Human resources professionals have long debated whether to give references about former employees. It’s simultaneously tempting and scary to spill what you know about a less-than-desirable former employee. You also may be eager to sing the praises of an exemplary ex-employee you want to see do well in future endeavors.
Regardless of whether you decide to give in to temptation or play it safe, it’s good to get the pros and cons from experts. A group of attorneys recently was asked to respond to a question about the legality of giving references. They were asked about the common practice of releasing only dates of employment, position, and pay when contacted for a reference and whether there’s any legal reason for not giving a more detailed reference. 
Going beyond the basics
Peyton Irby, special counsel in the Jackson, Mississippi, office of the Jones Walker law firm and editor of Mississippi Employment Law Letter, pointed out that years ago many employers started giving limited information to avoid lawsuits based on former employees blaming a missed job opportunity on a negative reference. But employers do have alternatives to the strict “name, rank, and serial number” policy.
“Some prospective employers now ask, ‘Is this person eligible for rehire?’ A negative answer that is truthful should shield you from liability,” Irby says.
What if the employee is fired?
Steve Jones, a partner at Jack Nelson Jones & Bryant and editor of Arkansas Employment Law Letter, says the decision about what to say in a reference is complicated when an employee is fired. “If you aren’t careful in your statements to prospective employers, you may leave yourself open to a defamation lawsuit.”
A former employee can’t prove defamation without showing that you intentionally damaged his reputation by making false statements. “While that may appear like an easy trap to avoid, there are some serious pitfalls,” Jones says.
“Most of the time when an employee is fired, it’s for reasons that make him look bad. For example, if you let him go for stealing, excessive tardiness, or lying about his job qualifications, it’s hard to explain the discharge to a prospective employer without damaging the employee’s reputation,” Jones says. “In addition, it’s often difficult or impossible for an employer to fully prove what it knows to be true. As a result, the best policy is to say as little as possible and stick to the facts your company can prove.”
Jones suggests informing a fired employee at dismissal that you won’t be able to give a positive reference. Obtaining a written release from ex-employees also is recommended. “To give yourself increased protection from lawsuits, you may ask departing employees to sign a release that gives you permission to provide information to prospective employers and prevents them from suing you over the information you provide,” he says.
Jones emphasizes that employers should always follow the company’s reference policy. His “bottom-line recommendations” include keeping a reference brief, making sure your company designates a specific employee or department to handle reference requests, and providing only the information the company policy allows you to disclose.
State-specific laws
Some states have laws intended to protect employers that give references, but the protections are limited. South Carolina is one state with such a law. Reggie Gay, a shareholder with McNair Law Firm and editor of South Carolina Employment Law Letter, says employers must strictly comply with the law’s provisions to retain immunity.
Even employers in states without immunity laws may not want to refuse all reference requests. “A blanket prohibition against providing any information can cause problems as well,” Gay says. “That is true especially if you have knowledge of a former employee’s behavior that could result in harm to a third party. In those situations, you may have an obligation to disclose the information. Also, treat all former employees similarly. Providing information on some employees but not others may be grounds for a discrimination claim.”
Nebraska is another state with a law providing protection for good-faith references. Mark M. Schorr, chairman of the labor and employment law practice group at Erickson & Sederstrom and editor of Nebraska Employment Law Letter, stresses that immunity is not absolute, though. “If a former employer provides information that it know is false or provides a reference with malice, a deliberate intent to mislead, or reckless disregard for the truth, then immunity does not apply,” he says.
Emily Hobbs-Wright, an attorney with the Holland & Hart and an editor of Colorado Employment Law Letter, says Colorado also has an immunity law, but like such laws in other states, “the immunity doesn’t apply if the employer provides false information when it knows or reasonably should know the information is false.”
I pracitce in my HR Director role and teach – in one of my courses – the concept of qualified priviledge, which supports providing factual information, both negative and positive. to a prospective employer on a former employee. I reference the 1993 Paul Calden case, where a good reference was provided, and Mr. Calden ended up shooting five of the execs in his new firm, killing three. I drive by the site where the incident happen twice a day.