Could a negative reference be considered libel?
Q. We fired an employee because she was chronically late, frequently missed work and had a poor working relationship with her colleagues. If we provide negative job references to prospective employers, could we be sued for libel?
A. An employee can sue his or her former employer for defamation and libel based on a negative job reference provided to prospective employers.
However, Pennsylvania law provides immunity to an employer that provides information about the job performance of a current or former employee to a prospective employer, based on the presumption that the employer was acting in good faith.
The former or current employee can rebut this presumption of good faith with clear and convincing evidence that the employer:
- Knew, or should have known, that the disclosed information was false
- Knew the information was “materially misleading”
- Knew the information was false and was disclosed with reckless disregard for the truth or falsity of the information
- Disclosed information and the disclosure of that information was prohibited by contract or law. (42 Pa.C.S. § 8340.1)
Even though Pennsylvania law protects employers that provide truthful negative references, tread carefully in providing reference information. Despite the law, an employee may still bring an action for defamation or libel. To minimize this risk, many employers decide to provide neutral references confirming only the employee’s title, date of hire and salary.