Reference Checks


 Nearly every HR professional knows what the term “negligent hiring” means.  Generally speaking, it is the failure of an employer to use reasonable care in the selection and hiring of new employees that usually results in harm to an innocent third party.  There is, however, another, much newer civil action that is quickly emerging which has had a dramatic impact on the hiring process.  It’s called “negligent referral.”  It is, essentially, the failure of a former employer to disclose to a prospective employer information known to be true that causes harm to a third party.
 There is still some question about whether an actual “duty” exists to disclose information about a former employee, even if the prospective employer, or its agents, fails to ask about it.  The simplest example that comes readily to mind would be an employer who catches an employee stealing from him, terminates the employee, and then intentionally lies to a prospective employer and says the terminated employee left on his own and could have stayed on had he chosen to do so.

 Relying on that false information, the prospective employer hires the terminated employee who, in turn, does the same thing again.  The question then becomes, “does the former employer have a duty – legal, moral, or otherwise – to disclose to the prospective employee the real reason the employee left?”  There is a growing list of instances where the courts have held that there is, in fact, a duty to at least be honest about the employee’s reasons for leaving, rather than to lie about it – in effect continuing to pass a bad apple on.

 Some employers will argue that disclosing negative, but true, information about a former employee opens them to being sued if the former employee is denied employment as a result.  What must be kept in mind is that, even if the former employee does sue, the truth is still an “absolute defense”; and, if the former employee really was fired for stealing, the former employer will prevail and the practice of passing along the bad apple will come to an end.
 There is another line of reasoning, which, in a nutshell, suggests that the only way to avoid that affirmative duty to disclose true information, even though it’s negative, is to say nothing at all – in other words – to refuse to provide any information at all about the former employee.  While this course of action may protect the former employer, it should certainly raise a red flag in the mind of the prospective employer.  By the same token, it’s difficult to imagine a prospective employer not asking the former employer why the candidate for employment left his job!
 The obvious counter to this foregoing strategy – from the prospective employer’s standpoint – is to simply ask the candidate for employment to provide the names of references who worked with him at the former place of employment who will talk.  If still more roadblocks are put up, making it still more difficult to secure any information about the candidate, the prospective employer would be well advised to drop the prospective employee from further consideration and look for someone else.
 The lesson for employers is that it may be just about as dangerous to withhold negative information as it is to lie about the former employee by saying he was a good employee when, in fact, he wasn’t.