Sep 102008

Many HR professionals and training/business coaches tell their clients that they need to check references on all new hires. The problem is that due to the fear of lawsuits, companies are told they should be cautious in giving references. Because of these two diverse thoughts, we are caught in a on-going circle of debate – to reference or not to reference.

Providing inaccurate or inappropriate information or asking inappropriate questions may provide grounds for discrimination, defamation, or invasion of privacy lawsuits. Employers may not ask about or give out information about any of the issues protected by state or federal law. These issues include age, race, religion, national origin, or disability. Also, employers may not give false statements that damage a former employee’s reputation; nor may they provide any embarrassing personal facts.

However, it is important that employers understand they have an obligation to provide information about harmful tendencies and failure to provide that type of information can lead to negligent hiring issues by the new company and lead to claims of misrepresentation.

Many companies skirt the issue by only providing “Name, Rank, and Serial Number”, which is only a verification of title, date of hire and salary or earnings. This approach cannot help the company seeking information and may in fact harm the chances of good employees finding a good job. If the employee cannot find a job, they may file for unemployment, which may affect the old company and add to their unemployment taxes.

What is the answer? Employers can limit their liability and still provide useful information by:

  • Develop and follow a written policy on reference checking that specifies who may give references, what information may and may not be given, to whom may information be given.
  • Limit the number of people in your organization who may give references and make sure they are trained in how to give information to others.
  • Always make sure you have the written consent of the former employee to provide a reference, and if possible indicate that the reference could be based on past performance reviews.
  • Ask for a written release of liability from the employee (usually provided through the new company) before a reference is given.
  • Give only truthful, job-related information based on your documented facts.
  • Do not give references with prejudices or malice and never, ever, make statements about the character of an employee.
  • Make sure the person you are giving the reference to is authorized to receive it and has a legitimate need for it.
  • Train those who give and receive reference on how to do it legally and correctly.
  • Document all reference requests and what information you provided.

Finally, when in doubt, check with your state to see if you are immune to civil liability for good-faith references and if necessary, ask legal counsel for guidance. This would be especially true if there are issues that may seem to be “delicate”. No matter what side of the coin you are on, do your due diligence and check and give references when needed.

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  3 Responses to “Checking and Giving References – Both Sides of the Coin”

  1. Lola,
    Great article. Your readers may also be interested to learn about some innovative online tools specifically built to enable employers to acquire valuable information from references without the time consuming phone calls. The better tools support many of the key points you raise here including a release of liability, focusing on job-related skills, and automatically providing complete documentation of the entire process.

    (Full disclosure: I work for one of these firms.)


  2. Good thoughts. Checking references effectively is the strongest inoculation against the performance issues of employees that can eventually come back to bite managers in the you-know-what. It also helps managers in that eternal quest to place employees in the right seat of the bus. If hiring managers are smart and perform due diligence diplomatically, there is no need to fear legal repercussions.

  3. I haven’t heard of many high profile UK cases regarding legal action following a reference. I wouldn’t be surprised if there were an increase in cases in the next few years with staff turnover so high. It is something I will consider in the future. Thanks for sharing the tips.
    Tom recently posted..Here’s why Google Alerts will find your dream jobMy Profile

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