Friends, Foes and Former Employee Reference Letters
Employers today find themselves in the position of saying too little for fear of saying too much when it comes to providing references for former employees. Should you tell the truth and nothing but the truth whether good, bad or neutral? It may be surprising, but there is no right answer. As a former employer, you can generally say as much or as little as you like, as long as you do not knowingly provide false information. By definition, a reference allows you to disclose a significant amount of information about a former employee–but as with any business dealing, it pays to think before you speak.
Whom can you speak about?
First, no employer should ever feel pressured to act as a reference for a former employee. It’s completely acceptable to express a company policy of offering no references for any former employees. However, there are ways to communicate sufficient information to a prospective employer without an outright refusal to act as a reference. Though positive references can be a pleasure to provide, even a reference for an employee that would otherwise be negative does not have to be a source of concern, if an employer is careful with the content of the reference.
What information can you provide?
Legally, as an employer you can provide as much information as you want about the time a former employee worked at your company, but a good touchstone to follow is simply to stick to the facts. Whether trying to harm a former employee by elaborating on their shortcomings or trying to help a former employee by covering up the truth–anything beyond the facts could land you in legal hot water.
Some companies now limit the information they will provide to the basics, including dates of employment, job title and salary. In the alternative, you could require your employees to sign releases permitting the release of any and all reference information to eliminate the risks of a defamation suit. A compromise solution is to prepare a reference letter that the employee approves before leaving to use in response to all future inquiries. Regardless, these safety measures are unnecessary when the information in the reference letter can be easily documented by maintaining attendance records, performance evaluations or other evidence as support for any claims made about a former employee. Fear of a lawsuit should not deter an employer from praising a prize employee or from communicating a past problem to a prospective employer.
Significantly, do not underestimate the power of saying “no comment” in response to an inquiry about a former employee. Without exposing yourself to any risk of litigation, a reference letter that deliberately avoids problem areas can raise a warning flag to the next employer without fear of retaliation by the employee. However, keep in mind that silence about a potentially dangerous problem with a former employee could lead to a lawsuit from an injured third party rather than a defamation lawsuit by the employee. Just stick to the facts without embellishment or misrepresentations.
What about defamation lawsuits?
When providing references to former employees, whether terminated amicably or not, the specter of a defamation lawsuit looms constantly in the background. Such claims do not challenge any of the reasons for the employee’s dismissal, but look instead to the content of the reference letter or communication for anything that might damage the former employee’s reputation or good standing in the community.
Fortunately for employers, defamation is very difficult to prove. The former employee must establish that an employer intentionally or negligently made a false statement about the former employee that tends to harm the employee in some way, such as jeopardizing any chances of gaining new employment. Though this may sound somewhat overcomplicated and vague, there are two general rules to keep in mind when discussing a former employee:
- Personal opinions about a former employee are permissible, so long as the opinion is offered in good faith as a way to inform the prospective employer rather than retaliate against the former employee.
- Truth is always the best defense. Stick to the facts, and you can protect yourself from any potential legal risks.
Though it may appear to be a fine line between what is acceptable, and what is not, employers should take heart. In response to the growing number of defamation lawsuits across the country, many states have begun to pass laws protecting employers from speaking out frankly about former employees. Check with an experienced employment attorney in your area to find out what legal rights you have as an employer in dealing with former employees.