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Job References: Problems for Good References, Problems for Bad References

As the economy worsens, employers are facing an increasing number of lawsuits over employee references.  Whether the employer gives a good reference or a bad reference, there is an increase in lawsuits being filed against the employer.

In Georgia, a lawsuit is pending against a school district for giving a positive reference to a teacher who had been convicted of a sex crime and went on to teach in a district where he was later charged with raping a student.  In New Jersey a man is suing Best Buy Company, Inc. alleging that a human resources manager wrote a defamatory email about him to a prospective employer, thus costing him the job. 

Many employers believe that the potential liability in the employment arena ends when an employee terminates his or her employment with the company.  This clearly is not the case.  In fact, if an employee does not get a job, that employee will often times draw the conclusion that a negative reference was given by the former employer. 

As a result, many companies have adopted policies that specifically state to new hires that they will not give them any kind of reference when they leave.  Some employers will only give dates of employment, nothing else.  However, limiting reference information can also lead to trouble. Several lawsuits are currently pending against employers who said nothing when asked for an employee reference.  This creates a problem in that many employees do have issues that should be disclosed to the prospective employer.  For instance, does this employee have dangerous propensities?  Has this employee been charged with employment-related discrimination issues?  How this employee been dishonest?  If an employer hides behind a neutral-reference policy, that policy may reward the bad employee, and open the former employer up to liability.

Although many states have qualified immunity laws that allow employers to speak about employees’ job performance, the condition is that the statements must be made without malice.  Many plaintiffs will argue that there was malice, which will allow the employee to potentially move forward through the Court system.  Although there is no perfect answer for the employer, the typical rule of thumb is only to give “name, rank and serial number.”  By limiting the information given to dates of hire, salary and position, an objective reference is given, which should protect the employer as much as reasonably possible.  Although this may not completely protect the former employer from a potential lawsuit, it probably is the best and most protective policy to utilize.

Full post as published by New Jersey Law Blog on March 31, 2008 (boomark / email).