03/ 30/ 2005
by Beth Gaudio
Debunking myths about HR references
At some point as a small-business owner, you will undoubtedly receive reference requests about current or former employees. In providing information, it’s important to recognize potential liability risks. Employers who provide references may find themselves being sued for defamation or negligent referral. But that doesn’t mean you can’t be straightforward. Below, MyBUSINESS clears up some confusion about references.
Myth: The only information an employer can legally disclose is an employee’s name, job title, wage rate and dates of employment.
Truth: In most states the law does not prohibit a supervisor from speaking to a prospective employer about an employee’s performance or skills based on the supervisor’s direct experience or personal observation.
Myth: Employers who say anything negative about a former employee can be sued for defamation and will probably lose.
Truth: Truth is an absolute defense to defamation. Employers who have the documentation to back up their statements should win in a defamation suit. However, it is important to keep in mind that there is no such thing as making comments “off the record.” Your best protection against reference-related lawsuits is to obtain in advance the employee’s permission to disclose employment
information.
Myth: Employers can avoid potential lawsuits by simply giving all former employees positive references.
Truth: Many states have recognized that employers have some duty to prospective employers and allow for negligent referral claims. By limiting references to factual information supported by documentation, employers have a good argument that they are not misrepresenting any relevant information.
Myth: If a former employer won’t disclose any information, it isn’t worth a potential employer’s time to check an applicant’s references.
Truth: An employer should at least attempt to obtain references to protect against lawsuits for negligent hiring. An employer can request that the applicant sign a release so that the references are comfortable responding to information requests. If nothing else works, a potential employer can at least ask the former employer if the applicant is eligible for rehire, which most employers are comfortable with answering. That answer alone can give you insight into whether you should hire an applicant or not.
*Beth Gaudio is a staff attorney with the NFIB Legal Foundation. This article is intended to provide general information for reference only and should not be considered legal advice.
