Be On Guard When Providing References
02/26/07
The Case
Jim, a manager, stopped by the office of his boss Juanita. “I think we have a problem, and I caused it,” said Jim. “A former employee of mine is looking for another job and the HR person at the company called me for a reference. This guy was a really lousy employee—bad attitude, showed up late, got into arguments, did poor quality work, and behaved like the world owed him a living. I fired him after six months.” Juanita nodded, encouraging Jim to continue.
“I’ve always felt an honest reference can be really valuable, so that’s what I gave the HR person. Naturally the guy didn’t get the job and somehow found out what I’d said. He just sent me an e-mail that said I was a jerk, that I defamed him, and that he was meeting with a lawyer this afternoon. He’s probably bluffing, but I figured I’d better tell you about it.”
“Why did he use you as a reference?” Juanita asked.
“He didn’t,” said Jim. “The HR person did a smart thing and called up all his bosses from the last four jobs. She said she had a release from him that allowed her to.”
“Wow,” said Juanita. “Philosophically, I agree that an honest reference is good to give—and get. But I think you might have been asking for trouble. Let’s see what our lawyer says.”
The Analysis
This company could have avoided a big headache by having a definitive policy on providing references. I advise employers to adopt a policy stating that references on former employees can be given out only by the human resources department. Managers and supervisors should be advised that they are not authorized to give out references for the simple reason that well-intentioned efforts (like Jim’s) can land their company in hot water. You can control information better when all references must be referred to one central source.
Ask for Proof
Employers can feel safe confirming prior employment, dates of employment, title, and even salary information. But before you give more information than this, particularly if it’s a subjective opinion such as an appraisal of the employee’s performance or work ethic, ask for a copy of a release signed by the employee.
In this case, Jim never asked for proof that a release has been given. That’s a mistake. With proof in-hand, you’ll know whether or not the request is coming from a bona fide employer. (And if you have any doubt about the identity of the caller or the legitimacy of the request, ask for the company to put it in writing and mail it to you.)
Is He Liable
Now to the toughest question about this case—has Jim said anything that could subject him or the company to liability? The answer could depend on the state where this employer is located. Roughly half of the states in the U.S. have statutes that provide employers a “qualified immunity.” This means employers have legal protection from a defamation suit when they give a reference to a prospective employer—provided the information is truthful. If the information is false, misleading, or is disclosed with “malicious intent,” the employer loses its statutory immunity in most states and can be sued. While Jim’s comments may not be false, it’s a closer call as to whether they were misleading or made with malicious intent. That’s because some were so subjective that they may be tough for the employer to defend against if sued.
In states where employers have no qualified immunity, these statements are just as problematic. Generally speaking, statements are not considered defamatory if they are truthful. Of course, what is truthful can be a matter of considerable dispute. For example, Jim’s statement that his former employee was frequently late is fairly objective and should be easy to prove if true. But Jim’s other statements—such as that the employee “acted like the world owed him a living”—are much more subjective observations and could be difficult to prove, even if Jim felt that they were truthful statements. And this is exactly why it’s so risky for employers to give references: If you are going to say something negative, you need to be able to prove it is true to avoid a defamation claim.
In Short
In summary, here are my guidelines on giving references:
1) Have and enforce a policy that references can be given only by the HR department (or the person in charge of HR).
2) Callers who contact HR seeking a reference should be given just the basic information on former employees, e.g., dates of employment and jobs held. If the person requesting the information wants to know more, ask him or her to put the request in writing. If the applicant has provided an information release to the prospective employer, ask for a copy.
3) If you provide information that exceeds routine inquiries, be careful in wording responses, particularly where the response is likely to be viewed as unfavorable to the employee. Stick to the most objective information possible—and ask yourself how you would prove the statement’s accuracy if necessary. Be careful about expressing opinions rather than facts. If you’re concerned about what to say or how to say it, it’s probably a good time to pick up the phone and call an employment law attorney for some quick advice.