Many states provide some immunity for employers who furnish truthful, fact-based employment references. But, as the following case shows, that immunity can evaporate if you provide false information or make malicious comments during your references.
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 discuss during references.
Finally, require employees (when hired) 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.
Recent case: A truck driver's former manager told an employer that the driver was "way below average," "needed to improve his work ethic and attitude," had 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 didn't match the manager's downbeat reference.
Based on those 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.
The court said it wasn't necessary to prove that his former manager knowingly made false or malicious statements about him, only that he made statements solely from "ill will, bad intent, envy, spite, hatred, revenge or other bad motives." (Gibson v. Overnite Transportation Co., No. 02-3158, Wis.Ct. of Appeals, 2003)