Employment references: Name, rank, serial number… is that all there is?


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by Natalie Wyatt-Brown, Esq.

As the person responsible for compliance, you may be asked for an employment reference, usually for a former employee. Although you probably have strong opinions about this employee, whether positive or negative, you know that you are only supposed to give out confirmation of dates of employment and, sometimes, last title held. But is that really all you can say? What about when the shoe is on the other foot? It would be nice to get more than just “name, rank, serial number” from a former employer when filling a position.

Is that all there is?
Most employers have resorted to the “name, rank, serial number” reference policy due to a fear of litigation. The primary concern is that an employer could be sued for defamation for giving a negative reference. Defamation is a false statement, tending to harm the reputation of the person in the community, which is published to a third party. Several defenses to a defamation claim may be used, however. A true statement, no matter how negative, cannot be defamatory as a matter of law. Similarly, a statement that is not as positive as the employee believes he or she deserves, but it not negative, is not defamatory.

Further, a statement made for a proper purpose and upon a proper occasion is not actionable, unless the plaintiff can prove it was made with malice. This is referred to as the “qualified privilege,” and it generally applies to employment references. Further, to be defamatory, the statement must be factual in nature; statements of opinion are not defamatory, because they cannot be proven true or false. What constitutes truth, opinion, and malice, however, are often questions of fact for a jury to decide, which makes defending such actions risky and expensive.

So, I’m just going to give positive references from now on. In addition to a possible defamation claim based on a negative reference, employers also face a risk of suit based on a positive one. Employers who choose to give a reference may be liable for misrepresentation, if they provide incomplete or misleading information regarding a former employee.

What if I give neutral references for bad employees and positive references for good employees? By treating different employees differently, employers run the risk of a discrimination or retaliation claim. An employee who receives either no reference or a limited reference, while other employees received more complete or informative references, may argue that the limited reference constitutes unfair treatment by the employer.

My state has a job reference immunity law. Doesn’t that mean I am protected if I give a reference? 

Currently, 37 states have passed laws that exempt employment references from defamation claims, in a clear effort to reduce these concerns and allow employers to provide more complete information. Typically, these statutes create a rebuttable presumption that an employer who provides a job reference acts in good faith. Some statutes accomplish a similar goal by conditioning the immunity on good faith without expressly offering a presumption of good faith. Under either formulation, plaintiffs cannot prevail in a defamation claim without proving that the reference provider did not act in good faith.

These statutes usually echo the language of common law defamation standards for abuse of the qualified privilege by providing that defendants forfeit the immunity when they knowingly provide false information, or act with reckless disregard for truth or falsity. A few states venture further, permitting plaintiffs to prove bad faith by demonstrating that the employer’s reference violated nondiscrimination or civil rights laws, confidentiality, or other agreements.

The difficulty with most of these laws is the uncertainty surrounding what constitutes “good faith,” which is often not defined, or is only defined in a vague or circular fashion. As a result, they often do not provide much further protection than the common law qualified privilege for defamation claims. An employer may abuse the privilege by knowingly providing false information, by acting in reckless disregard for the truth or falsity of the information, by communicating the statements to persons who are not within the purpose of the privilege, or by excessive publication.

Maine’s Employment Reference Immunity law is a good example of the above. That statute provides: An employer who discloses information about a former employee’s job performance or work record to a prospective employer is presumed to be acting in good faith and, unless lack of good faith is shown by clear and convincing evidence, is immune from civil liability for such disclosure or its consequences. Clear and convincing evidence of lack of good faith means evidence that clearly shows the knowing disclosure, with malicious intent, of false or deliberately misleading information. This section is supplemental to and not in derogation of any claims available to the former employee that exist under state law and any protections that are already afforded employers under state law.

Therefore, a Maine employer is immune from all civil liability for providing an employment reference absent “clear and convincing” evidence that the employer knew the information was false or misleading.

From Maine to California, Florida to Washington, and everywhere in between, most employers still refuse to provide detailed information regarding former employees. It is clear, therefore, that these statutes have not had their intended effect.

Do all states require “good faith”?
In an effort to get around the concerns described above, Minnesota passed a unique statute on the subject. It is so different, in fact, that many articles and comments do not include it as one of the nation’s job reference immunity laws. Unlike most states, Minnesota does not require the reference to be made in “good faith,” but instead it depends on a complex series of very specific requirements before job reference immunity is conferred.

Subdivision 1 provides that an employee can ask an employer to remove disputed information from his or her personnel file. If the employer refuses, the employee may ask to submit a written position statement (not more than five pages long) that must be placed in the employee’s personnel file.

Subdivision 2 of the statute provides that an employer is immune from a defamation claim for communicating information contained in an employee’s personnel record, but only after the employee has reviewed his or her file. If the employee makes a request under Subdivision 1 and the employer agrees to remove or revise the disputed information or the employee submits a position statement, the employer is required to provide both the disputed information and the written position statement, or to follow its agreement with the employee to remove or revise it.

Therefore, if a Minnesota employer provides an employment reference to a prospective employer based on information contained in the former employee’s personnel file, and the employee has reviewed and not disputed that information, the employer is totally immune from a suit for defamation without the messy fact issue of whether the employer acted in good faith. The problem is that most employees don’t review their personnel files, even though they have the legal right to do so in Minnesota, which means the immunity almost never comes into play. Therefore, most Minnesota employers, like their colleagues across the nation, still follow the “name, rank, serial number” reference policy.

So why even bother getting references, if no one will say anything useful? Even though most employers, even ones protected by reference immunity statutes, do not provide detailed references, there are reasons to continue to seek them.

First, employers should check references if only to confirm what applicants tell them. In one case, an employer did not bother to check references in the mistaken belief that he would not learn anything. After the employee had filed a fraudulent workers compensation claim and then a baseless charge of discrimination, a simple Internet search revealed that one of the prior employers listed on his job application did not even exist. Had the employer verified his prior employment, he would not have hired him, thus avoiding thousands of dollars in legal fees and other costs.

Getting around “Don’t ask, don’t tell”

Despite reluctance on the part of employers to give detailed references, there are ways for employers to gather useful information about prospective hires. The following is a list of tips and strategies to verify information, protect the company, and avoid liability:

1. Ask applicants to explain specific periods of unemployment or gaps in their history, either on the application or during the interview.
2. Ask for all prior names used by the applicant.
3. Make clear to applicants in the interview that you will check their references.
4. During the interview, obtain names of several job-related references not listed on the application, and then contact those individuals.
5. Have applicants make necessary arrangements for you to talk with references you choose. This puts the burden on applicants to ensure that these references are obtained.
6. Ask applicants to name former supervisors who should not be contacted for a reference and explain why.
7. Ask applicants to provide copies of past performance reviews.
8. Follow up on written references presented by the candidate.
9. Consider using a qualified outside firm to check references, especially for sensitive and upper-level positions.
10. Verify degrees and licenses listed on the application or resume.
11. Check references by phone or in person. The response rate to written requests is lower.
12. Check more than one reference.
13. Don’t limit your reference contacts to those provided by the applicant.
14. If any employees in your organization are familiar with the applicant, ask for their opinions.
15. Develop a broad network of contacts to open up informal sources of reference checking.
16. Document every reference contacted, even if the individual contacted refused to provide reference information.
17. Try to avoid contacting the Human Resource department for references, unless there are no other contacts from the organization.
18. When making telephone reference checks, start with simple questions first.
19. Ask open-ended questions about employment history, job performance, and potential problems.
20. Never ask questions relating to age, race, sex, religion, national origin, marital status, disability, or any other protected status.
21. As appropriate for particular positions, check a prospective employee’s criminal history, driving record, credit history, and Social Security number.
22. Evaluate negative references fairly. A negative response from one individual does not necessarily mean the candidate is unqualified or difficult to work with.
23. Keep reference documentation confidential.
24. Retain reference records for at least the minimum period required by law.

With these rules in mind, you should be able to gather useful information while at the same time avoiding liability.

Natalie Wyatt-Brown is a shareholder of Halleland Habicht and is the head of its Employment Department. Ms. Brown may be contacted by email at nwyatt-brown@hallelandhabicht.com


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