If you have employees, you can expect prospective employers to be in contact with you to offer references for your past employees. Employment references are one of the most effective tools for verifying and determining whether an applicant is qualified for the position in which you are hiring.
Before responding to an employment reference request, understand that certain types of statements about former employees may form the basis for lawsuits. These employees may sue you if your references are unfavorable and lead to job rejections. The claim most likely to be asserted by former employees is that the references are false and damaging to their reputations and, therefore, defamatory. An employer may be liable to a former employee for defamation if the employer communicates to a prospective employer or other person a false statement that results in damage to the former employee’s reputation.
Employment references play an important role in hiring decisions, therefore, the law usually protects an employer who in good faith discloses information that the employer believes is true to a prospective employer. However, if the information is not limited in scope to the inquiry being made, is disclosed at an improper time, or is disclosed in an improper manner, protection against suit may be lost.
In order to protect the company against reference-related lawsuits, obtain in advance the employee’s permission to your disclosure of employment information through the use of a release form. Take into consideration placing a policy in effect providing detailed references for former employees who have signed written releases and restricted references of only basic employment data for former employees who have not signed releases. This type of flexible policy will help show that the employee had a choice in deciding whether or not to sign the release.
Even if you have obtained a written release, it is in the best interests of your company if employment references are made on the basis of true and objective facts that are relevant to a former employee’s job-performance abilities. You should never make accusations or exaggerations about a former employee. Keep it simple and to the point.
You should consult with an attorney to determine what you are obligated to disclose in the event that you know a former employee has a history of criminal violence or extremely aggressive behavior. In remaining silent you risk being sued for negligently failing to disclose the information if the former employee were to subsequently harm someone while on the job. On the other hand, if you do disclose the information and it turns out to not be true, you could be sued for defamation.
The Employers Council http://www.ecouncil.org/reference%20release.htm has a sample Employment Reference Release form that you may use as a guide.
"If the Constitution is worth anything, if the Declaration of Independence is worth anything, if the boys who died on the field of battle did not die in vain, fair employment practices are correct and necessary." ~ Dennis Chavez