December 18, 2015
Employers frequently require references from job candidates, and most jobseekers agree that the best references are those from prior employers. Consequently, candidates often include their old bosses as references even after departing their jobs on negative terms. Unfortunately, being named as a reference in such situations can put employers in a difficult position and even lead to lawsuits.
State law recognizes the dangers employers face in disclosing employee information and provides substantial protection for employers. In Idaho, for example, an employer cannot be held civilly liable for disclosing information about the “job performance, professional conduct, or evaluation of a former or current employee to a prospective employer…” if the employer provides the information in good faith.
Additionally, under Idaho law there is a rebuttable presumption that an employer who discloses information about an employee’s job performance, professional conduct, or the employer’s evaluation of the employee at the request of the prospective employer or prior employee is acting in good faith.
An employee can only rebut that presumption by showing, through clear and convincing evidence, that the employer disclosed the information knowing it was false, with reckless disregard as to its falsity, or with deliberate intent to mislead.
Idaho employers have significant protection in disclosing employee information. However, if disclosed information is inconsistent with previous employee documentation, such as employee reviews, the inconsistencies might evidence bad faith. For example, an employee who received positive work-product reviews throughout his employment could argue that his or her employer acted in bad faith by suggesting that his or her work product was sometimes subpar to a potential employer. Even if the disgruntled employee is not able to show bad faith, his or her decision to file suit may be extremely costly for the employer.
In short, the decision to disclose information about a prior employee can create both legal and financial difficulties for employers. Many employers, motivated by the dangers of disclosure, divulge only basic information about employees such as confirmation and dates of employment and the employee’s final position.
RISKS OF UNDER DISCLOSING
However, in some instances it is unwise for an employer to under disclose as well. For example, third parties harmed by employers’ failure to disclose have been awarded damages against the employers in several cases. Consider the case of Randi W. v. Muroc Joint Unified School District, 14 Cal. 4th 1066 (1997). In Muroc, employers allegedly knew of an ex-employee’s sexual misconduct with students at the schools where the employee previously worked. The employers did not disclose the misconduct in recommendations prepared on the employee’s behalf. Another school hired the employee, and he molested a 13 year old girl. Through her guardian, the girl sued the previous employers alleging that her school would not have hired the employee if the previous employers had disclosed the misconduct. The court held that employers writing letters of recommendation owe third parties the duty “not to misrepresent the facts in describing the qualifications and character of a former employee, if making these misrepresentations would present a substantial, foreseeable risk of physical injury to the third persons.”
INSIGHTS FOR EMPLOYERS
Knowing the information that should and should not be disclosed may seem daunting. The following tips should help alleviate employer’s disclosure concerns.
- Be basic. It is essential that you provide only information that you know to be true and accurate when referring employees. It is unnecessary to go into great detail or answer every question posed about the employee – especially if you are unsure of the answer.
- Document. Keep accurate employment records. Document your employees’ evaluations and disciplinary reports. Additionally, offer the employee the opportunity to comment in writing on each and require that he or she sign the document. Keep those documents and use them when you are asked to give a recommendation.
- Share how to share. Make sure your staff members understand the potential risks of providing references for former employees. Also make sure they understand that they cannot represent you, their employer, in any third-party disclosure.
- Don’t gossip. Gossip has the nasty habit of eventually reaching its subject. Gossiping about employees or ex-employees can create serious issues for employers who are asked to provide references. For example, an employee who can show you shared negative gossip about him or her is a step closer to showing you acted in bad faith after receiving a negative referral from you.
- Know the law. Different states have different laws regarding referrals. For instance, in Arizona employers are required to send a copy of employee disclosures to the employee’s last known address. In California an employer is protected from liability for disclosing information about an employee’s job performance; reasons for termination or separation; information about the employee’s knowledge, qualifications, skills or abilities based on credible evidence; and the employee’s eligibility for re-hire. Conversely, in Hawaii an employer is protected only for disclosing information related to the employee’s job performance.
Please contact a Gjording Fouser lawyer at 208.336.9777 if you would like any additional information about this topic or any other employment issues facing your company.