Although employers need to be able to verify information given to them by job applicants regarding prior employment history, many former employers are afraid to provide such information. These former employers may be concerned about defamation actions, in which the former employee alleges that the former employer intentionally or recklessly made untrue and damaging statements when a potential employer asked about the employee's history.

Particularly common are those cases where an employee separates from an employer without ever receiving a negative evaluation. If that employer later gives a negative reference to a potential employer, the employee may have grounds for a defamation action. In addition to former employers worrying about defamation actions, potential employers are often unsure about how they may use the information provided in a reference without violating state or federal law.

Qualified Privilege

In response to these concerns, nearly half of the states grant former employers some type of a qualified privilege with respect to information provided in a reference check. Under these privileges, former employers generally have a qualified immunity from defamation for reference information provided in good faith to a potential employer. This qualified privilege applies to negative job references.

The qualified privilege does not apply where the former employer communicates non-job-related information to the potential employer. It also does not give a former employer the right to make statements without grounds for belief in the truth of the statements. Nor does the qualified privilege apply where the employee is able to show malice on the part of the former employer.

Service Letters

A number of states have passed statutes requiring former employers to provide a "service letter" to potential employers, if a former employee requests that it be provided. Such a letter must usually contain the former employee's dates of service, job title, and, in some cases, the former employee's reason for leaving.

Employee Reference Release

Employers planning to obtain references from an applicant's former employers should obtain a signed reference release from the applicant. This release should attempt to release any person providing information to the employer from liability regarding those disclosures.

Such a release, however, will not necessarily shield former employers from liability for defamation.

Copyright 2010 LexisNexis, a division of Reed Elsevier Inc.