I received a call from a very irritated client who just hired a new book keeper only to find out the new hire had just been arrested for embezzling from the same prior employer who gave her a glowing reference. Ethics aside, what are the legal parameters for giving a reference?
Frankly, misleading references involve a developing area of the law that is based on negligence theories. To be liable for negligence, you must owe a duty to someone, breach that duty, and the breach must cause damage. The best way to avoid being sued for a reference is not to give one.
No state imposes a duty on an employer to provide a reference on behalf of an employee. However, if a business chooses to provide a reference, it must do so uniformly and may be liable to the employee, other businesses or third parties if the reference is negligent. Negligent references are either inaccurate, materially incomplete, or both.
Pennsylvania law gives employers some protection in lawsuits by employees; provided, the employer acts in "good faith" when it discloses information. Lack of good faith must be established by clear and convincing evidence that the employer disclosed information:
- Knowing it was false or should have known it was false
- Knowing it was materially misleading
- With reckless disregard of the truth or falsity.
- In violation of some other contract or legal right of the employee.
However, the employer’s "opinions" about the quality of work are not generally considered to be slanderous or libelous, unless the opinion implies undisclosed defamatory facts as the basis for the opinion. For example, stating that someone is dishonest is an "opinion" which implies undisclosed and potentially defamatory facts. Stating that someone did "poor quality work" does not.
Many businesses have a strong moral compass and want to give references. It helps good employees move on and keeps the poor employees from becoming someone else’s problem. I admire this approach. Susan Heathfield at About.com has a good post on How to Respond to a Reference Check Request. If you decide to give a reference, her are some additional tips:
- Follow your company policy on giving references.
- Remember that, if your policy is to give a reference, refusal to give or providing a false negative reference to someone who is suing you for discrimination is a form of retaliation under discrimination laws.
- All references should be given by HR based on uniform and factually accurate information. Allowing supervisors to give references is dangerous.
- Consider requiring a written authorization and waiver from former employees and applicants as part of your reference protocol. This added legal protection is worth it and it can be obtained as part of an exit interview or the application process.
- Consider "verifying" facts provided by the prospective employer, rather than providing the information yourself.
- Don’t feel compelled to use the reference forms provided by a prospective employer if they seek information your company doesn’t provided.
- Never give references that contradict facts you have provided in other forums, like worker’s compensation or unemployment compensation.
- Consider providing or verifying the following summary information in a reference like:
- Dates of Employment
- Job Title
- Job Duties
- Final Compensation Level
- If you adopt the summary information policy, tell prospective employers that it is your company’s policy to provide only this information. Don’t leave them with the impression that you are hiding something.
- Avoid answering certain questions like "would you rehire?" and "reason for leaving?", unless you are prepared to explain both.
If you asked to provide a reference for someone who is terminated for misconduct, either follow your policy or provide no reference at all. Don’t give a false reference; particularly, if the misconduct leading to termination involved violent behavior. If the former employee commits acts of violence against a subsequent employer you won’t be able to live with yourself and you may have legal responsibility for the misleading reference. There are cases in which an employer was not liable for a summary reference response consistent with its policy in the case of subsequent employee violence, even when it was argued that once the employer decided to give a reference it had a duty to give a complete one.
On the lighter side, my favorite ambiguous reference is " You would be lucky to get this person to work for you."