When a former employer agrees to give a reference, it must tread very carefully—a misrepresentation can result in a lawsuit. This leads some employers to go with a “no reference” or “limited reference” policy. But that approach harms good employees who can’t get the good references they deserve, and in extreme cases, it increases the former employer’s risk of being sued for negligent failure to warn about unsuitable employees. There’s a solution: Follow these truthful reference guidelines.
Employers may give references and minimize the risk of defamation lawsuits by ensuring that only factual, truthful information is disclosed. Use these guidelines when preparing a reference letter:
- Give advance notice of the reference. The best way to reduce the risk of lawsuits is to inform the employee in advance of the facts that will be given in future references. Don’t just say that the recommendation will be “good” or “unfavorable.”
- Disclose only truthful information. No employer who conveys truthful information in a reference will be liable for defamation. Inform all supervisors, managers, or others who may be called on to give a reference that they must ensure that information conveyed is factually correct.
- State facts and avoid conclusions. Avoid conclusory statements such as the employee was “insubordinate” or “incompetent.” Instead, state that the employee refused to follow supervisor directions or didn’t meet production standards. The facts described in the reference should speak for themselves. Not all reference questions have to be answered, particularly those calling for conclusions (e.g., “Would you rehire this person?”).
- Include favorable facts about the employee. Including favorable facts about the employee will not only decrease the chance of a lawsuit, but reduce the risk of claims of malice and consequent loss of the employer’s qualified privilege in a defamation action (see CC §47(c) on the privilege).
- Personnel file information must be factually correct. A reference is only as truthful as the underlying information on which it’s based. Front-line supervisors should be trained to place only accurate, verifiable information in personnel files. When an employee leaves, review the file to ensure that only current and accurate information will be relied on by those responding to reference requests.
- Obtain a release from the employee. Employers may also want to obtain a signed release from employees on specific information that may be disclosed to prospective employers in a reference letter. The release should provide the employee with as much information as possible about information to be released, including dates of employment, job titles held by the employee, a statement about the employee’s work performance, all opinions to be provided about the employee, and the reason for termination of employment.
- Designate a limited number of employees to give references. Employees should be notified, preferably in a statement in an employee handbook, that references may be provided by only one or two designated employees. This will minimize the risk of contradictory or unauthorized references on behalf of the company and ensure uniform reference standards throughout the organization.
- Avoid responding to oral reference requests. Require all employees asking for references to request the reference in writing and to provide a signed statement from the employee authorizing the prospective employer to obtain a reference. Reply only in writing, and keep a copy of all documentation.
Get more of this type of practical guidance on all aspects of discipline and termination of employment in CEB’s Advising California Employers and Employees, chap 17.
Other CEBblog™ posts you may find useful:
- Exiting Gracefully: The Termination Letter
- Should Employers Use Progressive Discipline?
- How Long to Hang On to Those Personnel Records
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