A. Because past job performance is the best indicator of future job performance, employers seek reference information as part of their hiring process.  However, because of concerns surrounding the potential for litigation, most employers now give out little or no reference information about any employee, regardless of whether the individual was a good or a bad employee.
 
Employers may see legitimate business and ethical reasons for sharing some reference information.  For example, employers may feel compelled to share some types of information to avoid the risk of being sued by the employer seeking a reference for withholding or misrepresenting information about a former employee who may pose a foreseeable risk of harm to others.
 
Employers who provide a negative employment reference may be liable under the following circumstances:  (1) the information provided is untrue; (2) the information provided was given for discriminatory reasons; (3) the employer is retaliating for a complaint filed by the employee or (4) the reference discloses confidential information about the employee and is an invasion or privacy.
 
While litigation to prevent or stop the giving of reference information which might fall into one of these categories is, of course, an option, it is an expensive and difficult option.  Employers generally have some qualified protection from a defamation claim if the information was provided in good faith, the statement was limited in scope to the interest or duty involved and the statement was given only on a proper occasion in a proper manner and for a proper purpose.  Employers also have some latitude to express personal opinions about an employee (as opposed to statements represented as factual) if the opinions are based on personal experiences or an employee's own statements. 
 
To overcome these presumptions in a litigation context, you must be prepared to prove, by clear and convincing evidence, that the employer (1) disclosed false information, (2) knew or should have known the information was false and (3) acted with malice.  As you can see, this can be a very hard argument to make, depending on the specific facts of your situation.  If you think your past employer is making negative statements, it is important to have all of the facts available and to be certain you can meet these standards.
 
A better way to approach the question of references may be to take affirmative steps to control who is giving information and what information they may give.  You can do this by identifying people to contact and perhaps even offering to make the arrangements to put your references in touch with the prospective employer.  If you want to identify someone who should not be contacted, you can do so, but you need to be prepared to give a good explanation of why.  If you are expecting negative information may be shared, you should prepare the prospective employer in advance to try to lessen the impact of the information. 
 
You may also have some rights under the federal Fair Credit Reporting Act.  The collection of character references or personal opinions about an individual is considered an investigative consumer report in the same manner as verifying public record information or credit reports.  If the law applies, you are entitled to a copy of the report, which will help you to know whether any negative or false or misleading information is being given out.
 
In those cases where you may have signed a written consent or authorization to permit the prospective employer to obtain information, it may be harder to control the process, but it is still worth making the effort.  Please also keep in mind that employers today regularly search the Internet and social networking sites for information about candidates, so you will want to consider the potential audience before posting anything on the Internet.
 
Many states today, Minnesota being among them, have referenced immunity laws to encourage employers to share relevant information by provided a limited shield from litigation based on reference information.  Generally, the employer must follow certain steps to obtain that limited immunity.  In Minnesota, the employee must consent to the disclosure in writing and must be provided with a copy of the information given out by the employer.  This is another way in which you may be able to obtain information about what is being said and determine whether there is a need to take action to correct the information or stop it from being shared with others.

 

Karen Johnston is a partner with Henson & Efron, P.A., a general practice law firm located in Minneapolis.  Her practice focuses on employment law counseling and employee benefit matters.  She is also experienced in business formation and commercial transactions and advises tax-exempt organizations.  Prior to joining Henson & Efron, Karen was Human Resources Director at the College of St. Catherine.