When employees move on to bigger and better things, relocate, or get laid off, former employers can expect reference checks from new job prospects. Those phone calls, though, can be a little nerve wracking. Employers don’t know what information they can legally disclose and so they end up offering no more than dates of employment, job title, and maybe salary.
Indeed, in an age when harassment and defamation are often retaliated against in court, it is wise to be careful when talking about former employees. But what is actually legal may surprise you.
Most people think that employers are limited to providing only basic details or neutral information. That’s all that many employers are willing to give in an attempt to protect themselves from potential lawsuits. Further, large companies create policies for managers that protect the company overall.
But legally, former employers are not actually limited in what they can and can’t say about employees as long as it is truthful and relevant to employment.
Laws Regarding Disclosure
There are no federal laws that prohibit employers from giving factual information about former employees to prospective employers though some states do offer guidelines. Employers and managers should be careful not to disclose medical information or personal information but offering facts about employment, even negatives ones, is fine.
In fact, it could do more harm than good to withhold this information in some cases. Prospective employers are looking for information about theft, dishonesty, incompetence, etc. That’s the purpose of reference checking. Of course, what they are really hoping to hear is a stellar review but a bad one can be just as helpful in the hiring process.
Things to consider when offering a review:
- Verify the caller. If you’re expecting a call from an employer, you probably don’t need to verify, but if you’re not, get a call back number.
- Don’t reveal health related information, even if it impacts performance.
- Avoid answering subjective questions.
- Don’t give opinions.
- Do not deliberately mislead a prospective employer.
- Offer only factual information or verifiable suspicions.
If Employees Sue
Employees could try to sue a former employer over a bad reference. Most likely, however, a lawyer would tell them to forget it because the suit wouldn’t make it anyway.
In Colorado, for example, former employers are immune from civil liability provided the information given was truthful.
“Colorado law states that any employer who provides information about a current or former employee’s job history or job performance to a prospective employer of the current or former employee is immune from civil liability and is not liable in civil damages for the disclosure or any consequences of the disclosure. This immunity shall not apply when:
- The information disclosed by the current or former employer was false AND
- The employer providing the information knew or reasonably should have known that the information was false.”
Most states provide guidlines on what is and isn’t allowed in employee references. Generally, employers can give any information that is factual and relevant to employment. Even if the fact is that you suspected the former employee was stealing from the company, the suspicion is a fact and so the statement is factual. However, if you suspect that the employee has marital problems, depression, and probably drinks a lot on the weekends, it might be difficult to back up the suspicion and even harder to back up how this might be relevant to employment.
It’s a good idea not to ramble on about the employee and to choose your words carefully. After each question, you might say to the caller, “Give me a second to gather my thoughts.”
Lawsuits over what was said in a reference, especially ones that have not been dismissed, are extremely rare. Be professional and honest and even a negative reference should not be a problem.
Drawbacks of a Neutral Reference
For the most part, employers are afraid of retaliation against negative references. Hence, most employers are willing to provide positive information but will give a neutral reference for employees with a negative record.
This is unfortunate for a couple of reasons. One, as I mentioned before, potential employers want to avoid hiring trouble employees. And two, as this practice becomes widespread, hiring managers sometimes believe that neutral references imply that the employee was unsatisfactory in some way. This belief hurts those who were great employees but worked for companies with neutral reference policies.
If an employee wasn’t up to par, factual information should be offered to verifiable employers.