One of the quickest ways to get into reference trouble is to agree to provide information on a former employee and then offer up incorrect or misleading statements.
If you stick with the basic facts, your reference policy is unlikely to get you into legal trouble. But watch out! Giving a favorable reference on a former employee who performed (or behaved) poorly can be extremely risky.
If you must provide information, stick with easily verifiable facts such as dates of employment and positions held. That’s true even if the former employee provides a release authorizing you to give a more detailed reference. The release may protect you from defamatory remarks should the employee sue, but it won’t protect you from misleading statements that a third party relies on.
Recent case: Dr. Robert Berry lost his job as an anesthesiologist when shareholders of his practice terminated him for working while impaired by prescription drugs.
Berry left the state and applied for another job as an anesthesiologist. As part of the application, he had to provide references. The hospital where he had worked before the practice terminated him provided a simple reference stating, “Our records indicate that Dr. Robert L. Berry was on the Active Medical Staff … in the field of Anesthesiology from March 04, 1997 through September 04, 2001.”
Several members of the former practice were more generous, explaining that Berry was “an excellent physician” who would be an asset to any medical practice and that he came “highly recommended.” Neither the hospital nor the individual doctors from the practice revealed Berry’s prescription drug problem. Berry got the job he applied for.
Then, a patient for whom Berry provided anesthesia ended up in a vegetative state as a result of alleged malpractice. The patient sued, and Berry and his insurance carrier settled for $7 million. The insurer then sued the former hospital and Berry’s former medical practice, alleging that they provided false and misleading information that led to Berry’s hiring. A jury awarded $8.24 million.
The hospital and practice appealed. The 5th Circuit Court of Appeals began its decision by stating that when they chose to write referral letters, the hospital and former colleagues “assumed a duty not to make affirmative misrepresentations.” The court concluded that the doctors did, in fact, make misleading statements, while the hospital did not.
The medical practice is now on the hook for the full jury award. (Kadlec Medical Center v. Lakeview Medical Center, No. 06-30745, 5th Cir., 2008)
Final note: One of the worst things you can do is to provide a glowing reference for someone whom you would not rehire. The consequences may be devastating—and not just in medical cases. Consider, for example, providing a reference for a known sexual harasser who hasn’t mended his or her ways. The tab can easily hit millions.
Before providing a reference for a former employee who left under negative circumstances (e.g., was fired, wasn’t performing up to par, etc.) check with your attorney. In most cases, providing just the bare facts will be best.
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