Employee References - Should you Give Them?
I have recently had occasion to speak at a conference on Personal Liability Issues for Managers, Co-Workers and Directors. on the issue of employee references. I presented a paper called "Defamation and Wrongful Hiring" (If you would like a copy, please email me). I was intrigued by how many companies adopted a policy of "we don't give references" or we will only confirm dates of employment and position, but will not provide a reference. The majority of those people attending the seminar had such a policy. It became clear that corporate "no reference" policies have their root in a fear of corporate or individual liability. Better to stay silent that be exposed to the risk of a possible lawsuit, but is that a complete answer?
This whole area is fraught with potential liability and risk (there's no nicer way to say it). On the one hand, diligent employers screen prospective employees by conducting reference checks and, in fact, making their offers of employment conditional upon a satisfactory reference check. On the other hand, these same employers (or many of them) refuse to give anything but the most curt "reference" when called by a prospective employer of a former employee.
I was recently referred to two (2) article in the Christian Science Monitor dealing with the matter of employee references. The first is entitled If an Old Boss Smears You, Hire a Detective and the second is entitled Would You Hire this Man?. I would refer you to the following blog #1 and blog #2 for reviews of these articles.
From a Canadian perspective see Miller v. Bank of Nova Scotia. This was an action for slander arising out of comments made during the course of a reference check conducted on behalf of the plaintiff's new prospective employer. The trial judge also held that "all parties have agreed, the words were spoken on an occasion of qualified privilege." The qualified privilege may be lost because of malice. In rejecting the argument that malice was present in this case, the Court observed as follows:
In this instance, qualified privilege was not defeated by any malice on the part of Yammine. She did not initiate or welcome the call. She testified that she frankly stated right at the beginning that she was upset and could not be very objective because of the way Miller resigned. She went on to explain why she was disappointed in the manner in which Miller quit. There is no evidence of any intent to mislead or be malicious. In fact, she is rather even-handed in her comments because she says in a very positive way that Miller could have done the job.
I find that Yammine had a legitimate basis for making negative comments about Miller and expressed them frankly. She also expressed positive comments. Yammine stated her views on a privileged occasion and in doing so she is protected even if her language was considered excessively strong as, having regard to all the circumstances, she honestly and reasonably believed what she said was true and necessary for Johns' purposes. (See Norman v. Westcomm Industrial Sharing Corp., [1997] O.J. No. 4774 at para. 119 (Gen. Div.).
A more recent case is Litster v. B.C. Ferry Corporation. The allegation in this case was, in part, that the plaintiff had been defamed by her supervisor when he wrote a termination letter and distributed it to five (5) individuals.
The Court observed that "Ms. Litster brought her defamation claim only against [her supervisor] , even though there was no evidence suggesting that he was acting outside the scope of his employment duties.” The Court held that:
The statements in the letter confirming her dismissal were defamatory of Ms. Litster. The letter says that Ms. Litster violated her position of trust. While it is technically correct that she “took” paint, the plain and ordinary meaning of that term in the context of the letter is that Ms. Litster stole the paint. Such statements have the effect of lowering Ms. Litster in the estimation of others, and are therefore defamatory.
While the statements were defamatory [the supervisor] was, nevertheless, entitled to the defence of qualified privilege. The court held that Ms. Litster was unable to defeat the defence because (a) the publication of the dismissal letter was not broader than necessary (the Supervisor had a legitimate interest in the course of his employment duties in advising the recipients and each recipient had a corresponding interest in receiving the information in discharging their employment duties) and (b) the Supervisor was not reckless in making the statements he did in the dismissal letter and he had not acted maliciously.
There is no doubt that, in an appropriate case, saying too much can land the employer in hot water. The difficulty is that not saying enough can be equally problematic for an employer. Take a look at Barakett v. Levesque Beaubien Geoffrion Inc. (affirmed by the Nova Scotia Court of Appeal here (leave to appeal to the S.C.C. refused July 11, 2002). In this case the Court increased the period of reasonable notice because of the employers failure to provide a reference letter which adversely affected the employees ability to find other employment.
Furthermore, there may be a concept of "negligent hiring", which arises where the employer hires an employee without looking at his or her employment history thus leaving clients or employees open to danger. This is not a claim that has been used in Canada with the same frequency as it has in the U.S. Nevertheless, the law is ever evolving ...
It is good business practice to conduct a thorough and complete reference check of prospective employees before they start work. The difficulty is that you might not get answers beyond "yes he worked here". What do you do then? And, on the flip side, is the company that gave the reference, if sued, liable for an extended notice period because the employee was not hired? What if the employee is hired, despite the "reference", and it turns out that he was fired by the former employer for, for example, sexual misconduct and "re-offends" with the new employer? Is there liability to both the former and new employer? So many questions, so few answers .... as I said, this is an area fraught with risk and uncertainty.
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