Giving References for Former Employees — What You Need to Know Whenever an employee leaves a company, an employer may at some point be asked to give an employment reference for that employee. Often the subject of employment references evoke a nervous feeling by the thought of one word; lawsuit. Increasingly, people who have been unable to find work are blaming former employers for hindering their job search by giving negative references to prospective employers. As a result of these outcomes, employers are reluctant to give out references. Giving employment references does not have to be a frightening experience for employers as long as they know the risks involved and have procedures in place for individuals to follow when offering information about a former employee. Giving References - The Risk Let's face it: most reasons for firing make the employee look bad. An employer often cannot prove what he or she strongly believes to be true - that an employee is stealing from the company, is incompetent, or lied about job qualifications. An employer who makes such statements about a former employee could find themselves in the position of defending their statement, possibly in a court of law. A former employee who believes they have been harmed by a bad reference may bring a defamation suit against that employer, even if illegal defamation has not occurred. Although the employer may have been perfectly within their right to share employment information with a prospective employer, it is expensive and time consuming to be involved in a lawsuit. This is why, when asked, a lawyer will typically advise that the best policy is to say as little as possible and stick to the facts that can be proven. It goes without saying that companies must also be aware of the problems that could arise if they offer up untrue information or even no information at all. For example, if you had to fire an employee for making violent threats at work and then did not divulge this information to a prospective employer, you may find your company in a legal battle with the employer who hired a violent employee based on your failure to warn them. On the other hand, if you chose to offer no information on a former employee, the prospective employer may assume it's because something is wrong with the employee, causing them to not consider them for the position. Protect your Business with a Reference Policy Often companies place strict limits on the information that may be disclosed about former employees during reference checks. Information such as a candidate's official title, dates of employment, and salary may be all the information a company will or is able to provide based on their limitations. While this limiting of information may reduce exposure in a lawsuit, it has a negative impact on the business community. To allow for more information to be offered, companies should consider adopting a reference policy that would enable them to provide a fair and accurate evaluation of a former employee. The best reference policy is clear, premised on employee consent, promotes objective and accurate statements, maintains the qualified privilege, and is strictly enforced. The following are a few suggestions that may be included in a company's reference checking policy: Warn difficult employees that a positive reference will not be provided. More than likely if an employee leaves a company on bad terms they will know this already. But a company can avoid problems at the outset by stating the obvious: "I cannot provide a positive reference for you." Keep references brief. If you choose to tell more about a former employee than just their job title, dates of employment and salary, keep it as brief as possible. In addition, do not offer any other information other than that asked of you by the prospective employer, especially if the information will be negative in nature. Stick to the facts. The best defense to a defamation lawsuit is the absolute defense of truth. Limit references to objective, verifiable, and irrefutable statements that are accurate and easily documented. All statements should be supported by evidence found in the former employee's personnel file and all negative information should be investigated for accuracy. Designate one person to give references. The best way to ensure consistent reference disclosure is to limit the number of people who are permitted to give references. Require that all reference requests be directed to the department or chosen person that will be responsible for offering reference information. Keep a record of all references given. Make a copy of all references provided by your company. This way there should never be a dispute about what is said during a reference check. To make this easier, you may want to adopt a policy of only giving written references to make documenting the reference easier and more accurate. Require that each request be accompanied by an employee release. If you want to make absolutely sure that your company is protected against a lawsuit, it is important to require former employees to sign a release - an agreement that gives your company permission to provide information to prospective employers. Such an authorization should release your company, employees, and agents from all claims that may result from the reference. Conclusion When a potential employer calls for a reference, you may feel trapped between wanting to tell the whole truth and fearing a lawsuit if you say anything unflattering. Unfortunately, this fear is not unfounded. The number of defamation lawsuits filed over negative references is growing all of the time. Even if your former employee can't successfully prove illegal defamation of character, you will still have to spend precious time and money fighting the allegation. Remembering the risks that you can face due to employment references and sticking to a strictly enforced policy is the safest way to avoid unnecessary and costly lawsuits.