Why are employment references fraught with peril?
While giving truthful employment references is not legally actionable, references, by nature, tend to be highly judgmental. The employer’s view of the truth may be different than the employee’s view of the truth. This is particularly true in the case of under-performing employees.
Involuntary Termination
In the case of employment that has been involuntarily terminated [i.e., fired], it is a fair assumption the employee will typically feel some ill will towards his or her former employer and may be looking for an opening to file a legal suit. Often employees who leave the service of a company voluntarily have done so because they were unhappy with the company or in their position. In any case, references given for former employees can create an opening for legal action if the employee does not feel he or she has been fairly treated by the former employer.
Verbal References
Some small business owners feel they can be less cautious when giving verbal references than they would be in the case of supplying a written one. Not true! Any type of reference can be legally actionable. While many courts are sympathetic to the need of employers to give references, others are not. Courts have been known to rule for an employee because a reference given, while good, was not good enough.
No Reference
It is a safe policy to offer no references at all beyond confirming dates of employment, the position held, and rate of pay earned. This may not seem right, but your responsibility is to keep your business running smoothly and out of court so that your current employees can enjoy a healthy working environment.
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