MANAGEMENT: Checking (or giving) employment references

For many business owners, fear of lawsuits keeps them from telling other employers much when they are called about a former employee. Yet these same business owners are anxious to have as much information as possible about potential employees when it’s their turn to hire.
There are two main types of lawsuits that are filed against businesses that give out information about former employees. The first type is defamation – a claim that you gave out information that is false or derogatory, resulting in damage to the former employee’s reputation.
State laws vary in how they protect employers from claims of defamation, but in general:
– Always tell the truth. The truth is generally a complete defense to any claim of defamation. Make sure you have the documentation to back up what you say. Don’t exaggerate, and don’t draw conclusions from an employee’s behavior: If someone was often late for work, say they were repeatedly late for work; don’t say you think they have a drug problem because they were often late for work.
– Only give out information to someone with a business need to know – such as another business that is considering hiring your former employee. You are not protected from defamation claims if you bad-mouth a former employee at a party or industry event. Make sure you know who you’re talking to. Ask for a request in writing, or call them back to confirm they are who they say they are.
– Only give out information that is job-related. Ask about the job for which you former employee is applying and only comment on his or her ability to perform those types of duties. Do not give out information that violates employment rights; information that you can’t ask about in a job interview (such as race, age and marital status) should not be discussed during an employment reference check.
The second type of lawsuit that is filed against businesses that give out information about former employees is an invasion of privacy lawsuit. This can occur if you give out information that the former employee had an expectation would be private.
Again, stick with job-related information during employment reference checks to protect yourself against this type of lawsuit. Another way to protect yourself is to remove the employee’s expectations about what will be private. Do this by giving all employees a written policy about what types of information will be given out during employment reference checks.