Despite all the risks, providing other employers with references about your former employees is a good business practice. If you refuse to provide references, eventually you would compromise your ability to find out about applicants you’re considering hiring.
In addition, you can be sued for refusing to give a potential employer information on a former employee’s dangerous or illegal conduct.
As long as the information you provide is objective and well documented, the courts should side with you in the event a former employee files a defamation suit. Give serious consideration to a policy that limits references to basic employment information, such as dates of employment, job duties and salary history.
Another defense: The statements made in the reference are protected by a “qualified privilege”: that is, a libel charge will not stand up in court if the comments were made without malice or deliberate ill-will and were given only to those with a vested business interest.
To cite one example from Minnesota, on the basis of an unsatisfactory reference from a former co-worker, a woman was rejected for a position as a state-county intergovernmental coordinator. The woman contacted her former co-worker and asked him what he’d said. The man replied that he had told the prospective employer that she lacked “warmth, sincerity and integrity.”
In ruling against the woman, the court stated, “The public interest is best served by encouraging accurate assessments of an employee’s performance.” The co-worker’s honest assessment of the woman’s performance was protected by a qualified privilege. Note: Not all states recognize the concept of qualified privilege.
Twenty-nine states have enacted laws protecting employers that provide bad references without malicious intent. But many of those laws don’t provide much protection.
For example, under Texas law, employer’s immunity is limited to (1) written statements; (2) regarding the reason for discharge; and (3) in an action for libel. As the Texas example illustrates, the immunity may not cover all potential claims. Employers thus remain potentially liable for retaliation under Title VII because the Texas statute protects only against libel claims. (Be sure to check the language of your statute to determine the extent of protection provided.)
Bottom line: Don’t let the existence of a reference immunity statute in your state lull you into thinking that you can now speak freely about current and former employees. Rely on the statute only in cases of emergency: that is, when you know that the individual in question may be dangerous.
To make it easier to defend your company against libel charges brought by ex-workers, follow these guidelines:
- When you fire an employee, record all facts that led to the termination, ensuring that the information is accurate.
- Restrict information about the circumstances leading to a termination or resignation only to those in the company with a need to know.
- When you discuss the firing with other employees, avoid making derogatory comments about the individual.
- Don’t make examples of fired workers.
Caution: The Supreme Court has ruled that former employees, as well as current ones, are protected under the anti-retaliatory provisions of Title VII. Robinson v. Shell Oil Co., 519 U.S. 337 (1997) In the Robinson case, a discharged employee filed a complaint with the EEOC against his ex-employer. Meanwhile, he applied for a job elsewhere. The potential employer called the company for a reference check. The plaintiff alleged that the company gave him a negative reference in retaliation for filing the discrimination complaint. The Supreme Court ruled that former employees are still protected by Title VII even though technically they’re not employees anymore.
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