Warning: Reference Calls Could Entrap You

Picture this: You get a call from someone who says he is considering hiring a delivery person who used to work for your company and that the former employee gave your name as a reference.

You warn the caller about the applicant, describing the person's bad attitude. The former employee received several speeding tickets and once got into an accident with the company van. Plus, there were rumors going around that the driver had a drinking problem.

The call takes about five minutes. You hang up and forget about it. A couple months later, you're hit with a lawsuit initiated by the former employee claiming defamation.

What happened? The caller seeking a reference wasn't really a prospective employer. The caller was with a background checking service that was hired by the former employee to test what you might be telling real prospective employers.

If you malign former employees, you may open yourself and your business up for legal action.

This practice is sometimes called "blacklisting" -- when employers deliberately paint a negative picture of former employees and prevent them from getting new jobs.

How likely is it that you will receive a bogus reference check call? It's getting more likely all the time. Many people are learning how easily they can hire a third party to make reference calls for them and document any negative responses. It's as easy as doing a search on the Web (see below for some examples).

What's the risk if you disclose negative information about former employees? Nearly all states have civil remedies for defamation or untruthful statements said about a person. Some states have laws that make it criminally illegal for an employer to blacklist or defame a former employee.

Fortunately, many states have also enacted reference-checking immunity laws to protect employers from civil liability when they give references in good faith.

What to Do

• Give out information only if you have the signed consent of the former employee to provide such information to prospective employers.
• Designate one person in your company to give references. Ensure the person is trained in what to say.
• Don't provide negative information that you can't prove is true. Only reveal factual information that you have documented. For example, in the case of the delivery person described above, you can describe the speeding tickets and the accident with the company van because you can provide evidence of them but refrain from repeating rumors about the driver's drinking problem. Stay away from vague, subjective comments about a "bad attitude."
• Don't volunteer information that is not requested.
• Don't casually give out information over the phone or in e-mails. Request written inquiries from prospective employers, along with signed statements from the former employee giving you permission to give out work-related information. Respond in writing and provide only information that is accurate, truthful, objective and without an intent to harm.

Consult with your attorney if you have any questions about the best way to handle post-employment inquires.

What's Available?

A quick search on the Internet can find several affordable services that job seekers can hire. Here's what they claim:

• One reference check company offers to confidentially contact past employers to verify if "accurate and objective" information is given out. After the reference check is complete, the customer gets a detailed written report about what was revealed. "Many of our clients have successfully pursued legal remedies for defamation on the basis of the documentation supplied in our reports," the company states on its website.
• Another service states: "If you are being slandered or defamed or if your references are saying things that just aren't right, use our employment reference checking services to find out and put a stop to it NOW."