NCPA - National Center for Policy Analysis

Employment References Open the Door to Law Suits

February 13, 1997

For fear of being sued for defamation, most companies are being forced to provide only the scantiest of information on letters of reference for employees. That is creating problems for would-be employers, who are receiving no more information than an applicant's previous job title and dates of employment.

And last month a court ruled a company could be sued for saying even nice things about a former employee. Three California school districts had provided a positive reference for a former administrator -- without mentioning he had been accused of sexual harassment. After molesting a 13-year-old female student at the new school, the California Supreme Court said the girl could sue the former employees who had furnished the faulty reference.

In 1995, the Society for Human Resources Management surveyed personnel managers across the country to see if they were giving -- and getting -- adequate information in letters of reference.

  • Nearly two-thirds of the 1,331 respondents said their companies had refused to provide reference information out of fear of lawsuits.
  • More than half said they were not getting enough information from prior employers about applicants' "violent behavior."

Experts say employers can, in theory, protect themselves from defamation suits by requiring a signed release from the former employee before giving the reference. And 26 states have passed laws protecting the employer if he acted in good faith.

The U. S. Supreme Court is now considering whether to let former employees sue for bad references under federal civil rights law.

Source: David A. Price (Investor's Business Daily), "Good References Pave Way to Court," USA Today, February 13, 1997.


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