Employers often have a conundrum when it comes to employee references. Do you give them for everyone? What if an employee was let go for poor performance—how do you give a good reference in that case? It’s a bit of a catch-22; you can’t give a good reference for a bad employee, but you may not want to risk a defamation of character lawsuit for giving a bad one.
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That said, it’s often not possible to go the other route—giving no references—either; some states have laws that outline what information must be provided. Additionally, employees who left on good terms could benefit from an honest reference. Let’s take a look at a few scenarios and look at the risk the employer faces in each one.
Good Employee, Good Reference
This is seemingly the most straightforward situation. So, what’s the risk of giving good employees good references when they leave your company on good terms? The risk here is minimal, but it still exists, mainly in the form of the risk of discrimination claims from anyone who does not fall into this category. If you’re giving references for some employees but not for all, it could appear to be discriminatory on the basis of an illegal preference, even if it was not intended that way.
Good Employee, No Reference
To avoid the risk we just outlined, some employers opt to give no references at all, even for employees who leave on good terms and who were otherwise good performers.
The catch here: To a hiring manager calling for a reference, you might be sending a signal that you’re not saying anything because there’s nothing good to say, which could negatively impact the former employee. This is unfortunate but is less of a risk for the organization and is why many employers choose this route. However, be sure to check state and local laws; some have provisions outlining what information must be provided upon request.
Bad Employee, No Reference or Honest (Negative) Reference
It’s probably obvious that this scenario is problematic. Even though you’re being honest about the situation and trying as best you can to adequately inform the new employer about the situation, it’s still a risk because the former employee could sue for defamation.
This is a real risk because employee terminations rarely are one-sided. No matter what the person on the phone (likely the manager or HR representative) knows to have happened, the former employee will likely have their own version of events. And, depending on the specifics, the employee thus may have a case for suing for defamation if a poor reference causes him or her to miss out on an employment opportunity. Of course, it will be difficult to prove defamation unless the company makes statements that are demonstrably false, but who wants to get caught up in a lawsuit either way? It’s probably better to stick to only statements that are proven facts, not to allegations or opinions.
Bad Employee, Good or Neutral Reference
This is another big risk, but it happens. To avoid the situation previously described, some employers opt to only give good references or simply to confirm employment information and not say anything that is subjective in any way.
The first risk lies in the fact that the new employer may be rightfully angered if information that was pertinent to the employee’s background was withheld. In extreme cases, such as cases where the employee had a history of inappropriate, violent, or otherwise illegal behavior, the new employer may even be justified in taking legal action for the lack of information presented in the reference.
There’s another legal risk as well. If the employee was let go for a cause, and then receives a good reference, that may appear to be evidence that contradicts the stated cause of termination. As such, the good reference could be used as “proof” that the termination was not actually for a cause and that it was actually on the basis of a discriminatory factor instead (i.e., the termination for cause was a cover up). For this reason alone, many employers prohibit other employees from giving references for one another, even on sites like LinkedIn.
Tomorrow, we’ll learn what you can do to minimize risk when it comes to employee references, plus an introduction to BLR’s HR publication, HR Playbook, Employee Retention and Satisfaction: How to Attract, Retain, and Engage the Best Talent at Your Organization.
I disagree.
I think the first Q to ask is: “what advantage is it to my company to give a reference for a departed employee?” Your company is where your duties lie. The answer to that Q is nearly always “nothing,” such that references really ought to be minimized in accordance with local law, and standardized to avoid any discrim risk.
As a HHr, I am often confronted with this scenario, so be ready for me to test your limits — sometimes all I get is a hesitation or catch in the voice around “eligible for rehire?”
Further, instruct your employees that they are not to give “personal” references from home about the Departed’s work for you, lest they assume “Personal” liability for any mistakes that the company will not defend. Make that verry clear (e.g., handbook, signed), so that when somebody inevitably ignores that good advice, you retain an argument that any liability belongs to the individual referencer.
Why would I ever bother making another comment when your moderation process is this clunky?
Sue, sorry for the delay in posting. Your first comment had gotten caught in the moderation queue. It is posted now.