Handling references for former employees is becoming increasingly complicated. For example, not disclosing an employee’s violent or improper conduct can expose your company to liability if that employee thereafter injures someone at the next employer. On the other hand, disclosing information about a former employee that is arguably untrue could lead to defamation and other claims from the former employee. In light of this conundrum, all employers must decide how to handle requests for references for terminated employees and there may not be a “one size fits all” answer.
Recently, there has been a wave of litigation against companies for not disclosing certain inappropriate behavior of their former employees. A typical situation is when an employer terminates an employee for repeated physical violence. Then, his new employer asks for a reference of that employee, and the employee’s violent tendencies are not disclosed (or better yet, they state that the employee was a good employee). Then the former employee ends up physically harming a co-worker at his new employer. In this situation, the new employer may have a claim against the former employer.
Moreover, only a single individual or small group should be authorized to respond to reference requests for terminated employees. This ensures that the policy is implemented consistently and correctly. Employees should be trained on who at the company is authorized to provide employee references. The designated person should also not respond to any reference request until written authorization is received from the former employee.