Employee References – What Can Employers Disclose?

Human resources professionals and business owners have long debated about giving references on former employees. It’s both tempting and scary to share 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 a future position.

Before you decide whether to give in to temptation or play it safe, it’s good to know the pros and cons of giving references and sharing such information.

Name, Rank and Serial Number

For many years now, employers have limited the information they share about former employees to avoid lawsuits based on fear that a former employee claiming of having a missed job opportunity because of a negative reference. But employers do have alternatives to the strict “name, rank, and serial number” policy.

Some prospective employers ask, “Is this person eligible for rehire?” The safest option is to answer no without any specific commentary or details on why. If asked why you cannot comment further, the best answer is that company policy forbids it.

What if the employee is fired?

The decision about what to say in an employee 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. 

Defamation is generally defined as damaging the good reputation of someone by slander or libel, which is in turn defined as the action of making a false statement to another person resulting in damaging a person’s reputation. In Texas, truthful statements cannot form the basis of a defamation claim. However, while that may appear to be an easy trap to avoid, there are some serious pitfalls. 

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 padding hours, inappropriate comments to another employee, 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. 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. 

One option is to inform a fired employee at dismissal that you won’t be able to give a positive reference.  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.

Other Considerations When Giving Employee References

Whether or not an employee quits or is fired, it is also dangerous to say positive things about a former employee, such as “bright” and “energetic” without also saying – truthfully – “thief” or “persistently late” because by providing a partial reference that is not truly reflective of that person’s overall suitability for employment and you run the risk of opening the company and yourself personally up to a claim of false representation. If that former employee was known to have stolen from the company but is nonetheless given a glowing reference, the next employer could look to the referring employer to recover its losses when the bad apple steals from it.

When it comes to giving employee references, other recommendations include keeping a reference brief, making sure your company designates a specific person or department to handle reference requests, and providing only the information the company policy allows you to disclose. Also, treat all former employees similarly. Providing information on some employees but not others may be grounds for a discrimination claim.

Karen Ensley

Ensley Benitez Law, PC

469-983-6500

karen@eblawtexas.com

© Karen Ensley and Scott Colley, Ensley, Benitez Law, PC., 2021. All rights reserved. This article is provided for educational reasons exclusively and is not meant to be construed as legal advice. Ensley Benitez Law, PC, will represent you only after being retained and that agreement is made in writing.