Reference Checks


A recent article from Fortune magazine, written by Vickie Elmer, suggests that reference checking is tough because “fear of litigation too often keeps everyone quiet.”  A business law attorney quoted in the article said the reason is that an “ex-employee may charge his former employer with defamation or retaliation for exposing unseemly habits about him.”  It’s not quite that simple.  For a former employee to prevail in either instance, it would be necessary to prove the person serving as a “reference” intentionally and maliciously lied about the former employee.  And even if “unseemly habits” are disclosed, if the “reference” is telling the truth – there’s the old adage that “the truth is an absolute defense.”  The attorney cited in the article suggests, however, that the best approach to this issue is to have “candidates fill out an authorization form that waives any claims based on reference checks.”

We at Barada Associates have been having candidates sign just such a waiver for years!  There’s nothing new about utilizing this approach to avoid possible litigation arising from what references say about a former employee!

What prompted the article was the story about a Fortune 500 company that hired an executive search firm “to find a CEO for their startup.”  The parent company had just set up an on-line business.  “After months of looking, the board chose their man.  But the board didn’t check references or talk to his former coworkers.  If they had, they would have discovered that at his last job he had had the habit of looking at pornography in the office.”  One would also have thought that part of the executive search firm’s duties would have included, as a matter of course, checking the candidate’s references!  Apparently not!  In this particular instance, there was a lawsuit for wrongful termination, which was eventually dismissed; but the cost of the litigation in time and money had to have been substantial.

The fault actually lies in two places. First, the search firm, as a matter of course, should have had the candidate sign a waiver and should have checked his references as part of their services.  Second, even if they failed to check the candidate’s references, the prospective employer should have requested references and a signed waiver as part of their own vetting process.

The point, of course, is that, if candidates for employment have nothing to hide, they ought to be happy to provide as many references as the prospective employer might request, not to mention being equally happy to sign a waiver releasing all parties from any claims based on checking references.

Despite the contention that “a good reference check is difficult to conduct,” our 30+ years in the reference checking business strongly suggests it just isn’t so!