Electronic trouble: Subscription-based hiring software carries defamation risk — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Electronic trouble: Subscription-based hiring software carries defamation risk

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in Hiring,Human Resources

Do you use software for hiring employees that shares candidates’ basic information with other employer-subscribers? If that software also allows you to mark candidates or former employees as not eligible for hire, be aware that doing so may subject you to defamation claims. That’s what one major bank just learned.

Recent case: Mishka was terminated from her job at Bank of America. She later applied for jobs with several other employers, including Lowe’s, J.P. Morgan Chase and TD Bank, but was not hired. It was then that she figured out that the hiring software the potential employers had in common included information about applicants from other software subscribers and that Bank of America had marked her as a “no-hire” for “risk management” reasons.

Mishka also confessed to another potential employer after what she believed was a successful interview that her former employer had her on a no-hire list after the interviewer asked. She didn’t get that job either.

She sued, alleging defamation and requested a permanent injunction. She claimed to have been wrongly discharged and that there was no reason for the “risk” and “no-hire” notations in the software or in her employment file.

The court said her case could proceed. If she can prove the notations are false, she may win an injunction and damages. Even if she loses, her former employer will have spent thousands on litigation. (Pusey v. Bank of America, No. 14-CV-04979, ED NY, 2015)

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