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Karen McAndrew, Robert McKearin, Editors
Dinse, Knapp & McAndrew, P.C.
Vol. 13, No. 4
June 2008
BACKGROUND CHECKS
The job reference dilemma: Say nothing or tell all?
Bob McKearin
Experienced HR professionals tend to follow the military approach to job references: Give name, rank, and serial number and nothing more. For civilians, that translates into name, dates of employment, positions held, and (maybe) salary or pay grade
at the time employment ceased. Often, however, if there are good things to say about a former employee, we want to share them. The result? In keeping with the usually wise adage, "If you can't say something nice, don't say anything at all," we
provide name, rank, serial number, and positive information.
Of course, it's the bad things that present the problems, of which there are at least two. First, even if the bad information is true and documented, there's the risk of a defamation claim. That risk supports the tendency to keep mum about things
such as poor performance and difficult personalities. The other problem is that sometimes you should disclose the bad things. For example, it's better to reveal "bad" information to a prospective employer rather than unleash a violent employee on a
new and unsuspecting workplace.
It's usually better to be defending a claim filed by the malcontent employee whose violent temper has been revealed than to defend one filed by the victim for failure to disclose. If nothing else, your conscience will rest easier. The trend is to
allow such suits if the facts are strong enough.
At the other extreme, the inexperienced HR person may tell all ― the bad and the good, the undocumented and the documented, the subjective and the objective. Of course, there are few HR professionals in that category. They tend to either wise
up or wash out of the profession pretty quickly.
What is the best policy? It's easy to eliminate the tell-all approach right away. It's almost always just plain dumb. "Loose lips sink ships." (For those of you not old enough to be card-carrying members of AARP or protected by the Age Discrimination
in Employment Act, that's a reference to a World War II slogan warning soldiers to keep military information secret, even when writing home.) Loose lips in the interview process might get you and your employer hauled into court. But as we've noted,
sticking with the name, rank, and serial number approach has its flaws. Let's take a look at the competing concerns and some protective measures you can take.
What is in your best interest?
Of course, the answer to that question is entirely dependent on whether you are conducting a reference check or responding to one. If you are conducting one, you want to get all the information you can. You're not worried about defamation issues;
you're set on hiring the best possible employee. Calling former employers won't do you much good if they won't tell you anything. Sure, you'll catch the bald-faced liars who never even worked for the company listed on their resume, but you won't get
the important information about job performance and interpersonal skills or the dangers an applicant might pose to coemployees or to the public.
On the other hand, if you're responding to questions about a former employee, why stick your neck out? Candor could get you and your employer into trouble. College football coach Woody Hayes, ardent advocate of the running game, once said that there
are three things that can happen when you put the ball in the air, and two of them are bad. The same could be said about responses to job reference inquiries. Candor will help the other employer avoid a bad hire, which is good, but it may make your
company a target for the disappointed job applicant if word gets out about the information you've passed along.
The dangerous former employee
There are reasons why you would want to disclose negative information about a former employee ― even at the risk of getting sued for defamation. One reason is that you risk getting sued if you don't provide the information. If you have
terminated a worker for sexual harassment or because of his violent history and you take the tight-lipped approach with a prospective employer, you may get sued for withholding the information when the new employer finds out or, worse yet, when the
former employee victimizes someone in the new workplace.
As we noted in the introduction, you may find it better to risk the defamation claim than to defend against a claim filed by the woman who was sexually assaulted at work by your former employee. Here are some points to keep in mind as you weigh your
options:
- If you have information establishing that an individual has a history of violence or theft, you should pass it on if asked by a prospective employer. If there was a criminal conviction proving the information to be true, the risk to you is
virtually zero. If there is no conviction but you have documentation and even witnesses to back up what you disclose, the risk of a successful suit by the former employee is still very low. Additionally, doing the right thing by warning the new
employer is not only fair to the person making the inquiry (and to all potential coworkers), but it also protects you from being sued for not disclosing the information.
- Make sure to disclose any limitations in the information you have. For
example, if you choose to disclose an accusation but the employee denied what he was accused of, you should say so. If there were people who were in a position to have information that supported the accused, say so. Truth is an absolute defense to a
defamation claim, but it must be the whole truth, not a half-truth.
- Fairness needs to go in both directions. As you sift through the information, if you see that the mass of evidence raises serious questions about whether anything really
happened (even if at the time it was determined to be true), you probably should not report it.
Being fair to the former employee (and protecting yourself from a lawsuit) means not passing on information that is merely speculation. However, even mere rumors about a former employee may be passed along if: (1) you clearly identify to the person
inquiring that the information is rumor and (2) you don't know that it is false. If, on the other hand, you know that a rumor is bogus, don't mention it. Doing so will restrict you from using the truth defense if you knew the rumor was false.
What about the poor performer?
This is a tougher call. Obviously, your potential liability to the new employer for covering up poor per-formance is not nearly so great as it is when you cover up a history of violence. And the risk of a defamation suit by the employee
remains― perhaps so much so that it outweighs any benefit to the prospective employer. Nevertheless, considering that good (or better) performance is what every employer is after, each one stands to benefit greatly from candid performance
assessments by a job candidate's previous employer. A cultural shift away from the tightlipped approach has to start somewhere. But be careful before you lead the way.
Protections do exist
As we noted, truth is a defense to any defamation claim. Making sure you can prove that what you say is true will go a long way in protecting you and your employer from a defamation suit. Fortunately, there are a number of protections in place to
assist in your decisionmaking when it comes to providing a reference:
- Conditional privilege may exist. In most instances, communication between a former and a prospective employer about a potential employee is privileged. That means it cannot provide the basis for a defamation suit ― even if it contains
inaccurate and damaging information. The benefit of privilege is that a lawsuit will be thrown out by the judge, and it will never make it to a jury.
However, if the information is false and was provided maliciously, the protection of privilege evaporates. Still, the suing former employee has a heavy burden to succeed with his case. He must prove not only that the disclosure was false but also
that it was made with malice, and malice must be proved by "clear and convincing" evidence. That's a heavier burden than the one applied to other elements he's required to prove (e.g., falsity of the information). As a result, there's a greater
likelihood that the judge will throw the suit out even if the employee alleges malice. In short, privilege is a formidable but not impregnable defense to a defamation suit. - Waivers. Another important protection is a waiver of claims by the job
applicant. Whether you are conducting a reference check or responding to one, you should obtain a waiver signed by the prospective employee. Typically, the waiver includes provisions authorizing former employers and other people to respond to
inquiries about the applicant made by the prospective employer.
It should also waive suit against any responding party with regard to the information provided. Sometimes the waiver is limited to responses given without malice, making it analogous to conditional privilege. Remember though that if the information
is true, it doesn't matter whether it was provided maliciously or not; either way, there is no defamation. - Verify whom you are speaking with. Make sure it's the prospective employer and not an agent of the employee, such as a lawyer fishing for
evidence to use against you. It has happened, and in Vermont, a telephone conversation can legally be recorded so long as one party to the conversation agrees.
- Written assurance of confidentiality. Ask the employer to confirm in writing that the
information you provide will be kept confidential and will not be shared with the prospective employee or others outside the hiring decision process. This can be very effective protection against a defamation claim.
- Documentation. One of the
most important and effective protections is documentation. Documentation preserved in a personnel file establishing the truth of what you are communicating (which requires careful adherence to the documented information when you tell the other
employer about performance issues, workplace violence, or sexual harassment) is a critical part of an effective defense.
Bottom line
Without a doubt, in the short run, the military approach is the easiest and safest choice (except in instances of clearly established wrongdoing by the employee). But by perpetuating a culture that deprives us of important information about job
applicants, are we undermining the job applicant screening process? The current system not only helps bad employees get through the system that was designed to screen them out, but it also hurts the good employees whose laudable performance may go
unreported.
Many states recognize the importance of the free exchange of information and have enacted statutes that grant immunity for communications between employers about employee job performance. The statutory immunity is generally similar to what is
provided by the common-law concept of conditional privilege described above but with the added emphasis and stature that legislative adoption provides.
Additionally, it eliminates arguments over what the common law is. A statute that expressly recognizes the importance of candid communications about job applicants and states its intent to mitigate the chilling effect of potential defamation claims
on those communications should influence how courts interpret and apply the statute. Unfortunately, Vermont does not yet have such a law. Until it does, we'll have to be content with less-than-helpful reference responses and fight for protection
under the common law if we are sued.
You can research reference checks or any other employment law topic in the subscribers' area of www.HRhero.com, the website for Vermont Employment Law Letter. Access to this online library is included
in your newsletter subscription at no additional charge.
Copyright 2008 M. Lee Smith Publishers LLC
VERMONT EMPLOYMENT LAW LETTER does not attempt to offer solutions to specific problems, but rather to provide information about current developments in Vermont and federal employment law. Inquiries about specific problems should be addressed to the
labor or employment law attorney of your choice. Vermont does not certify lawyers as specialists in labor and employment law or other areas of concentration.
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