supply references.
Here's one more reason to tighten the reins on managers' giving references for former employees:
Recent case: A truck driver's former manager told an employer that the driver performed "way below average," "needed to improve his work ethic and attitude," displayed a "very negative attitude" and that his paperwork "needed help like you wouldn't believe." The manager also said he would never hire the driver again. The trucker'srecord did not match the manager's downbeat reference.
But based on the former manager's comments, the trucker's new employer fired him. He sued the former employer, alleging defamation, and won $33,000 in compensatory damages and $250,000 in punitive damages from the company.
The court said it wasn't necessary to prove that the trucker's former manager knowingly made false or malicious statements about him, only that he made statements solely from "ill will, bad in-tent, envy, spite, hatred, revenge or other bad motives." (Gibson v. Overnite Trans-portation Co., No. 02-3158, Wis.Ct. of Appeals, 2003)
Your best bet: Limit the number of people authorized to supply references. Provide your reference-givers with a carefully crafted outline that explains the topics they can, and cannot, discuss during reference checks.
Also, require new employees to sign a consent-and-release form that gives your organization the right to respond truthfully to potential employers' inquiries and waives any legal claims that may arise from giving references, such as defamation or slander claims.
Free e-visory report: Sample employment-reference release form
It's smart to require employees to sign a waiver releasing your organization from liability for providing truthful references. You can find a sample one-page form that you can personalize for your organization at www.hrspecialist.net/extra.