Reference checks area useful way for employers to gather information that is not readily available. However, employers are often leery about providing references as they are fearful that they could be sued for giving a negative reference about a terminated employee or for failing to tell a prospective employer about an employee’s poor performance, etc. Outside of some very limited exceptions, the law doesn’t impose any responsibility on employers to respond to reference inquiries. However, those who choose to give a reference, even one that is neutral, may face legal risks. Providing a positive reference for a young black employee but only a neutral one for an older Hispanic employee may expose your company to a discrimination claim. Some states have enacted laws providing employers with protection from claims based references.
Arizona – State law provides immunity to employers that provide references in good faith and have a practice of doing so. If the reference is in writing, the employer must send a copy to the terminated employee at their last known address. Also, some statutes provide immunity for providing information about particular misconduct to state agencies. Employers are not required to give references.
Illinois – Under the Illinois Employment Disclosure Act, employers who provide truthful written or verbal information or information they believe in good faith is truthful about a current or terminated employee’s job performance are immune from civil liability for the disclosure and the consequence of the disclosure. Employers are not require to give references.
Indiana – Employers who disclose information about current or terminated employees are immune from civil liability unless it is proven by an abundance of evidence that the information was known to be false at the time of disclosure. Employers are not required to give references. However, upon written request by the terminated employee, employers must provide a termination letter, stating the nature and character of the former employee’s position, how long the employee served in that position, and why the employee was discharged.
New Jersey – No law. However, state common law recognizes claims such as defamation and malicious interference with prospective employment/contract, which can be applicable in this context.
Oregon – Employers have a qualified privilege when making references if statements 1.) are made in good faith, 2.) serve a business interest or purpose, 3.) are limited to that specific purpose, 4.) are made on proper occasion, 5.) are communicated to proper parties. Employers disclosing information about a former employee’s job performance to a prospective employer are presumed to be acting in good faith unless the employer knows the information is false or deliberately misleading. Employers are not required to give references.
Washington, D.C. – No statutory restriction.
If you have an interest in learning the laws in other states, please contact New Focus HR.
Written By: Kristen Shingleton, M.B.A., CCP
President, New Focus HR LLC