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Handle Employee References With Care

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Imagine that an employee comes into your office, announces she’s looking for a new job and asks for a letter of reference.

She’s not a top performer and you don’t mind seeing her go. You’re also afraid that if you don’t provide a positive reference, she’ll claim defamation or discrimination. So, to help expedite her exit, you give her a glowing recommendation that embellishes her skills and abilities.

She turns out to be a legitimately harmful hire for her new company. Now they are seeking to hold you accountable. You regret ever providing a reference. Even if the other company doesn’t prevail in court, you still had to deal with time-consuming and expensive litigation.

This scenario illustrates the perils of recommendations. It demonstrations why it is best to talk to an employment lawyer who can review your policies and practices surrounding job references. An experienced attorney can help you figure out where you might be vulnerable.

The Consequences of a Negative Reference

Providing a negative reference to a prospective employer can potentially leave you vulnerable. The employee may bring a defamation claim if they do not get the job in question.

Defamation cases can be difficult for an employee to win. The employee needs to show:

  • The employer made a false statement of fact about the employee
  • The employer did so in bad faith
  • The employee suffered actual harm.

That’s a high bar to clear — but it’s not one you want to have to test.

Some states do protect employers from liability for untrue or defamatory statements in the context of giving job references. However, there’s no protection if the statement was made maliciously.

The Risks of a Positive Reference

Employers can also potentially get in trouble for providing positive references that aren’t really true.

Imagine you give a positive reference but knowingly leaving out negative details about the employee. Later, the employee commits a crime or hurts someone at their new job. It is possible you could be held responsible, depending on the circumstances.

Even if an employee merely performs substandard at their new job, if this looks at odds with your reference letter, their new company could demand accountability.

Limiting Risk in Employee References

So what can you do to limit your exposure to risk?

First, consider adopting a policy of not providing substantive references at all. Instead, you opt to simply verify employees’ titles, dates of employment and salaries without giving a positive or negative evaluation.

But if you do this, it is crucial that you do this for all employees. If you selectively give positive references for certain workers and “no comment” references for others, you run the risk of facing a discrimination claim.

Second, if you feel you need to give an honest appraisal to prospective employers, make sure any factual statements are completely truthful. You may also simply stick with opinion.

But even if you’re only offering an opinion, you need to make sure nothing you are saying can be connected the employee’s race, religion, gender or any other category. Such statements could open you up to a discrimination suit.

The best practice of all is to work with an employment attorney to develop a consistent policy on references. Then, train all your managers and supervisors on how to follow it.