References present a dilemma for many firms: Whenever an employee leaves you must decide whether you will provide a reference to prospective new employers and if so, exactly how much information you will provide.  As the number of defamation suits filed by former employees against their prior employers continues to increase, how your company handles reference requests has never been more important.

Defamation Suits – Potentially Costly, but Tough to Prove

The good news for employers is that defamation suits are tough to prove.  The prior employee typically must show that the employer intentionally made false statements with intent to harm the employee (E.g. damage his/her reputation, prevent him/her from getting another job).  If you stick to easily verifiable facts and avoid making statements that you don’t definitively know to be true, you are on fairly safe ground. 

Insist on a Company Policy

To reduce the potential of having to defend against a costly defamation suit, it’s best to have a company policy for providing references.  You don’t want current employees, even managers, speaking ‘off the cuff’ about prior employees.  Here are a few examples of reference policies:

• Don’t say anything – a perfectly acceptable option.  Or, you may wish to just provide only the basics, including dates of employment and job title.
• Create a written reference letter and obtain the departing employee’s approval prior to his/her departure.  This way, the employee knows in advance what your reference will include.
• Obtain a written release signed by the employee.  This agreement should grant you permission to release reference information to prospective employers and ensure that the employee doesn’t sue you for doing so.

Rules of Thumb

While certainly not all-inclusive, the following are suggestions to consider when crafting your company policy on providing references:

• Don’t knowingly provide false information
• Be careful not to exaggerate or in any way misrepresent the employee’s performance
• Keep it brief
• Stick to the truth – facts you can prove
• If you plan to provide more than just dates of employment and job titles when giving references, don’t hide bad information. Failing to warn a prospective employer about, for instance, a prior employee’s violent temper at work, could land your company in murky legal waters.
• Consider having a single, trusted employee provide all references for prior employees.  This greatly improves consistency in the type of information provided from one reference to another.
• Consider providing only written references.  This way, you will have a copy of exactly what information was reported in the reference and will be better prepared should an issue arise later.

As this is an evolving topic in employment law, we encourage you to check with an experienced employment attorney to explore your rights when providing references to former employees.

Triad Engineering Corp has specialized for over 40 years in helping our clients fill their technical staffing needs on a contract, contract-to-direct and direct hire basis.  Triad is locally owned and operated, with a large network of qualified engineering professionals throughout New England.  Please contact us at 781-273-1880 or visit www.triad-eng.com for more information on how we can help you achieve your technical hiring goals.